Category Archives: Financing Issues

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Is Your Baby Your Buyer’s Collateral?

Even before dealing with the intricacies of nondisclosure agreements, employment offer letters, stock restriction agreements, and incentive plans, it is not unusual for founders to have already dreamt of an IPO or sale event. In fact, it is crucial for founders to consider when and how to make that ultimate decision to sell their companies … Continue reading this entry

Foley Ventures Launches New Website for Growth Companies

FoleyVentures
We are proud to announce the launch of FoleyVentures.com, a new website for Foley Ventures LLC, a venture capital fund formed by Foley & Lardner LLP attorneys that invests in or alongside clients. Our website features the latest news, events, and information about our funds, as well as a look at the promising companies we … Continue reading this entry

Have Accelerators Reached Saturation Point?

A few weeks ago, I attended the ribbon-cutting ceremony for the new MassChallenge accelerator space. There were hundreds of people there, including the founders of TechSandBox, an accelerator in Hopkinton, MA, and Smarter in the City, an “inner city” accelerator in Roxbury. Foley & Lardner is, of course, deeply involved with many accelerators in Boston … Continue reading this entry

Raising Money? Don’t Forget About the Tax Credits

With many states continuing to use tax credits to seed entrepreneurial growth, entrepreneurs and legal counsel must understand the applicable state-sponsored programs and position qualifying businesses to take advantage of these programs. Some government officials and scholars debate the extent to which government policy should seed entrepreneurial activity. Nevertheless, many states continue to view early … Continue reading this entry

Term Sheet Math — When Is Your 66 Percent Really 52 Percent?

When negotiating valuation for a financing, an investor may conduct detailed due diligence and present you with a term sheet that reflects multiples, discounts, comparables, and so forth. In the end, you are negotiating for percentage — how much of the company will the investor get, and how much will you keep? Your investor is … Continue reading this entry

When Do Your Investors Have Interests That May Conflict With Yours?

Good investors give you money. Great investors provide you with money, resources, networking, and experience. You need to work hard to attract great investors, with a focus on building a long-term relationship. If you are successful in attracting investor interest, the next step is negotiations. While these negotiations may be cordial, the stakes are high. You … Continue reading this entry

Briefing: 2014 Nantucket Conference

Foley & Lardner LLP was pleased to participate in the sponsorship of the 2014 Nantucket Conference. Now in its 15th year, the conference was held June 5th – June 7th in Nantucket, Massachusetts. The 2014 Nantucket Conference audience consisted of approximately 150 top entrepreneurs, investors, and tech executives. This small group of creative forward-thinkers engaged in … Continue reading this entry

Will the IPO Market Keep Its Momentum?

We’ve had a very active IPO market during the past year. A couple of reasons explain this phenomenon. First, institutional investors pulled back from the more risky initial public offerings after the crash of 2008. As the market recovered, the pension funds, mutual funds, and other institutional buyers focused their new investments on less risky … Continue reading this entry

The Secrets of a "Warm Introduction"

There is a mystique about “warm introductions.” The phrase describes the referral of an emerging company to a venture capital source through a contact who is familiar with both parties. Examples of such mutual contacts include entrepreneurs and professional advisors who are trusted by both the founders of the company seeking money and a principal in … Continue reading this entry

Thinking IPO? Timing is Everything

Notwithstanding the fact that the last several weeks did not go as planned for a few of the companies pricing or looking to price IPOs, and the associated speculation that the IPO window may be narrowing (if not closing) for tech and biotech companies, the IPO climate has recently been strong and sustained. While market … Continue reading this entry

Outrageous Scams in Financing: Not So Unusual After All

When fundraising, remember—everyone is trying to cheat you. Well, that’s not really true, but it’s obvious that we’d all be skeptical if a foreign “prince” is offering a start-up company several million dollars with almost no conditions. It might be easy to see through the prince’s scam offer, but it isn’t always that clear.… Continue reading this entry

