For years, regulators have scrutinized the tax practices of private equity firms on several fronts. One relatively recent example occurred in 2012 when the New York Attorney General led an investigation regarding private equity funds’ conversion of certain management fees into investments that are eligible for more favorable tax treatment, also known as fee waiver…
Category: Blog Articles
Marijuana and Banks II
On August 29, 2013 Deputy Attorney General James Cole issued a memo concerning enforcement of the Controlled Substances Act “in light of state ballot initiatives that legalize under state law the possession of small amounts and provide for the regulation of marijuana production, processing, and sale.”1 The memo noted that “the federal government has traditionally…
WhatsApp Shows What’s Possible for Venture Capital Investors
WhatsApp is a cross-platform messaging service that is available on Internet-enabled devices. The app allows users to send messages via the Internet to other users of the app. The big selling point is that it costs 99 cents per year, with no added charges no matter where in the world a user sends a message….
South Korea’s Grand Plan: Startup and Venture Capital Steering the Future Economy
Start-ups have been a new force for the economies of many technologically advanced countries in recent years, more notably after the beginning of smartphone/ applications era with the many application start-ups that have an expansive platform to connect with customers. The number of Korean start-ups has almost doubled to over 28,000 from just over a…
Unpaid Internships and Intellectual Property Rights
Are unpaid internships still worth the trouble? For an early stage startup, the offer of free work may seem invaluable. Although unpaid interns may aide a startups bank account, hosting one may leave you open to severe future legal consequences. According to The Department of Labor, the following six legal criteria must be met in…
New Faces in Venture Capital
Often, when we think of the people involved in financial markets, images of old, stodgy men come to mind. But this is not usually the case, especially in today’s modern venture capital markets. Especially in the technology industry, venture capitalists hope to get in on the ground floor of startups that will become “the next…
Google’s $3.2 Billion Acquisition of Nest is a Big Win for Silicon Valley Venture Capitalists, Signals Search Giant’s Increasing Presence
On January 13, 2014, Google announced it was purchasing Nest Labs, known for making “smart” home thermostats, for $3.2 billion.1 The acquisition was Google’s biggest since a 2012 purchase of another hardware maker, Motorola.2 The US Federal Trade Commission approved the deal in early February.3 Google’s purchase of Nest produced exceptional returns for several Silicon…
Royalty Financing: An Emerging Alternative to Equity Financing
Definition of Royalty Financing Royalty financing is an investment vehicle where the investor lends money to investees against its future revenue streams.1 The investor is repaid via royalties, a regular stream of payments that are typically calculated based on a percentage of the company’s gross revenue.2 Since repayments are based on a percentage of revenues,…
Marijuana and Banks
On January 23, Attorney General Eric Holder announced that the federal government was taking steps towards making it easier for depository institutions to do business with marijuana sellers.1 Holder cited “public safety” concerns noting, “substantial amounts of cash just kind of lying around with no place for it to be appropriately deposited is something that…
How Private Equity Can Hedge Their Bet with ObamaCare
The Affordable Care Act, also known as ObamaCare, came into effect earlier this year. Not surprisingly, ObamaCare has proven to be an extremely controversial and divisive issue. Many opponents of ObamaCare argue that the law will prove to be extremely detrimental to the economy by burdening companies with increased costs and regulations.1 The relevant topic…