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MintzEdge Entrepreneur Perspective: Startup Space
In this episode of MintzEdge’s From the Edge podcast, David Ponraj, a physicist-turned-analyst-turned-entrepreneur, tells Aditya Perakath, a physicist-turned-Mintz attorney, how he started his current venture: a startup designed to help other startups succeed.
Fiduciary Duties in M&A Transactions
By Page Hubben
The board of directors of a corporation owe fiduciary duties to the corporation and its stockholders under Delaware law. In most general matters, the actions and decisions of the board and the company’s officers are viewed through the standard of the business judgment rule. In a change in control transaction, however, a court reviewing the actions of a board will apply a heightened standard, and the actions and decisions of the board and officers become subject to a greater level of scrutiny. Courts often examine the board’s decision-making process, the reasonableness of actions taken and the information on which decisions are based. To build a strong case against potential litigation during a significant transaction, companies and their boards should be well informed about their duties and follow best practices for evaluating, structuring and approving a deal.
Fixing Void or Voidable Stock Issuances with Section 204 of the Delaware General Corporation Law ("DGCL")
By Paula Valencia-Galbraith
Has your corporation sold stock before having a sufficient number of shares authorized under its Certificate of Incorporation? The DGCL requires that the authorized capital be increased before the sale is consummated because the Corporation needs to create the stock it is going to sell. Without the stock’s creation there is nothing to sell to the investors and failure to increase the authorized capital could deem the sale and issuance void or voidable due to the Corporation’s failure to comply with the technicalities of the DGCL. Before 2014 there was no mechanism that could retroactively fix issuing equity with an insufficient number of authorized capital or any other type of transaction that required certain technical requirements by the DGCL. These types of mistakes led to potentially embarrassing conversations with a corporation’s investors but in 2014 this all changed.
Seed Funding Basics
By Jason Miller
After forming a company and dividing equity amongst the co-founders, a founding team’s next questions are typically about funding. Often among ambitious founders, venture capital first comes to mind. Today, venture capital is well-suited for growing early-stage companies but rarely available for truly starting companies. In recent years, venture capital has been deployed in larger amounts to fewer companies and there has been a corresponding shift toward larger and more frequent seed or angel investments.
MintzEdge 101: FDA For Start-Ups
In this episode of MintzEdge’s From the Edge podcast, Sam Effron speaks with Ben Zegarelli of Mintz about considerations for new medical device, pharmaceutical, or other health regulated start-ups and strategies for how to prepare for FDA oversight.
Key Considerations: Board of Director Composition and Director Recruiting in Early Stage Companies
By Christina Balestracci
The board of directors governs the activities of a company, overseeing and advising management while upholding its fiduciary duties to the company’s shareholders. A board is tasked with making high-level decisions, approving major policies and supervising performance and company strategy. Given its significant role, there are several important and strategic factors to consider when structuring a board of directors.
IRS Provides Additional Guidance on the Tax Treatment of Cryptocurrency
By Avi Reshtick, David Salamon
Nearly five years after the release of the only published guidance in the area, on October 9, 2019, the Internal Revenue Service (the “IRS”) issued additional guidance on the tax treatment of cryptocurrency. The additional guidance was delivered in the form of Rev. Rul. 2019-24 (the “Crypto Ruling”) and a set of Frequently Asked Questions (“Crypto FAQs”) that applies the principles outlined in the IRS’ previously issued guidance (Notice 2014-21) to an expanded set of situations.
Founder Liquidity: Key Considerations in Secondary Sales
By Soobin Kim
As a founder starts and grows a company, the founder may consider selling her shares in the company prior to an exit via a sale of the company or an initial public offering. Such sale, typically called a secondary sale, helps a founder meet needs for necessary expenditures or reduce her risk tied to the company. In the past, the founder’s sale of her shares was viewed as signaling lack of confidence and misaligning the founder’s interests, and therefore, investors often blocked the founder’s sale of her equity.
MintzEdge Entrepreneur Perspective: Una Ryan Guides Entrepreneurs From Startup To Exit
In this podcast, Una Ryan, a successful life sciences entrepreneur and investor, shares her fascinating story of how she came to the United States and became a successful life sciences entrepreneur, investor, and artist – and offers important tips to help entrepreneurs achieve success.
Liquidity for Private Company Securities — Rule 144
By Joshua Bergmann
For early stage private companies that need to effectively utilize available capital, often times attracting talent comes at the expense of issuing shares of stock (or options to purchase shares of stock) of the company through the use of an equity incentive plan.
What Lessons Can Investors Learn from SoftBank's Investment in WeWork?
Few investments by venture capital or private equity funds have undergone as much scrutiny as the investment by SoftBank in WeWork.
Social Impact Investing: Benefits and Recommendations for Investors
By Nadia Do Canto
On August 19, 2019, nearly 200 chief executives met to redefine the purpose and role of businesses in society. The outcome of this meeting was a paradigm shift from the long-held corporate orthodoxy that shareholders’ interests are supreme to a standard that promotes “an economy that serves all Americans.”
MintzEdge 101: The Value Of Mentors – John Morris, Vistage Chair
In this podcast, Jeremy Glaser discusses with John M. Morris the value of mentors and the role they can play in both early stage and later stage companies.
How to Write Gender-Neutral Contracts
“Men” is not synonymous to “person”, nor does “he” mean “she.” It is important for contractual language to be not only precise but also accurate. Many agreements govern multiple individuals, some of whose gender is unclear or variable.
MintzTech Connect Industry News — October 2019
By Dan DeWolf and Samuel Effron
This issue of TechConnect covers common Equity Incentive Plan mistakes and profiles event data analytics company Vivastream and Gas It Up, a start-up focused on mobile gasoline delivery.
Venture Debt 101: A Discussion Of The Basics And Key Considerations
In this episode of MintzEdge’s From the Edge podcast, Will Perkins speaks with Phil Gager of Stifel about venture debt. Will and Phil begin their discussion with an exploration of the background and basic terms of venture debt. They also dive deeply into the use cases — when a technology-driven emerging business should think about taking on venture debt and when it should not.
Patenting Considerations for Artificial Intelligence in Biotech and Synthetic Biology
By Terri Shieh-Newton, PhD, and Marguerite McConihe
Artificial Intelligence (AI) inventions have aided development in nearly every industry, but perhaps none more so than synthetic biology. For synthetic biology researchers, AI has developed into a vital tool to create cutting edge applications.
Recap of Federal Register Notice on Artificial Intelligence (AI) Patent Issues
By Marc T. Morley, Michael T. Renaud, Paul S. Brockland
Artificial Intelligence (AI) is increasingly becoming important across a diverse spectrum of technologies and businesses. As AI grows in importance in business and technology, so too grows the number of patent applications and the potential for uncertainty.
Issuing Stock Options Under an Equity Incentive Plan
By Jenna Stewart
Private companies often adopt equity incentive plans in order to issue stock options to their employees, directors and consultants. However, once the plan is adopted, there are a number of things that a Company should consider when granting stock options. This article provides a list of questions for private companies to consider when issuing stock options under an equity incentive plan.
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