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Entries tagged “Entrepreneur”

Legal Evolution:  Serving Clients by Doing More With Less

Insight June 24, 2011

Law firms need to take a lesson from their business-clients by utilizing technology to become more efficient and cut costs to clients.

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Interpreting the Startup Visa Act

Insight June 22, 2011

On March 14, 2011, Senators John Kerry and Richard Lugar introduced a bill titled the Startup Visa Act of 2011, which is an updated version of a 2010 bill.  If passed, the act would provide temporary work visas to various kinds of foreign workers if certain financial benchmarks are met.

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Silicon Valley:  Connecting to Israel

Insight June 06, 2011

Recent moves into Israel by companies from the Silicon Valley are a reminder that there are still many untapped opportunities for economic cooperation between two of the world's foremost centers of high technology.  Innovative business cultures and common values make Israel and the Silicon Valley natural partners in the world of high-tech and venture capital.

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The Top 5 IP Mistakes Tech Startups Make

Insight June 02, 2011

It’s not easy being a technology startup. There are many challenges, including racing towards product and business development milestones, recruitment and management of employees, funding goals and restraints, fierce competition from big and small competitors, changing legal and regulatory landscapes – just to name a few.

One of the costliest mistakes a startup can make is mismanaging intellectual property rights.  A company needs to not only manage its own IP rights, but also avoid those of third parties, including competitors. To be on the safe side, therefore, intellectual property management should include efficiently protecting the startup’s IP rights while also avoiding the IP rights of others.

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Venture Capital Survey of the Silicon Valley in 2009 Third Quarter

Insight Michael Moradzadeh Michael Moradzadeh · November 16, 2009

Dow Jones VentureSource is one of the most popular nationwide venture capital date reports in the United States. VentureSources published its latest data on the development of venture capital investments in the third quarter of 2009. Below are some overviews observed by VentureSource.

  • With 616 venture deals and $5.1 billion invested, Q3 is a 6% drop over Q2;
  • IT investment barely outpaces health care;
  • Web2.0 investments surpassed the software sector for first time on record;
  • Medical device investments nearly match biopharmaceuticals;
  • Corporations investing instead of acquiring, commitments to VC-backed firms surpasses 2008 total;
  • $5 million median deal size on par with Q1&Q2, but still lowest since 1999.

It is undeniable that the investments and fundraising by venture capitalists remained at low levels in 3Q’2009, but there is room for optimism as the economy is picking up slowly and Nasdaq continued to improve. In addition, with regard to the largest U.S. deals overall in 3Q’2009, eight deals are conducted in California, such as Facebook, Tesla Motors, and Pacific Biosciences of California, etc.

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What do entrepreneurs give up to VCs?

Insight September 01, 2009

Lots of young entrepreneurs in Silicon Valley these days hope to begin their business, let people know their companies, and furthermore, draw the attention of venture capitalists, who will devote money to their new enterprise.

Something that an entrepreneur must keep in mind is something that he must give up to VCs when getting money from them – most commonly stock of the new company. Generally, a venture capitalist asks for “preferred stock” from the entrepreneurs; the owner of preferred stock enjoys shareholder rights superior to the shareholders of common shares.

Most types of preferred stock are designed to convert into common stock (for example, one share of preferred stock converts into five shares of common stock), either at the discretion of the investors (voluntary conversion) or when some preset threshold is reached (automatic conversion, for example, in a public offering scenario). Thus, the conversion condition, time of conversion (voluntary or involuntary), and the conversion rate, is always one of the most fiercely argued clauses in the investment negotiations between VCs and entrepreneurs.

Of course, another major issue to consider before seeking venture capital is the loss of control of your company. When VCs invest, they want to make sure their investments are secure, so they often require a seat on the board of directors and certain voting rights. This means an entrepreneur effectively has a new boss. This can be a good thing since VCs often add experience and credibility to the company. However, this often causes power struggles between the entrepreneur and the venture capitalists.

 

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What is a foreign filing?

Insight Michael Moradzadeh Michael Moradzadeh · August 19, 2009

Whenever a corporation or limited liability company does business (i.e. enters contracts or agreements) in a state other than the state in which they are domiciled, they are required to do a foreign filing in that state. For example, if a business is incorporated in Delaware, but has an office and/or employees based in California, that business needs to do a foreign filing in California. In such a situation the corporation will need to pay franchise taxes in both Delaware and California.

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