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.


Director Duties and Augmenting the Corporate Brain

By Jim Ryan

Artificial intelligence and machine learning (for ease of readability, this article uses “AI” to refer to the broad category of machine learning and artificial intelligence) are poised to impact all aspects of society and business. However, the effects that those same technologies may have on the decision-making process and operations of corporate boards of directors have not yet come under the mainstream spotlight. AI is poised to have equally impactful effects on boards’ decision making processes and operations.


Introducing the Public Benefit LLC

By Jesse Finfrock

Four years after Delaware first enacted its Public Benefit Corporation (PBC) statute, the state has taken another step forward in advancing legal entity forms for social enterprises. Learn more about the newest Delaware legal entity: the Public Benefit Limited Liability Company, or PBLLC.


Seeking a U.S. Exit? Get on the Right Track!

By Simon Arlington, Murray Indick, Graeme Sloan and Greg Joynson

With tech M&A activity continuing to increase, more UK-based startups are exploring the possibility of a US exit. This chart details the differences sellers may encounter when seeking a US exit.


Delaware Considers New Statutory Public Benefit Limited Liability Company

By Suz Mac Cormac, Alfredo Silva and Jesse Finfrock

In April 2018, the Delaware State Bar Association’s Corporate Law Section approved an amendment to the Delaware Limited Liability Company Act that allows for the formation of public benefit limited liability companies (PBLLCs). The proposed new PBLLC statute – Subchapter XII of Chapter 18, Title 6 of the Delaware Code (PDF) – closely tracks the Delaware public benefit corporation (PBC) statute, so its material features will be familiar to most social entrepreneurs and impact investors.


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.

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

By MoFo ScaleUp Team

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 »

Cryptocurrency Compensation: A Primer on Token-Based Awards

By Alfredo Silva and Ali Nardali

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 »

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

By MoFo ScaleUp Team

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 »

Patent and FDA Considerations for Life Sciences Startups

By MoFo ScaleUp Team

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.

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.


Startup Diligence is more than ‘Basic IP Diligence’

By Desmond O'Sullivan

When considering a technology-based startup, potential investors may look beyond a company’s intellectual property as an important indicator of its enterprise value. 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.


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.