Author: MoFo ScaleUp Team

Exit/Guidance

How to Ensure Your Food and Beverage Company Will Be Ready for a Value-Maximizing Sale

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You’ve created a great product and built a valued brand. You’ve devoted countless hours to building relationships with key distributors and retailers, designing attractive packaging, and forging a social media presence. But are you doing everything to ensure that your business is set up for sale? Have you taken the steps to address the potential pitfalls—those issues that will reduce the value of your company in a sale or even scare away potential buyers? If... Read more »
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Expansion/Funding/Guidance

Cryptocurrency Compensation: A Primer on Token-Based Awards

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On March 19, 2018, Morrison & Foerster LLP attorneys Alfredo B. D. Silva, Ali U. Nardali and Aria Kashefi published a thought piece in Bloomberg Law on legal issues related to use of blockchain tokens as service provider compensation. In the past year, tokens have nudged their way into mainstream consciousness with the proliferation of “initial coin offerings,” or “ICOs,” and the blockbuster rises – and drops – in the prices of cryptocurrencies. An emerging... Read more »
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Guidance

Comprehensive updates to NVCA Model Legal Documents for the first time since 2014

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The National Venture Capital Association (NVCA), the venture community’s trade association, has announced long-awaited updates to its model legal documents.  NVCA forms are widely used as the definitive agreements in preferred stock financings and are quite familiar to members of the emerging companies/venture capital community. The January 2018 updates impact the form Certificate of Incorporation, Preferred Stock Purchase Agreement, Voting Agreement, Investors’ Rights Agreement, and Right of First Refusal and Co-sale Agreement.  Highlights of the... Read more »
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IP

Patent and FDA Considerations for Life Sciences Startups

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Careful IP planning is especially important in the life sciences, in which companies often rely on only a handful of patents to protect a high-market value product such as an FDA-approved drug. In this article, MoFo counsel Lisa Silverman details the importance of patent protection for life sciences companies, highlighting the long-term benefits of patent term extension and how to identify which assets to prioritize. Originally appearing in the Daily Journal, read the article here.
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Funding

Convertible Note Conversion Caps

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Historically, one of the main advantages of funding a startup through convertible notes has been the ability to avoid setting—or even discussing—a valuation for the company. Investors received a discount (often between 10% – 30%) off the price per share paid in the next “qualified” financing round by future investors (i.e., a financing where at least a specified amount is raised triggering an automatic conversion of the notes into equity). This structure kicks the valuation... Read more »
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Expansion/IP

Startup Diligence is more than ‘Basic IP Diligence’

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This article explains that intellectual property is an important indicator of a company’s enterprise value for potential investors. When considering a technology-based startup, it is particularly important to perform a robust assessment to ascertain the possible hidden risks that could emerge as the company matures. The piece outlines how to identify issues around prior employment, contractors and consultants, and existing market participants, in addition to basic IP diligence factors. Read the full article.
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Funding

10 Steps to Increase the Odds of a Successful Angel or Seed Fundraising Round

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Starting a business is incredibly hard. You need a great idea—ideally one that is disruptive and will scale and that you care about passionately. You need to recruit an amazing team, and ideally, have co-founders you trust and respect. And for those not blessed with inherited wealth, you need money. Many entrepreneurs confide that raising capital is their hardest task. They delay and delay any approach to the capital markets for as long as possible.... Read more »
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