January 2013

Asher Headshot - Resized.pngCONTRIBUTED BY
Asher Bearman
asher.bearman@dlapiper.com

 

 

The Startup Company Starter Kit, available in our “Forms” section in the right hand column, provides forms to do any of the following: 

  • Create an offer letter for a prospective employee (state specific and will address confidentiality obligations)
  • Create an agreement that an existing or new employee will sign that protects and preserves the employer’s proprietary information and inventions (often called PIAAs, these are critical for employees involved with company IP)
  • Disclose confidential information TO someone else (for disclosures BY the company) 

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Continue Reading Startup Company Form Agreements

Compliments of Jason Smith of Kidder Mathews, attached is a Seattle-area office real estate market review for Q4 2012. As the report notes, the region’s office market continues its gradual overall recovery. Leasing was widespread, with all five submarkets reporting positive results for the first time in a year. The positive impacts of Amazon in the north end of the Seattle central business district (CBD) and various gaming and internet companies in the Bellevue CBD continued through the fourth quarter, joined by renewed leasing from more traditional sectors. The most recent beneficiary was the overall Class A category, which saw increased leasing activity in the fourth quarter in legacy Class A buildings such as Columbia Center, Safeco Plaza and 901 Fifth.Continue Reading Seattle Office Real Estate Market Review for Q4 2012

A friend of mine at a major investment bank sent me their market outlook for 2013.  In 2012, the world markets were up 16%.  For 2013, they are projecting:

  1. Interest rates are likely to remain low for a few years,
  2. investors should lower their return expectations, and
  3. “policy” will remain incremental in key developed and emerging markets economies.

Fom an asset class return perspective, there were six key projections:

  1. Bonds will have virtually no nominal returns for the foreseeable future.
  2. High yield and emerging market local debt will provide attractive

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Continue Reading Equity and Bond Market Outlook 2013

Article prepared by and republished courtesy of Perrie Weiner, Patrick Hunnius and Stephanie Smith of DLA Piper; originally published here http://www.dlapiper.com/sec-staff-preview-top-hedge-fund-enforcement-trends-for-2013/.

In a recent speech before the Regulatory Compliance Association,1 Bruce Karpati, Chief of the Securities and Exchange Commission’s Enforcement Division’s Asset Management Unit, suggested where the SEC may be heading regarding hedge fund oversight in the months to come.

Mr. Karpati both highlighted the SEC’s past enforcement activity concerning hedge funds (including several cases where the SEC alleged funds fraudulently overvalued their holdings) and signaled that the SEC’s emphasis on such activity will continue.Continue Reading SEC Staff Preview Top Hedge Fund Enforcement Trends for 2013

Perkins, Rachel_Headshot.jpgCONTRIBUTED BY

Rachel M. Perkins
rachel.perkins@dlapiper.com

We often receive questions about the application of the “accredited investor” definition (copied at the end of this post) in Rule 501(a) of Regulation D, and one that’s come up from time to time is how trusts generally qualify as “accredited investors.”  Whether a trust is an “accredited investor” is a fact-specific determination, but generally speaking, the SEC has provided some guidance on trusts in the form of no-action letters and the Compliance and Disclosure Interpretations (“C&DI”).Continue Reading Trusts as Accredited Investors

A reminder to companies that had incentive stock option exercises in 2012, Section 6039 of the Internal Revenue Code requires a corporation to furnish a written statement to any employee or former employee who either exercised an incentive stock option during 2012 or during 2012 first transferred legal title to shares acquired under the corporation’s Section 423 employee stock purchase plan. The corporation must furnish these statements on Forms 3921 and 3922 no later than January 31, 2013.

These corporation must also file information returns providing the same information…
Continue Reading Filing deadline reminder for companies with incentive stock options; reports must be delivered by January 31

Today the Angel Resource Institute, Silicon Valley Bank and CB Insights released their angel group update for Q3 2012, the Halo Report. The Halo Report analyzes angel investment activity and trends in the United States. Here are a couple interesting highlights:

  • The median angel round size was $640K;
  • The median angel round size was $1.59M when angel groups co-invest with other types of investors;
  • The median pre-money valuation for early stage angel group deals was $2.6M;
  • California was the most active region for angel deals, both in number

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Continue Reading Angel investment trends for Q3 2012

Asher Headshot - Resized.pngCONTRIBUTED BY
Asher Bearman
asher.bearman@dlapiper.com

The National Venture Capital Association (NVCA) had a good post about the implications of the new tax bill significant to the venture capital community.  Significantly, they note that this bill did not address any changes to the tax rate for “carried interest”, but they do “fully expect” carried interest tax rate increases to remain a topic of discussion as part of the larger pending tax reform discussion, although they project that discussion to be delayed until the second half of 2013.

We’ve written a number of posts about the bill…

Continue Reading Tax Changes – Implications for Venture Capital

One provision included in the fiscal cliff bill (aka the Taxpayer Relief Act of 2012), but seemingly unnoticed by the general press, was the unexpected renewal of the 100% tax exclusion for capital gains on Qualified Small Business Stock (“QSBS”). This QSBS tax exemption, which had previously expired at the end of 2011, would be extended for investments made through the end of calendar year 2013 (and would be retroactively effective for investments made in 2012). A summary of the QSBS renewal provisions covered in the fiscal cliff bill can…
Continue Reading Fiscal Cliff Bill to Renew 100% QSBS Tax Break

Article prepared by and republished courtesy of Evan Migdail of DLA Piper; originally published here http://www.dlapiper.com/congress-pulls-back-from-the-fiscal-cliff/.

Following an unprecedented New Year’s session, Congress has passed legislation, the Taxpayer Relief Act of 2012, negotiated with President Barack Obama to partially prevent the US economy from going over the fiscal cliff.  You may read the full text of the bill here.

At a cost of US$4 trillion over ten years, the main provisions are as follows:

  • The 2001 individual tax rates are made permanent, except that the highest rate, 39.6 percent, starts at US$450,000 in taxable income for married filing jointly, US$400,000 for individuals.
  • Tax rates of capital gains and dividends are set permanently at 15 percent, and 20 percent for those above the thresholds at which the individual 39.6 percent rates start.
  • The estate tax rate goes up to 40 percent with a US$5 million exemption (US$10 million for married couples).
  • The limitations on itemized deductions and personal exemptions phaseout for high earners are restored at US$250,000 for individuals and US $300,000 for married filing jointly.
  • The alternative minimum tax “patch” to keep middle class taxpayers from paying the AMT is enacted permanently (previously the patch had to be renewed yearly).
  • The Senate Finance Committee package extending most expired and expiring provisions through the end of 2013 is adopted as part of the bill.
  • Bonus depreciation at 50 percent is extended at 50 percent.
  • The payroll tax cut enacted in 2010 is allowed to expire, but long-term unemployment benefits are extended for a year.

The most important features of the compromise may relate to what is not in the bill, rather than what is enacted: i.e., business tax reform, entitlement reform and raising the debt ceiling. Many Republican members preferred to address all of the tax provisions (individual and corporate) together as part of comprehensive tax reform.Continue Reading Congress pulls back from the fiscal cliff − for the time being