Funding

Funding

NVCA: Pay-to-Play Provisions

By MoFo ScaleUp Team

This article is one in a series of articles explaining various terms commonly seen in term sheets issued by venture capital funds in connection with equity financings. What are pay-to-play provisions? As the name suggests, “pay-to-play” provisions require existing investors to pay (i.e., invest) in order to continue to play (i.e., maintain investor rights). Specifically, pay-to-play provisions usually require existing holders of preferred stock to purchase, on a pro rata basis, additional shares of the Company in... Read more »
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Funding

Ask a MoFo: What Are the Private Company Tender Offer Rules?

By MoFo ScaleUp Team

Private company tender offers have become increasingly common due to the significant amount of available capital from venture capital/corporate venture capital, private equity, strategic and cross-over investors as well as headwinds in the IPO and broader public markets. With companies remaining private longer, early employees and investors often seek out opportunities to receive some cash proceeds before a total liquidity event in the form of a public offering or M&A sale transaction. Tender offers can be used... Read more »
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Expansion/Formation/Funding/Guidance

I Have a Company That Was Formed in Another Country, but I Want to Set up My Business for VC Investors (Ideally Having Them Invest in a Delaware Corp.). How Do I Process and Structure Something like That?

By MoFo ScaleUp Team,

Emerging companies formed outside the United States may want to redomicile their businesses to the United States to, among other things, enhance their fundraising prospects. U.S. venture capital investors often require non-U.S. companies to flip into Delaware corporations as a condition to investment. Given that custom and preference, non-U.S. startups may choose to redomicile to the United States in advance to well position themselves to receive U.S. venture capital quickly, eliminating potential setbacks or pre-conditions during the... Read more »
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