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

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

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Rachel M. Perkins

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

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Asher Bearman

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

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

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Asher Bearman



Startup companies often have to protect their intellectual property (IP) on a budget.  Here are some fundamental legal protections all startups should have:

  1. Employee Agreements.  All employees should sign non-disclosure agreements obligating them to keep the company’s information confidential.  In addition, all employees.  Most venture capitalists will require prior invention assignment agreements (PIAAs) from all key employees prior to investing in the business.  Forms for this are available in our free Starter Kit.
  2. Consulting Agreements.  Sets the terms of consulting

Continue Reading Fundamental IP Protection for Startups

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Asher Bearman

The Startup Company Formation Kit, available in our “Forms” section to the right, allows companies to prepare a basic Certificate of Incorporation and Bylaws for a company: 

  • Certificate of Incorporation:  This document specifies the typical initial authorized capital of a startup company to be formed in Delaware.  The company’s formation is not official until this document is filed with the Delaware secretary of state.  We typically make this filing on behalf of startup companies and provide guidance regarding the terms and

Continue Reading Startup Company – Forms of Formation Documents


Bruce Wein

The IRS has released proposed regulations under Section 1411 of the Internal Revenue Code, which imposes a 3.8 percent tax on certain unearned income or investments of certain individuals, trusts and estates, for tax years beginning after December 31, 2012.Continue Reading Proposed Regulations Explain 3.8 Percent Medicare Tax on Net Investment Income

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Asher Bearman

Earlier this year, I wrote about an opinion from the Delaware Court of Chancery that, if affirmed, could have broad practical implications for LLC managers and the fiduciary duties owed to their members.  We have been monitoring this case and, on November 7, the Delaware Supreme Court issued its decision.  As it turns out, whether fiduciary duties are owed by default in a Delaware LLC remains an open question.  The Delaware Supreme Court affirmed the earlier Chancery Court’s opinion exclusively on contractual grounds, leaving open-ended the question as to default fiduciary duties by rejecting the Chancery Court’s decision to incorporate fiduciary duties into the Delaware LLC Act.  Please continue reading below for the text of DLA Piper’s follow-up Client Alert posted by John Reed and Jennifer Lloyd.Continue Reading Default Fiduciary Duties in Delaware LLCs Remains an Open Question following Delaware Supreme Court Ruling

On Tuesday, we announced the results of DLA Piper’s fifth Technology Leaders Forecast survey.

Click here to download a copy of the survey.

Today we’re addressing some of the key implications of the survey results.

Economic headwinds challenge tech startups and the IPO market

The DLA Piper Technology Leaders Forecast surveys have shown a solidifying opinion among technology leaders that there is a “New Normal” in the model for building and investing in startup technology companies. Approximately two-thirds of executives surveyed believe the operating environment has been permanently altered in some significant way.Continue Reading DLA Piper Tech Survey – Key Findings