Financing Archives - John Dorsey PLLC

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 ...

Jmdorsey2023-02-26T10:12:36-08:00

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

Updated February 22, 2023: All versions of the model form Safe for LLCs are available at JDForm, including the: Post-money Safe for LLCs with valuation cap (short form); Post-money Safe with discount (short form); and Pre-money long-form Safe with optional discount and valuation cap (original). The Safe for LLCs is the first Safe specifically designed for limited liability companies classified under U.S. federal tax law as partnerships or disregarded entities. Do not use the Safe ...

Jmdorsey2023-02-26T10:20:41-08:00

Free, Publicly-Available Startup Company Forms and Document Generators

The angel investor network Blue Water Angels has compiled a nice summary of free, publicly-available, startup forms and document generators, including direct links to those forms and generators, all available here. Remember: even if you start with a good form, always engage your favorite corporate lawyer to review your documents before signing off. The devil is in the details.

Jmdorsey2021-06-11T13:11:20-07:00

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 ...

Jmdorsey2021-06-11T13:11:20-07:00