In the wake of the 2012 shooting at Sandy Hook Elementary in Newtown, Connecticut, Americans turned again to the familiar gun control debate. This time, however, an unlikely player was thrust into the spotlight: private equity firms. As the public conversation about gun violence ensued, the pro-gun crowd stood their ground while the anti-gun lobby…
Category: Blog Articles
Startups, Secrets and Patents
Should your startup file for a patent or keep its invention a trade secret? A patent essentially grants rights to exclude others in the making, selling, or using of a certain invention.1 Patents are granted for a limited term.2 A utility patent, the most common type, will expire twenty years after the earliest priority date.3…
Direct Private Equity
Private equity firms offer investors an investment opportunity that can result in fruitful returns. However, one of the greatest disadvantages associated with such investments is the high management fees investors must pay to the firms. In the past few years, direct private equity has grown in popularity among both institutional and individual investors.1 By putting…
Demand Dividends: An Emerging Alternative to Equity Financing
Definition of Demand Dividends Demand dividends are an investment vehicle where the investee makes periodic payments to the investor based on a percentage of free cash flow, up to an agreed upon multiple of the investment.1 Demand dividends factor the fact that an enterprise can grow revenue without generating cash. Payments are made after a…
Jeonse: Private Lending in the Korean Real Estate Market
The Jeonse system is a product of South Korea’s development era during the 1960’s and ‘70s. This was a period of rapid urban migration, and in order to facilitate mobility, the South Korean government passed legislation to restrict banks from lending to real estate developers, landlords, or tenants. The idea of “Jeonse” or “helping one’s…
Convertible Notes and the Golden Age of Seed Financing
What is a Convertible Note? A convertible note is essentially short-term debt that converts into equity at the closing of a Series A round of financing.1 Essentially, an investor will loan a certain amount of money to a startup in return for a note with terms defining how the equity distribution will work.2 Generally, the…
Crowdfunding’s Intermediaries’ Obligation to Educate
When President Barack Obama signed the JOBS Act into law on April 5, 2012, Section 3(a) of the Securities Exchange Act of 1934 was amended to include a new definition for “funding portal.”1 Funding portals, along with brokers, are the lucky players through which all crowdfunding transactions must be conducted.2 But just how lucky are…
Private Equity Investment in Global Shipping Industry
Over 90% of world trade activity depends on the shipping industry and a global fleet of 58,000 ships.1 Shipping has traditionally been controlled by wealthy families that have been in the business for a very long time, some for centuries.2 However, shipping has changed and has become an asset for investors.3 Shipping is a cyclical…
It May Be Time to Revisit Institutional Shareholder Activism
Institutional shareholder activism has often been viewed as a positive corporate governance tool to ameliorate shareholder collective action problems and keep management teams and boards of directors in check, particularly for large public companies with a widely dispersed group of shareholders. Typically, an activist shareholder (ranging from large individual stockholders to institutional investors) will use…
Did You Hear That Tweet, Wall Street?
Almost every user of social media like Facebook and Twitter knows that information they post online will be read by someone else, and might even be repeated to others. But what if the social media user was someone in the financial industry or a giant corporation announcing a strategic move or product development, and the…