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Articles2022-08-30T14:29:29-07:00

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Spreadsheet for Y Combinator’s Post-Money Safe (with Valuation Cap and Optional Pro Rata Rights)

Y Combinator's post-money Simple Agreement for Future Equity (Safe) is essentially a series of mathematical equations in the form of a legal document. My spreadsheet for Post-Money Safe with Valuation Cap (and Optional Pro Rata Rights) allows companies to test hypothetical future dilution scenarios (i.e., Series A financing and liquidity event) to measure projected Safe-caused dilution to founders and others. This spreadsheet is available for purchase in downloadable Excel format here. This spreadsheet allows testing of ...

How I Quit My Big Law Firm Job, Moved to an Island, and Built a Thriving Boutique Practice Closer to Nature

  It was the spring of 2015: I was a corporate law partner in the Austin office of a 200-lawyer firm with a successful practice. The firm was collegial and my partners were smart and amiable. Our two kids, then ages 6 and 7, enjoyed Texas life, friends, and attended an excellent Waldorf school. My wife, Shannon, had a lifelong group of friends and family and a thriving ...

Top 10 Negotiation Points for Sellers in M&A Investment Banking Engagement Letters

Engaging a reputable investment bank to assist in the sale of a business is generally money well spent. A good investment bank will work diligently to maximize the seller’s enterprise value and coordinate a disciplined, organized, and successful transaction. This article discusses the top ten negotiation issues in investment banking engagement agreements. Although the recommendations below are designed mainly to benefit the business seller, they are also intended to be reasonable to the investment bank. For the purposes of this article, ...

#MeToo: Use a “Morals Clause” in Contracts to Deter and Quash Perpetrators of Misconduct

Morals clauses (or morality clauses) have long been part of celebrity, musician, athlete and other talent contracts.  With widespread revelations of sexual harassment and other misconduct in the wake of the #MeToo movement, the use of morals causes is expanding beyond traditional talent contracts to executive employment, consulting, distribution, and other contractual arrangements. A morals clause gives one party the right to terminate the contract if the other party does not meet a certain behavioral standard. The standard ...

Two Client Case Studies: How to Raise Capital Using the New SAFE for LLCs

I created the Simple Agreement for Future Equity (SAFE) for LLCs for my LLC clients that needed a simple financing instrument to raise capital swiftly without much legal expense, while retaining pass-through tax treatment for their businesses. The SAFE for LLCs is an alternative to the Y Combinator SAFE, which is designed specifically for C-Corporations. With the passage of the Tax Cuts and Jobs Act of 2017, the LLC remains an excellent structure for many business entities, the individual owners of ...

Introducing the Simple Agreement for Future Equity (SAFE) for LLCs

Updated March 31, 2021: There are now two versions of the model form Safe for LLCs: The new post-money Safe with valuation cap (short form), which may be viewed here and purchased here; and The original pre-money long-form Safe with optional discount and valuation cap, which may be viewed here and purchased here. ----- My Simple Agreement for Future Equity (SAFE) for LLCs is the first SAFE specifically designed for limited liability companies classified under ...

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