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

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Sponsorship Agreements: ROFOs and Why You Need Them

Imagine that last year you sponsored a wonderful event with a return on investment that exceeded expectations. The sponsorship agreement has now expired by its terms, and you have learned that the event is seeking alternative sponsors for your former rights, as well as partners for new properties, including digital and internet-of-things partners (See, e.g., SAP digital tools). You would have loved to have the first seat at the table in negotiating a renewal and for the new opportunities, but you must now negotiate new terms ...

Term Sheets: Five Legal Tricks To Make Them Work For You

One of my first questions when asked to draft the agreement for a client's new business deal is whether a term sheet (also known as a letter of intent or summary of terms) has been prepared. A term sheet is a short and sweet document that sets out the parties' mutual understanding of the main terms they will agree on in a later definitive agreement. The key word is mutual: while you and your counterpart may have agreed a deal over a nice wine dinner, your ...

Your Right to Terminate: Quite Possibly the Most Important Right In Your Business Contract

It's almost inevitable. At least three or four times a year, the phone will ring or an email will arrive with the client saying something like this: "John, it's not going as we had hoped. We need to know how to get out of this deal, and the consequences. How soon can you review the contract? Rewind 6-12 months prior to this message, when the sky was blue, the birds were singing, and this was going to be the best deal in history. Indeed, ...

How to Maximize Your Minority Rights in Small-Scale Private Equity Investments

Even if you consider yourself a small-scale investor in private companies relative to today's private equity giants, you should seek certain basic minority rights to protect your investment and enhance your exit opportunities.  In fact, most minority protections that a small-scale investor should seek are exactly the same as those that any larger PE fund would require. Among my clients, these small-scale private equity investments generally range from $100,000-$3,000,000 for purchases of 10%-30% of a company's outstanding equity.  They ...

Introducing the Simple Safe Spreadsheet (for pre- and/or post-money Safes)

There are two versions of the Simple Safe Spreadsheet: New (March 2021)!  To view and purchase the new post-money Simple Safe Spreadsheet, please click here. This spreadsheet is for use with Y Combinator's post-money Safe, Valuation Cap (No Discount). To purchase a downloadable Excel version of the Simple Safe Spreadsheet for pre-money Safes, click here. Thank you for supporting this project and please stay tuned for future startup friendly resources. ***** Y Combinator’s Simple agreement for future equity ...

Top 9 Warning Signs in a Business Deal

One of the benefits of being a corporate lawyer is the opportunity to participate in a variety of interesting deals.  In these, you encounter a motley crew of characters.  You witness a range of negotiating styles and tactics, and learn which are effective and which are not. You see some ventures succeed and many others fail. In the great theatre of the deal, there are rare moments in which something may not feel right to the lawyer or the client about a proposed business ...

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