Formation Issues

How To Calculate (And Affect) Series A Price Per Share

The price per share of the Series A preferred stock – the first significant round of venture capital financing...

Majority Rules: Why A Majority Of Stakeholders Should Be Able To Amend Convertible Notes

A “majority rules” provision in a convertible note allows for an amendment or waiver of its terms with the...

Convertible Notes: The Maturity Date Is Reached Before A Financing. Now What?

Convertible notes are loans and, like most loans, have a fixed maturity date at which point they are to...

Catch-Up Distributions For Profits Interests

In an earlier post, I talked about the 4 basic forms of equity (or equity-type) compensation that Limited Liability...

Seed Round Financing: Convertible Note vs. Series A Preferred Stock

Convertible debt and preferred equity are among the most common forms of investment structures used in early stage companies....

What Is A Management Rights Letter And Why Do Venture Funds Ask For Them?

When investing in startups venture capital funds often request what is known as a management rights letter. This letter...

What is an 83(b) Election and when should I make one?

Section 83 of the Internal Revenue Code applies to various forms of deferred compensation, including equity compensation such as...

Equity Incentives for LLCs and Partnerships

I.  Introduction Limited Liability Companies and partnerships (both referred to here as “LLCs”) can issue 4 basic forms of equity...