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Question: Do VC and Private Equity Funds have to invest in C-Corps, or can they invest in S-Corps and LLCs? Our Take: Most often, C-Corps rule the day. S-Corps can only issue one class of stock meaning that VCs and PEs can not get get the benefits of liquidation preferences and other preferred terms. For […]
Question: Do VC and Private Equity Funds have to invest in C-Corps, or can they invest in S-Corps and LLCs?
Our Take: Most often, C-Corps rule the day. S-Corps can only issue one class of stock meaning that VCs and PEs can not get get the benefits of liquidation preferences and other preferred terms.
For a complete discussion, check out a prior post on the issue.
Question: I am in the process of getting my startup venture off the ground and have run into a slight road block. I have developed the business case, and fleshed out the product requirements, but need a strong developer to the product. Problem is, I have not gotten any funding yet, therefore cannot pay someone […]
Q: We’ve developed a web-based security product whose primary application was intended for the financial industry. Since inception we’ve since began pursuing two other business lines, also based on the software, that can be considered conceptually different from the product we initially brought to market. We’re debating whether we should pursue these product lines under […]
Question: What preferences do venture capitalists have for different possible states of incorporation? (Jason) Most venture capitalists have 3 preferred states: Delaware, whatever state the company is in and whatever state(s) the VCs are located in. I’ll spare you the longwinded legal answer (I actually had a class in law school that was all about […]
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