Emerging Companies Insider

The Emerging Companies Insider blog focuses on recent developments in the law affecting startup and emerging growth companies and their investors, including choice of entity, shareholders’ agreements, issuance of equity to employees, preparing for and executing a capital raise, exit strategies and the JOBS Act and its impact on how companies can and should raise capital from investors.

Recent Blog Posts

  • M&A Market Outlook Strong for Emerging and Growth Stage Companies In a recent study polling more than 400 business owners, founders and leaders across the U.S., Harris Williams reports that despite mixed positions on the nation’s general political climate, interest in M&A among middle market private companies continues to rise. Copyright: bas121 / 123RF Stock Photo Key findings included: 95% of survey respondents are interested in M&A over the next three years – up from 81% in 2015 65% said they were interested in acquiring other companies 52% said they would consider selling 36% would consider... More
  • Why Your Company Name Matters –The Right Name Accelerates Growth and Saves You Marketing Costs When Every Dollar Matters An abbreviated version of this article will appear in the American Bar Association’s Business Law Today, Fall 2017 Edition. Is your startup brand so strong that consumers tattoo the logo on their arm? Or so hard to pronounce that investors, vendors and customers are disinclined to do business with you? According to a study published in the peer-reviewed academic journal Venture Capital, your company name matters even more than you think.  The study, entitled “The Effect of Company Name Fluency on Venture... More
  • One Step Closer: US House Passes “HALOS Act” Legislation Clarifying VC Pitch Events are not “General Solicitation” On January 10, 2017, the U.S. House of Representatives passed a bill commonly known at the “HALOS Act”, which directs the Securities and Exchange Commission (SEC) to revise Regulation D.  Prior to the proposed amendment, Regulation D exempts certain offerings from SEC registration requirements but prohibits “general solicitation” with respect to such offerings.  The proposed amendment states that the prohibition shall not apply to events with specified kinds of sponsors — including “angel investor groups” unconnected to broker-dealers or investment advisers... More
  • Founders Keepers? Even Founders Must Purchase Their Stock Founding a company is an exciting moment in an entrepreneur’s career.  But even on Day 1, there are steps entrepreneurs should take to avoid major financial and diligence issues in the future.  In this series of posts, we’ll cover some basics that often trip up founders to help guide you through those early steps. Entrepreneurs often assume they own their company de facto (i.e., by virtue of the fact that they formed it, without any other required action)- a proposition that... More
  • Stay Tuned: Fox Rothschild hosts panel discussion “Venturing into 2016 with Equity Crowdfunding” Montréal, QC, Canada; Thursday, April 7, 2:30pm Title III Equity Crowdfunding goes live in May 2016.  As co-chairs of the ABA’s Angel Venture Capital Subcommittee, Fox Rothschild attorneys Emily J. Yukich and Matthew R. Kittay will host a panel conversation featuring Amos J. Richards, General Counsel of leading equity crowdfunding platform EquityNet, alongside former SEC  Division of Corporation Finance Special Counsel David J. Lavan, for insights on legal and practical implications. Unlike traditional capital markets, the crowdfunding market has no gatekeepers – underwriters,... More
  • Convertible Notes: Survey on Market Terms (Economic) As chairs of the American Bar Association Business Law Section’s subcommittee on Angel Venture Capital, Fox Rothschild is undertaking an ongoing analysis of early stage convertible notes and their current market terms. Over a series of blog installments, we will analyze the state of the market and present results of the subcommittee’s informal national survey of convertible note term trends. As Fox Rothschild attorney Alexander Radus noted in our first entry in this series, convertible notes offer advantages to priced equity rounds for early... More
  • DOA NDAs and What Early-Stage Companies Can Do About Them As legal advocates, we counsel companies to enter into NDAs (non-disclosure or confidentiality agreements) whenever they share proprietary information.  An NDA serves several purposes.  It substantiates the date and terms on which information was shared, and if properly drafted, it can be enforced to halt damaging use of the information and give the company a boost when seeking compensation for any resulting damages. A company undergoing a private equity investment or merger transaction enters NDAs with at least two parties: investment banks which may negotiate the deal and any potential acquirer before substantive meetings takes... More
  • Liabilities Loom in the “Sharing Economy” Founders and investors alike are often rewarded for betting on “disruptive” technologies, which in some cases means pushing legal boundaries.  Sometimes, early stage companies hoping to mimic the success of companies like Uber and Airbnb brush issues aside related to employment law, municipal regulations or tort liability at their own peril. Several notable “sharing economy” companies have recently reached multi-billion dollar valuations, causing them to become bleeding-edge targets for serious law suits and regulatory efforts.  As the sharing economy develops, novel and far-reaching liabilities mushroom around... More
  • Cheers for Tiers – SEC Provides Regulation A+ Equity Crowdfunding Clarity Copyright: / 123RF Stock Photo At an open meeting on March 25, 2015, the SEC adopted final rules to facilitate smaller companies’ access to capital via update and expansion of Regulation A, summarized in this press release. A Two-Tier Approach One core feature of the new rules is the establishment of a tiered system for these so-called “mini-IPO” style offerings, which will allow non-accredited investors to participate in two types of offerings: Tier 1, for offerings that raise up to $20 million in... More