The SEC has recently issued interpretations regarding Rule 147.  This rule provides a safe harbor under Section 3(a)(11) of the Securities Act of 1933, as amended, which exempts from federal registration securities offered and sold only to persons resident within a single state or territory, in which the issuer is also resident.  While the exemption is a relatively simple idea at a high level, there can often be challenges in applying it, such as determining where a company resides or where an offer occurs.  Rule 147 provides bright line…
Continue Reading Recent SEC Interpretations Facilitate Intrastate Crowdfunding

On October 7, DLA Piper will host the Technology Leaders Summit, where technology leaders, influential innovators and policymakers convene to discuss the future of innovation. At the Summit, DLA Piper will release the results of its fourth, semi-annual Technology Leaders Forecast Survey, which will gauge the perspectives of leading technology and venture capital executives regarding the business climate and operating environment for technology companies.

We invite you to participate in the survey (on or before September 22).  In appreciation, respondents will receive a copy of the final report
Continue Reading Take the Technology Leaders Forecast Survey

Over the past few years, a new funding source for seed stage startups has developed and quickly become an integral part of the startup ecosystem.  This newer brand of investor is typically labeled a seed venture or micro-venture capital fund (a Micro-VC).

Micro-VCs are smaller venture firms that primarily invest in seed stage emerging growth companies, often have a fund size of <$50M and typically invest between $25K to $500K in a given company.  While many Micro-VCs are managed by former venture capitalists, former entrepreneurs and/or super angels, many larger…
Continue Reading What is Micro-Venture Capital?

The Q1 2014 Halo Report has been released by the Angel Resource Institute, Silicon Valley Bank and CB Insights. The Halo Report analyzes angel investment activity and trends in the United States. Here are a couple interesting Q1 2014 highlights:

  • The median angel round size jump to $980K (up from $750K in each of Q1 and Q4 2013);
  • The median round size was $1.65M when angel groups co-invest with other types of investors;
  • The median seed stage pre-money valuation increased slightly to $2.7M;
  • Angel groups continue to

…
Continue Reading Angel Investment Trends: Q1 2014 Halo Report

Perkins, Rachel_Headshot.jpgCONTRIBUTED BY
Rachel M. Perkins
rachel.perkins@dlapiper.com

Startups and public companies alike often use equity to help attract, retain and incentivize talented employees and other service providers. The different forms of awards have proliferated in the past several years, though, leading to a confusing “alphabet soup” of jargon that often frustrates both the recipients of grants and the company itself. Many angel and venture capital investors continue to prefer seeing stock options and restricted stock awards in their portfolio private companies, as these are the most common and simplest to administer. Other forms of awards can also be challenging for startups because there is no public market to easily set a contemporaneous per share stock price or provide liquidity for the award recipients. However, while stock options—both nonstatutory (NSO) and incentive (ISO)—and restricted stock awards (RSAs) remain the most popular and most recommended form of equity compensation, other forms—such as restricted stock units (RSUs) and stock appreciation rights (SARs)—are gaining popularity in certain markets, and we are being asked more and more frequently about these alternatives.

Adding to our previous discussions of adopting your first equity incentive plan, NSOs vs. ISOs and options for issuing employee equity in LLCs, we have put together the below quick reference charts, which are intended as high-level summaries of the most common equity incentive awards as well as some of the other less common awards available.  The following charts highlight some of the key features and tax consequences of each type of award, as well as some of the potential drawbacks associated with each:
Continue Reading Equity Compensation Alphabet Soup – ISO, NSO, RSA, RSU and more

Compliments of Jason Smith of Kidder Mathews, attached is a Seattle-area office real estate market review for Q2 2014. As the report notes, so far in 2014, the only major surprise in the office market was Boeing expanding into over 600,000 s.f. of space in Bothell and the I-90 Corridor, single-handedly dropping the vacancy rates in those submarkets by 300-400 basis points (bps) each. The rest of the market trends are holding steady; leasing activity is improving across the region and the lack of large contiguous spaces in the…
Continue Reading Seattle Office Real Estate Market Review for Q2 2014

CB Insights recently released its Pacific Northwest Investment and Exit Report, which analyzed private company investment and exit activity over the past five years. The report collected data from all activity sources, including venture capital, private equity, strategic corporate investments, corporate venture investors, angels, incubators and accelerators. Here are a few highlights from the report:

  • Since 2009, the number of deals closed per year has increased 144% (195 deals in 2009 vs. 475 deals in 2013), with the total annual investment amount increasing 81% ($780 million dollars invested in

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Continue Reading Pacific Northwest Investment and Exit Report

Article prepared by and republished courtesy of our colleagues Steven Levitsky and Paolo Morante; originally published here: http://www.dlapiper.com/en/us/insights/publications/2014/05/merger-enforcement-actions-below-the-hsr-threshold/.

“Less is more” may be true in architecture, but in merger clearance law, “less” is still enough to trigger antitrust investigations and litigation and rescission of the whole transaction. By “less,” we mean less than the Hart-Scott-Rodino $75.9 million threshold.

The big case currently in the news underscoring this point is FTC v. St. Luke’s Health System. In January 2014, the Federal Trade Commission obtained a decision from the US District Court for Idaho ordering full divestiture of a non-reportable deal more than two years after the merger had been consummated.

But that result is actually old news. Contrary to popular opinion, the antitrust agencies have a long history of challenging deals well below the Hart-Scott-Rodino thresholds, even when the deals have already closed. And with the St. Luke’s case, they are warning again that no anti-competitive deal is immune from challenge, even if it is small.

What issues should you keep in mind to prevent a future disastrous challenge from the regulators? In this post, we briefly discuss the highlights of St. Luke’s and then close with 10 important points to keep in mind in upcoming M&A transactions.
Continue Reading You think your merger is too small for antitrust laws to apply…think again: Top 10 tips in non-reportable transactions

From our colleague, Ute Krudewagen

The CEO of an emerging growth company called me a while ago, a bit shocked after having seen the employment contracts that had just been issued to a couple of new hires in Hong Kong.  “How could they be longer than mine!?  Are you sure that is the approach we should take as we expand our operations?”

This CEO, like many US executives, employment lawyers and HR representatives, is accustomed to one- or two-page US-style at-will offer letters. But in many jurisdictions around the world,.
Continue Reading Top 10 Pitfalls in Managing Employment Contracts as You Go Global

FINRA, the securities self-regulatory organization whose members are broker-dealers, recently simplified two rules that are critical in the public offering process.

FINRA’s Corporate Financing Rule generally regulates underwriting compensation and prohibits unfair arrangements in connection with the public offering of securities.  Among other provisions, the rule requires members to file information with FINRA about the securities offerings in which they “participate” and to disclose affiliations and other relationships that may indicate the existence of conflicts of interest.  The rule also imposes lock-up restrictions on certain securities acquired from the issuer by a member and restricts the receipt of certain items of value, such as termination or “tail” fees and rights of first refusal as to future transactions (ROFRs).  In addition, FINRA’s Conflict of Interest Rule prohibits FINRA members that have a “conflict of interest” from participating in a public offering of securities unless certain conditions are met.

These two FINRA rules have been revised to simplify member participation in offerings and associated reporting, while enabling members to negotiate more broadly for tail fees and ROFRs, as follows:
Continue Reading FINRA Simplifies Corporate Financing and Conflict of Interest Rules