Archive for the ‘Fundraising’ Category

Pro Forma Cap Tables – Critical in all Financing Rounds

For early-stage startups looking to raise a pre-seed financing round (usually from either friends and family, angel investors or Micro VCs), the Simple Agreement for Future Equity, or SAFE, has become a mainstream, company-friendly mechanism to complete the financing. (See goodcounsel’s original post about SAFEs, here.) goodcounsel often proposes or supports the use of the […]

Changes to Illinois Angel Tax Credit Rules [Updated]

UPDATE 10/26/16: Credits are used up for 2016, and the Illinois Angel Investment Credit Program is scheduled to expire on December 31, 2016. It remains to be seen whether the Illinois legislature might reauthorize the program. We’ve written in a past edition of our goodnews newsletter about an Illinois program to encourage investment in innovative early-stage companies, […]

Will Illinois be next to adopt “intrastate crowdfunding”?

Would you like to accept small investments in your company from your Aunt Rose, your brother-in-law Bobby and your best friend from high school? Many people are surprised to learn that, unless these friends and family members are high-net worth investors, this is not the kind of thing that is safe to do – not, at least, if you […]

Convertible debt — hold the debt

We do a lot of convertible notes at goodcounsel, so we try to keep with the state of the art. A year or so ago, some West Coast incubators teamed up with the Wilson Sonsini law firm to create a type of convertible equity for seed, financings intended to replace convertible debt. Convertible debt minus […]

Proposed “Regulation Crowdfunding” = disappointment

In an earlier post, I described the major points of the proposed crowdfunding rules issued by the SEC (known as “Regulation Crowdfunding”) pursuant to the JOBS Act. Now, I’d like to offer my reactions. My basic reaction is this: you have got to be kidding me.

What’s in the SEC’s proposed crowdfunding regulations?

At last, the Securities and Exchange Commission (SEC) has proposed “Regulation Crowdfunding” (the rules implementing Title III of the JOBS Act). I apologize for my delay in posting about this, but in my defense, the release containing the proposed rules is 585 pages long. (The length alone gives one pause about how workable this regulatory […]

Getting by with a little help from your friends

“If I just want to raise some seed capital from friends, I don’t have to worry about any legal issues, right?” Ah, if only life (and the law) were that simple. In the recent edition of goodnews, goodcounsel’s newsletter, we discussed what you need to think about when you think about taking investment capital from […]

Crowdfunding legislation hits turbulence as it nears the finish line

UPDATED: The JOBS Act passed Congress and was signed into law by President Obama. Final bill text here. I’ve previously posted (here and here) about the crowdfunding measures that have been working their way through Congress. The House has now passed the JOBS Act (text here, for the truly wonky), which contains these measures, and […]

Crowdfunding your startup

Crowdfunding – the aggregation of small payments from a broad base of funders – has been enabled by the technologies of the Internet, particularly social media and easy electronic payments. Filmmakers have been bootstrapping movies with crowdfunding for some time. It has been widely used in the non-profit arena. Kickstarter operates a popular crowdfunding platform […]

Are you still accredited?

Companies that have private investment documents drafted prior to passage of Dodd-Frank in 2010 should be very careful before reusing these documents. Section 513 of Dodd-Frank brought about an important change to the definition of “accredited investor” set out in the Regulation D exemptions to registration under the Securities Act of 1933. The $1,000,000 net worth standard […]