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The Form is Always Wrong
Form a Company, Articles Dan DeWolf Form a Company, Articles Dan DeWolf

The Form is Always Wrong

By Dan DeWolf and Samuel Effron

Mintz attorneys are often asked as to why we don’t simply provide “forms” on our website that can be downloaded and used.  After all, a number of law firms let you download term sheets and other forms such as SAFEs. Our simple answer is: THE FORM IS ALWAYS WRONG! Legal forms are merely starting points and most forms are typically only half an inch deep. A successful enterprise truly needs so much more depth than what is provided in a basic form.

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SAFEs: The (Not So) Simple Agreement for (Potential) Future Equity
Raise Capital, Articles Dan DeWolf Raise Capital, Articles Dan DeWolf

SAFEs: The (Not So) Simple Agreement for (Potential) Future Equity

By Dan DeWolf and Brian Novell

Historically, most start-up companies were funded either by the offering of equity or by loans in the form of convertible promissory notes. Recently, however, there have been some hybrid instruments created to fund start-ups. Most notably, and quite popular these days, is the use of an instrument called a SAFE. “SAFE” is an acronym for “simple agreement for future equity.”

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Various Ways to Raise Capital
Raise Capital, Articles Dan DeWolf Raise Capital, Articles Dan DeWolf

Various Ways to Raise Capital

By Dan DeWolf

The world of raising capital has been evolving over the last several years. Offerings of securities generally used to fall into two main buckets: (i) private placements under the old Rule 506 or (ii) a public offering. With the implementation of various provisions of the JOBS Act now mostly complete, the array of choices has increased exponentially and include crowdfunding, crowdsourcing by general solicitation for accredited investors, IPO light under the new Reg A+ rules, and confidentially submitted initial public offerings. No one size fits all and issuers, bankers, and legal counsel should look carefully as to the context of the situation to determine which format makes the most sense for a particular offering. We thought it might be helpful to provide a chart of the various alternatives for offerings now available.

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Revised Rule 504: Another Tool in the Toolkit to Raise Capital
Raise Capital, Articles Dan DeWolf Raise Capital, Articles Dan DeWolf

Revised Rule 504: Another Tool in the Toolkit to Raise Capital

By Dan DeWolf and Brian Novell

If there is one common theme that entrepreneurs tend to have, it is fire – meaning, many entrepreneurs are passionate about an exciting idea that they seek to turn into a business. However, entrepreneurs often quickly realize that, in order to make their fire glow high and bright for the world to see, they need fuel – meaning, capital.

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FinTech Innovation Lab: A Resource for Fintech Start-ups
Raise Capital, Articles Dan DeWolf Raise Capital, Articles Dan DeWolf

FinTech Innovation Lab: A Resource for Fintech Start-ups

Co-founded in 2010 by Accenture and Partnership for New York City, the FinTech Innovation Lab, offers newly-emerging financial technology companies the opportunity to participate in a 12-week mentorship program. During the program, participants are invited to engage in a multitude of events including workshops, panels, and meetings with leaders in the financial technology industry.

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A Balanced Approach to Founder's Equity
Form a Company, Build Your Team Dan DeWolf Form a Company, Build Your Team Dan DeWolf

A Balanced Approach to Founder's Equity

By Dan DeWolf and Samuel Effron

The most successful start-up ventures are companies where the economic interests of the various stakeholders are sufficiently aligned.  If an enterprise can find the right balance among the competing interests of the founders, investors, management, and directors, it has a far greater chance of succeeding. If the right balance is not reached, there will be too much time spent on in-fighting instead of being laser focused on accelerating the growth of the enterprise.

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Seniority Matters
Raise Capital, Articles Dan DeWolf Raise Capital, Articles Dan DeWolf

Seniority Matters

By Dan DeWolf

There is little doubt that activity in the trading of secondary shares of private companies remains robust. Private companies are staying private longer and there seems to be an unlimited demand to buy into the newest “Unicorn” anointed each week.  As the market for secondary shares stays strong, valuations seem not to matter much to most buyers. Additionally, many buyers seem to pay little attention to whether they are buying senior preferred stock at the top of the stack, as compared to junior securities or common stock sold by many former employees.  But as we all know, things that can’t go on forever, don’t.  And, as Warren Buffet once famously said:  only when the tide goes out do you discover who has been swimming naked.

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What is Venture Capital?
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What is Venture Capital?

By Dan DeWolf

Most of us go through our lives down a certain path. We grow up in our house or apartment; we go to school; we get a job; and eventually we grow up (one way or another) and live out our lives: sometimes happily, sometimes not so happily, and most times a little bit of both. In the course of this journey, many of us dream about starting something new, such as a new business based on a new concept or new paradigm. For many of us it is just a daydream. But for some, it is a call to action. Time and time again, an individual figures out a new way to look at things. Then from a scrap of an idea, and against great odds, this individual begins to build a new business.

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What is a Term Sheet?
Raise Capital, Articles Dan DeWolf Raise Capital, Articles Dan DeWolf

What is a Term Sheet?

By Dan DeWolf

When a venture capital firm is interested in a company it will meet with the management team numerous times to understand fully the business model and to learn more about the management. At some point in the process, the venture capital firm will decide that the investment is worth pursuing and will present a Term Sheet to the company. The Term Sheet (which is a nonbinding letter of intent) sets forth the basic terms and premises upon which the venture capital firm would be willing to invest.

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