Flip Transactions

Foreign startups “flip” into a U.S. corporate legal structure for various considerations, including: exit opportunities (whether through acquisition or the public market); potential higher valuations; broadening their investor base (some U.S. institutional investors may have internal rules prohibiting their investment in non-U.S. companies); and most commonly, accessing U.S. venture capital, which generally only invests in …

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Special Topics in Creative Structures: The Common Stock Financing

Venture capital is drying up. So sayeth every oracle of Silicon Valley and the rest of the startup ecosystem. I don’t know that I agree with them (a good question – for another time), but I do know that belt-tightening times like this often lead entrepreneurs to look beyond the preferred equity-style investment structure …

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Smart Contracts

A leading test case for “smart contracts” has stumbled seriously by being hacked. While the underlying tools for making smart contracts are not at fault, the mishap provides a serious challenge to true believers’ view of smart contracts. These believers see in smart contracts a computerized world free from human intervention, including the law. However, …

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An Overview of §280G

In corporate mergers and acquisitions, only a handful of corporate representatives control the outcome of negotiations. Such representatives of selling corporations can unfairly choose deals that provide handsome payments to the representatives while leaving less for shareholders. To prevent this, Internal Revenue Code (“IRC”) §280G prevents both selling and acquiring corporations involved in a corporate …

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