John Melloy’s article entitled “The Dictators of Silicon Valley: Facebook, Google Stripping Shareholder of Power” highlights an interesting trend among tech companies that have gone public in the past several years – implementing dual-class voting structures. The general idea behind these dual-class voting structures is to keep control in the hands of the individuals (usually the founders) who supposedly know what is best for the company and to shield a company from potential public company shareholder activism and hostile takeovers. Control is maintained by either giving the founder shares more votes per share than the shares issued to the public (or issuing non-voting shares to the public) – for example, founders would hold Class B common stock entitled to 10 votes per share, while the general public would hold Class A common stock entitled to one vote per share.
Continue Reading Dual-class voting; A trend toward eliminating shareholder rights?

A_Ledbetter_LR.jpgCONTRIBUTED BY
Andrew Ledbetter
andrew.ledbetter@dlapiper.com

The Facebook IPO is a pretty big deal generally. Whether Facebook would go public stirred media frenzy and Congressional testimony in the past year. Facebook’s initial registration statement indicated it would be the largest tech company IPO ever (the fee table on the original filing showed a $5 billion offering – the filing fee alone was $573k).  And the company’s social importance is undeniable.

But what will the SEC staff think about Facebook’s disclosures? Will the path to going public hit some speed bumps? We got our first big clue on Wednesday, when after the markets closed Facebook filed its first substantive amendment to the Form S-1 for its IPO. (It filed Amendment No. 1 shortly after its original filing, solely to add exhibits.)

On interesting deals, I sometimes compare an amended S-1 to the prior filing to see what changed. Seeing what disclosures a company has changed lets me surmise whether SEC comments may have driven the change and piece together the issues the SEC staff has raised with the filing. In a deal like Facebook’s, you can assume the staff heavily, carefully reviewed the filing, so the comments the staff elected to give may reveal points of general SEC emphasis, with potential application to other companies. A deal like this also tends to become a frequently used source for future disclosures by other companies looking for precedents, which makes monitoring Facebook’s disclosures particularly interesting. 

Or perhaps that’s just my rationalization – I just couldn’t help but spend a few hours looking at this…

In any event, for kindred spirits, my guess is that Facebook probably received SEC comments clustered around the themes discussed below. For those who do not routinely review registration statements, this post will be fairly technical and you may want to stop reading now.Continue Reading Like? Comment? What the SEC might think of Facebook’s IPO

Earlier this week, I attended the TechNW 2011 conference organized by the Washington Technology Industry Association (WTIA). The conference was very informative and full of interesting presenters and topics. The corporate development panel discussion moderated by Tom Huseby (General Partner and founder of SeaPoint Ventures) was particularly interesting for startups (and relevant to my practice). The panelists were Neeraj Arora (Principal, Corporate Development at Google), Ryan Aytay (VP of Corporate Development at Salesforce.com), Ryan Cooper (Corporate Development Director at Microsoft), and Amin Zoufonoun (Director of Corporate Development at Facebook), all companies that have grown a great deal through partnerships as well as acquisitions of other companies. The general discussion surrounded merger and acquisition activities and drivers from the perspectives of Facebook, Google, Microsoft and Salesforce.com.

Two specific questions relating to the value of investment bankers in the M&A context and timing of the M&A process stuck out because they are questions that frequently come up with early stage companies.Continue Reading Perspectives on M&A from Corp Dev Execs at Facebook, Google, Microsoft and Salesforce.com