A New “Valley of Death” for Venture Financings

Finding funds for early stage companies has always been a great challenge. In past venture financing cycles, it’s been the gap between the first venture financing (Series A) and the growth capital or mezzanine financing that many emerging companies were unable to bridge. This gap, called the “valley of death,” was attributed to a number … Continue reading this entry

Beware of Clever Angels

Angel funding is a critical source of capital for early stage companies. This type of financing will typically raise from $100,000 to $1,000,000 – with even higher amounts coming from so-called “super angels.” Yet, at this early stage, startups are very hard to value and, consequently, to determine what percentage of the company’s equity should … Continue reading this entry

Big Data: Show Me the Money

As we covered in prior blog posts, on Tuesday, November 5, 2013, Foley & Lardner LLP hosted the ninth annual FoleyTech Summit in Boston. One of the breakout sessions at FoleyTech featured a panel discussion of leading innovators in the realm financing for “Big Data” processing companies, called “Big Data: Finding the Money.” The panel … Continue reading this entry

Prepare Your Company for a Sale by Almost "Going Public"

When rumors start swirling that a company is thinking about going public, two groups often come running. First to the front door are the investment bankers, who want to both take you to the IPO and represent you afterwards on secondary offerings, acquisitions and the like. Right behind the bankers are often the strategic acquirers.  … Continue reading this entry

FOLEYTech Summit Recap: Welcoming the Next Generation of Manufacturing

On November 5, 2013, Foley & Lardner LLP hosted over 240 attendees in Boston at its 9th annual FOLEYTech Summit, titled Envision the Future: Today’s Approach to Tomorrow’s Solutions. The Summit focused on how entrepreneurs, investors, their legal counsel, and other advisors can successfully grow technology companies.  The conference was focused on specific industry tracks, … Continue reading this entry

I Would Still Pass on Crowd Funding

Several weeks ago, we explained that the SEC’s proposed crowd funding rules may make financing your start-up via websites like Kickstarter more time consuming and expensive than is necessary.  On October 23, 2013, the SEC clarified and proposed additional crowd funding rules, which, while not as onerous as they might have been, are still far from … Continue reading this entry

Envision the Future: Today's Approach to Tomorrow's Solutions

Earlier this week, Foley hosted over 240 attendees in Boston at our 9th annual FOLEYTech Summit,  titled Envision the Future: Today’s Approach to Tomorrow’s Solutions. The Summit focused on how collectively entrepreneurs, private equity investors, venture capitalists, attorneys, accountants, board members and community resources can successfully grow technology companies, specifically in the Health Care IT, … Continue reading this entry

Finding Investors and Investments: What Do You Look For?

Matching investors and investments is a two-way street. Investors and companies alike look for a good fit. Strategic investors are ideal for most growth companies. However, every company seeking capital must ensure that it fits into the particular investor’s model and goals. In fact, many investors look for particular things, and it is important to know … Continue reading this entry

The Changing Landscape of Seed Stage Financing, Part III: Revisiting the Debt vs. Equity Dilemma

In the third and final installment of this blog post series, we’ll return to last week’s question (Should I sell convertible debt or equity?), and consider the other side of the coin: choosing equity instead of debt. We’ll need to ask the gating question, though: What type of equity?  Common or [seed] preferred stock?… Continue reading this entry

The Changing Landscape of Seed Stage Financing, Part II: Introducing the Debt vs. Equity Dilemma

Following up on last week’s post regarding how to select your investors for early seed stage financing, we next turn to the tough and nuanced question of choosing between equity and debt, as you must be asking yourself: Should I sell convertible debt or equity (seed preferred)?   While there are pros and cons to each, this is … Continue reading this entry

Mark Your Calendar: 2013 FOLEYTech Summit

Foley will host its 2013 FOLEYTech Summit, Envision the Future: Today’s Approach to Tomorrow’s Solutions on Tuesday, November 5 at The Westin Copley Place  in Boston. As the successor to our Emerging Technologies Conference, the FOLEYTech Summit continues to offer the top-notch industry insight and compelling speakers you have come to expect from Foley & Lardner … Continue reading this entry