| |
| |
| |
| What Is All the Talk About? | |
| |
| |
| What Is Venture Capital? | |
| |
| |
| How Venture Capitalists Talk | |
| |
| |
| Should You Start Your Own Company? | |
| |
| |
| "You Can Make it... Will Someone Buy It? | |
| |
| |
| |
| Where Should I Look for Seed Capital? | |
| |
| |
| Introduction | |
| |
| |
| Angels | |
| |
| |
| Seed Capital from VCs | |
| |
| |
| State Aid | |
| |
| |
| Federal Grants and Loans | |
| |
| |
| Commercial Banks | |
| |
| |
| Should I Have a Placement Agent? | |
| |
| |
| Venture-Capital Clubs | |
| |
| |
| Concept IPOs | |
| |
| |
| The Shell Game | |
| |
| |
| Multiple-Round Strategy | |
| |
| |
| Case Study in Finding Money: A Reality Check | |
| |
| |
| |
| How on Earth Do I Put a Value on My Company? | |
| |
| |
| Portfolio Management | |
| |
| |
| Nonnumerical Factors | |
| |
| |
| |
| What Legal Form Works Best for You? | |
| |
| |
| S Corporations | |
| |
| |
| Limited Liability Companies | |
| |
| |
| Corporation versus Limited Liability Company | |
| |
| |
| |
| What Will My Corporation Look Like? | |
| |
| |
| Corporate Charter | |
| |
| |
| Payment for Stock | |
| |
| |
| Purposes | |
| |
| |
| Miscellaneous Charter Provisions | |
| |
| |
| Restrictions on Transfer | |
| |
| |
| Preferred Stock Provisions | |
| |
| |
| Preemptive Rights | |
| |
| |
| Indemnification | |
| |
| |
| Bylaws | |
| |
| |
| Other Organizational Documents | |
| |
| |
| State of Corporate Domicile: Delaware or Somewhere Else? | |
| |
| |
| |
| Tax Discussion for the Nonlawyer: Minimizing Taxes in the Early Stages | |
| |
| |
| Cheap Stock to Employees and Promoters: The "Eat-'em-All-Up" Preferred Stock Approach | |
| |
| |
| Stock for Services: The "Passage-of-Time" Approach | |
| |
| |
| Section 83 and Stock Subject to Vesting | |
| |
| |
| |
| Drafting the Business Plan and the Placement Memo | |
| |
| |
| Risk Factors | |
| |
| |
| Certain Transactions | |
| |
| |
| Business Plan | |
| |
| |
| The Marketing Section: The Single-Most Important Section for Early-Stage Investments | |
| |
| |
| Business Strategy and the Single-Product Problem | |
| |
| |
| Management | |
| |
| |
| Beefing up the Board of Directors | |
| |
| |
| Other Issues | |
| |
| |
| Projections--The "Bull's-Eye" Theory of Forecasting: "Shoot High," | |
| |
| |
| The Promissory Nature of the Forecast: "Shoot Low," | |
| |
| |
| |
| You've Set up the Company and Negotiated the Price: What Are the Investors' Terms? | |
| |
| |
| Herein the Term Sheet | |
| |
| |
| What Will the VCs Want for a Security: Common Stock? Preferred Stock? Debt? Warrants? | |
| |
| |
| Common Stock | |
| |
| |
| Warrants | |
| |
| |
| Preferred Stock | |
| |
| |
| Conversion and Redemption | |
| |
| |
| Preferred Stock Redeemable at the Option of the Holder | |
| |
| |
| Participating Preferred | |
| |
| |
| Antidilution Protection for Investors | |
| |
| |
| Who Controls: Me or Them? | |
| |
| |
| Registration Rights | |
| |
| |
| |
| I Have a Letter of Intent: What's in the Contract? | |
| |
| |
| Stockholders Agreement | |
| |
| |
| Rights of First Refusal | |
| |
| |
| |
| Selling Stock, Privately ... and Legally | |
| |
| |
| If Reg. D Is Not Available? | |
| |
| |
| |
| Compensating Your Key Executives | |
| |
| |
| The "Carrot" Approach: Equity Incentives | |
| |
| |
| Stock Options | |
| |
| |
| Incentive Stock Options | |
| |
| |
| Nonqualified Stock Options | |
| |
| |
| ISOs versus NSOs | |
| |
| |
| "Grossing Up," | |
| |
| |
| Miscellaneous Items | |
| |
| |
| The Carrot-and-Stick Approach: The Employment Agreement | |
| |
| |
| Restrictions on Post-Employment Behavior: Noncompetition, Nondisclosure, and "Work-for-Hire" Clauses | |
| |
| |
| |
| How to Go to the Promised Land (i.e., Go Public) | |
| |
| |
| Whether or Not to "Go Public," | |
| |
| |
| Preparation for the Public Offering | |
| |
| |
| Liability | |
| |
| |
| "Directed Shares" and "Hot Issues," | |
| |
| |
| Lock Ups and Other Obstacles to Liquidity | |
| |
| |
| |
| Financing with Strategic Investors: Joint Ventures | |
| |
| |
| Typical Business Contexts | |
| |
| |
| Negotiation Points | |
| |
| |
| The Duty of Candor | |
| |
| |
| Corporate Opportunity and Self-Dealing | |
| |
| |
| Conclusion | |
| |
| |
| Index | |
| |
| |
| About the author | |