On Monday, September 23, 2013, Title II of the Jumpstart Our Business Startups Act (JOBS Act) went into effect allowing start-up companies to seek equity investments publicly without having to register ownership shares for public trading. Title II is a significant aspect of the JOBS Act, a post-recession initiative to stimulate the American economy, in…
Tag: Venture Capital
From Startup to IPO: The Long Haul
The Startup Let’s say you and two friends decide to pursue a company in Internet technology, Gray Matter. You three will be co-founders and hope to one day take the company public. Initially, the company will be incorporated as a C Corporation, typical for most public companies or those hoping to go public.1 Seed Money:…
Berlin the New Tech Startup Hotbed?
“The intersection of art and technology,” exclaimed the founder of SoundCloud, Alexander Ljung, when asked about why Berlin is a great place for startups.1 Young people are drawn to Berlin because of its “raw, artsy atmosphere that rivals Brooklyn’s as an icon of global hip.”2 Is Berlin’s startup scene merely a mirage or is Berlin…
Legal Necessity or Founder Faux Pas? Why VCs Don’t Like Non-Disclosure Agreements (And Why Startups Shouldn’t Ask for Them)
Every entrepreneur wants to protect their idea. Confidentiality is key to safeguarding intellectual property, and it’s only natural to want to protect your product or service so that you can get it to market before a competitor can. At first glance, when meeting with potential investors, asking them to sign a non-disclosure agreement (NDA) may…
The Impact of Media Portrayals on Private Equity and Venture Capital
Americans love their reality television. So, it is no surprise that ABC would choose to broadcast a reality competition every Friday at 9 PM. What might be more surprising is the show’s subject matter. The judges on ABC’s “Shark Tank,” are not entertainment industry insiders. Instead of looking for America’s next big star, they are…
Is Venture Capital a Tool in Community Development?
In 2003, the Over-the-Rhine district in Cincinnati, OH experienced 90% vacancy, high crime and blight. Enter: the Cincinnati Center City Development Corporation (“3CDC”). As a non-profit organization, the 3CDC has managed two major mostly-private investment funds (the Cincinnati New Markets Fund and the Cincinnati Equity Fund) to land bank properties and redevelop the spaces into…
Microsoft Ventures: A Three Pronged Benefit Program
Through venture capital, many small startup tech businesses have been able to obtain the necessary funds to start their business. The success of these startups provides investors with not only an opportunity to profit on the new organization’s success, but also allows many large corporations to invest in startups as a means to spread their…
A New York State of Mind: In-State Private Equity Program Invests in New York Start-Ups
Originally founded by the State of New York Comptroller’s office in 1999, New York’s In-State Private Equity Program has certainly made an impact on the state’s best and brightest new businesses.1 Since its creation, the program has intended to support native New York businesses while also generating hopefully solid returns for the state.2 Historically, and…
Legal Barriers to Japan’s Venture Capital Industry
Although Japan is one of the leading countries in the world in terms of GDP, the success of its venture capital industry is questionable, especially when compared to that of the US. In Japan, there are about 1,500 venture capital deals annually, valued at $1.9 million per deal, whereas in the US, there are about…
VC Firms and Non-Disclosure Agreements: A Changing Landscape
Traditionally venture capital (“VC”) firms looking to add potential portfolio companies have been unwilling to sign non-disclosure agreements (“NDAs”) during initial discussions with entrepreneurs about their technologies and execution strategies. This unwillingness from VC firms to sign NDAs stems from a number of reasons, “including a desire to avoid restricting their ability to seek out…