In the first blog post about cap tables, we talked about setting up equity compensation pools. In this blog post, let’s learn how to add a new equity investment to the cap table. Let’s assume that our startup has 2,000,000 founder shares outstanding, a 500,000 equity compensation pool, and a pre-money valuation of $1 million.
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Startup Cap Table 101: Introducing an Equity Compensation Pool
I have to admit: cap table calculations are not easy and not all startup lawyers enjoy this part of their jobs. However, no matter how hard it can get, being able to make sense of the cap table is an essential skill for startup lawyers. Since I have just finished teaching this to students at…
Startup Cap Table 101: Introducing an Equity Compensation Pool
I have to admit: cap table calculations are not easy and not all startup lawyers enjoy this part of their jobs. However, no matter how hard it can get, being able to make sense of the cap table is an essential skill for startup lawyers. Since I have just finished teaching this to students at…
The SEC Modernizes US Securities Laws – Part I – Amendments to the “Accredited Investor” Definition
This Fall 2020 has seen an unprecedented number of rulemaking by the Securities and Exchange Commission (the “SEC”) that will be remembered for years to come. I will attempt to summarize the changes for you in a series of blog posts. Altogether, the changes will have lasting ramifications for the U.S. capital markets, enabling (I…
Temporary Rules Make Crowdfunding Easier
Yesterday, on May 4th, the Securities and Exchange Commission (the “SEC”) adopted temporary rules (through the end of August) making it easier for smaller companies affected by COVID-19 to raise capital through a Regulation Crowdfunding offering. To rely on these temporary rules, the issuers will need to disclose to the investors that they are specifically…
Открытие Бизнеса в США: Практические Советы
Мы организуем бесплатный вебинар на тему открытия бизнеса в США. Вебинар покроет не только юридические вопросы но и налоговые. Присоединяйтесь 14 мая в 17:00 по МСК!https://www.eventbrite.com/e/104361225234
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Although Regulation Crowdfunding (or Reg CF in short) is a great way to get funding for companies that otherwise would have been overlooked by angel or VC investors, running a successful and compliant Reg CF campaign is not an easy undertaking. Based on experience working with Reg CF issuers, in this blog I describe and…
Amending the Definition of "Accredited Investor"
The definition of an “accredited investor” is the cornerstone of Regulation D that provides a safe harbor exemption for private placements of securities by startups and more mature companies. Only in 2018, $1.7 trillion was invested into the startup sector by means of Regulation D offerings, out of which $228 billion was raised by companies…
Corporate Formalities for Delaware Startups
You have just formed your very first Delaware corporation. Congratulations! Although as a busy founder you may not have time to take care of ongoing corporate maintenance, there are some minimum corporate formalities that you should strive to maintain. Below is my list and the reasons why.One of the main benefits that is afforded by…
SEC Complaint Against a VC Exempt Reporting Adviser
On August 13, 2019, the SEC filed a complaint against Stuart Frost and Frost Management Company, LLC for violating the antifraud provisions of Sections 206(1)-(2) and 206(4) of the Investment Advisers Act. This case is a reminder that certain provisions of the Advisers Act apply to all investment fund managers, regardless of whether they…