With venture capital difficult to obtain, more startups are looking at venture debt to finance either growth or equipment purchases. Venture debt involves a specialized financial institution extending a loan to a startup. Traditional commercial lenders are hesitant ...
Category Archives: Entrepreneurs and Startups
Why Secondary Market For Private Company Stock Is Strong
In another sign that the secondary market for private company stock is going strong, Elevation Partners will soon complete its third large transaction in the past year. This time, Elevation will buy $100 million of Pandora stock. In June 2010, Elevation purchased five million shares of Facebook common stock for $120 ...
Two Differences In How Angel Investors And Venture Capitalists Invest
With the venture capital industry shrinking, many entrepreneurs have started looking to angel investors for funding. There are two main differences in the funding practices of venture capitalists and angels: (1) Stage of investment, and (2) Size of investment. How do these differences affect ...
Entrepreneurs: Does Your Attorney Need To Understand Your Business?
Does your attorney need to understand your business? And if your business lawyer does not have a strong grasp of your business, does it matter? Yes, the answers matter for entrepreneurs. Some lawyers will say that they do not need to have a deep ...
Angel Investors: Give Them Common or Preferred Stock?
Congratulations. You have convinced several angel investors to fund your startup. Do the angels get common stock or preferred stock? What's the difference between common and preferred stock? Why does it matter? This deal term has implications for future funding rounds and your relationship ...
Three Reasons For Weak Venture Capital Returns, 2000 to 2009
Palo Alto Corporate Attorney Douglas Y. Park discusses three reasons for lower venture capital returns: (1) Weak IPO market, (2) VCs making fewer early stage investments, (3) Fewer VCs have operational experience.
What Entrepreneurs Need To Know About Going Public: Ongoing Disclosure Requirements
San Francisco Business Attorney Douglas Y. Park discusses the ongoing SEC disclosure requirements associated with becoming a public company — whether you become public through an IPO or otherwise.
Strategies Private Companies Should Take When Employees Sell Stock
In my last post, I discussed Facebook's new stock trading policy that restricts when and how employees can sell company stock. This raises the broader question of what private companies should do when employees sell stock. In this post, I discuss (1) why private ...
Facebook Restricts Stock Trading To Avoid Going Public
Facebook just took another move to avoid going public. Late last week, Facebook implemented a policy that prohibits employees from selling their company stock unless a trading window is in effect, or from tipping outsiders on inside company information. In doing so, Facebook ...
What Venture Capitalists See For 2010: IPOs, M&A, But Not Cleantech
What do venture capitalists like in 2010? Not cleantech. But they are optimistic about more big IPOs and mergers and acquisitions coming through. An article in the New York Times discusses the technology sectors that VCs are bullish on. VCs are excited about ...