Funding

Funding

Early-Stage Financing Structures

By Daniel Kahan

Emerging companies looking to raise capital from outside investors most commonly do so via one of three different structures: preferred stock, convertible debt, or other convertible instruments. Learn the differences of each structure to carefully evaluate which is best for your business.
Funding

Negotiating a Series A Term Sheet

By Jim Krenn

Navigating your first preferred stock term sheet can be daunting considering the numerous provisions associated with negotiating with institutional investors. Finalizing a term sheet quickly and effectively involves understanding a few steps and lessons to streamline the process like understanding which terms are most important and why, determining market ranges for the terms, concentrating efforts on improving the terms and not assuming a non-binding term does not matter.

Funding/Guidance

New SAFE Forms Introduced by Y Combinator

By Kate Tyler

Y Combinator recently announced changes to its well-known forms of Simple Agreement for Future Equity (SAFEs). As explained by Y Combinator, these changes are in response to the evolving manner in which SAFEs are being used by start-ups to raise funds.

Expansion/Formation/Funding/Guidance

A Startup Lawyer’s Guide to the 6 Top Things a Founder Should do Before Raising Venture Capital

By John Rafferty

What steps should startups take before raising venture capital financing? Morrison & Foerster Emerging Companies + Venture Capital partner John Rafferty outlines the top six things founders should do before raising venture capital in his recent article for the Silicon Valley Business Journal. Read the full Silicon Valley Business Journal article.
Expansion/Funding/Guidance

Cryptocurrency Compensation: A Primer on Token-Based Awards

By Alfredo Silva, Ali Nardali and Aria Kashefi

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 »
Exit/Expansion/Formation/Funding/Guidance/IP

Five Cs to watch in Silicon Valley’s emerging venture capital ecosystem in 2018.

By Murray Indick

Murray Indick recently authored the article “Five Cs to Watch in Silicon Valley’s Emerging Venture Capital Ecosystem in 2018,” the first in a new monthly series for the Silicon Valley Business Journal. The article outlines what startup businesses and investors should be watching in 2018, particularly around the Bay Area. Indick details how developments such as the legalization of recreational marijuana in California, increased scrutiny of workplace and industry culture, and the rise of cryptocurrencies... Read more »
Funding

Convertible Note Conversion Caps

By Jim Krenn

In recent years, investors have increasingly asked for valuation “caps” in convertible note financing rounds. This article explains the rationale for these caps and the options for founders looking to raise capital through convertible notes.

Funding

What Does a “Down Round” Mean?

By Tim Harris

When a startup raises a new round of capital at a lower price per share as a prior round, it is referred to as a “down round.” In this video, MoFo partner Tim Harris details why this might occur and explains the antidilution adjustments needed for previous investors.
Funding

Common SAFE Mistakes

By Murray Indick and Jesse Finfrock

Startups should be mindful of common fundraising mistakes at the seed financing stage. This article provides several examples.