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Your Deal But My Terms – A Primer on Private Market Terms & Conditions

In this episode of Insights, ACE Portal’s Co-Founder and CFO, Carl Torrillo, discusses deal terms and conditions with Ross Barrett, Co-Founder and CEO of VC Experts.  The interview drills down into areas of interest for private market investors.

Specific topics covered include:

  • Anti-dilution provisions
  • Valuation considerations
  • Maintaining management incentives (the law of unintended consequences)
  • Dividend rates (accrued or not)
  • Covenants and Board Rights

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Figuring Out Your Equity Compensation at a Startup

In our travels, we’ve talked with many folks who work at startups and two common threads have emerged:

  • Startup employees don’t have sufficient avenues for liquidity, and 
  • Startup employees don’t have a clear understanding of how they are paid.

The former is a primary reason why EquityZen does what it does and the latter is the topic of this post.  We will break down the basics of incentive compensation at startups, survey tax considerations, and identify key points to raise with employers during compensation negotiations.
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Crowdfunding as a Risk Reduction Tool for Socially Responsible Investing

Entrepreneurs and investors have a growing interest in building and funding companies that integrate people, planet, and profit. But despite market demand for goods and services with environmental and social value, startup ventures based on these values are typically perceived as higher-risk or lower-return, and often struggle to maintain their unique identity as they trade equity for capital.

Crowdfunding can be a powerful tool that enables a socially responsible company (SRC) to overcome these challenges, resulting in more and better opportunities for socially responsible investing (SRI). But how does the power of “the crowd” empower new startups and reduce risk for investors?
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Key Regulatory Considerations for Alternative Funds in the EU

In this interview, Peter Williams the ACE Founder and CEO, interviews Michael Nobes, the CEO of Sixbridges Capital, about the complexities of the private fund space with an emphasis on doing business in the European Union. In particular, their conversation focuses on the impact of the Alternative Investment Fund Manager Directive (AIFMD) on compliance and cost of doing business.

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Where are All the General Solicitation Deals?

This post by Robert Fisher, the CEO of Fisher Tanner Associates, originally appeared in VC Experts Daily Buzz. In it, Fisher talks about pitfalls to the implementation of 506(c) General Solicitation provisions under the JOBS Act and why we are not seeing an explosion in deals marketed under the 506(c) provision. Basically, the article looks to answer the question, ‘Why aren’t we seeing deals being marketed more broadly now that it is legal to do so?”

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With speed approaching perilously close to that of light itself, recent deregulation has freed huge and heretofore inaccessible pools of private monies to fund new investment and unshackle innovation…

Just kidding – that didn’t happen. Would have been nice, eh? One could argue it wasn’t for lack of good legislative intention. As part of the JOBS act – Congress did indeed instruct the SEC to remove the ancient prohibition against General Solicitation and Advertising under Regulation D. The concept: make it easier for start-ups to cast a wide net when seeking investors. You may recall good ol’ Reg D which provides exemptions from SEC registration. The Reg D exemption relied on by most private investors – now called 506(b) continues the solicitation ban. The new exemption since last September – 506(c) – eliminates the ban but not without a new gotcha of its own.

What are the hidden ‘gotchas?’
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Transaction Readiness – Will you be Ready if a Suitor Comes Knocking?

In this interview, ACE Co-Founder & CFO, Carl Torrillo, discusses the concept of ‘transaction readiness’ with Jeremy Swan of CohnReznick. Jeremy covers a range of topics to help you prepare your business for a potential investor or suitor and discusses why this can be important strategically–even if you are not immediately contemplating a transaction. To quote Jeremy: “if you’re not ready when a suitor comes knocking, then it’s too late.”

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7 Fundraising Tips for Startups Pursuing VC Money

In this article you will find  a collection of fundraising advice geared towards pitching a traditional Venture Capital Firm.  Most of Joe’s advice, however, would apply just as well when using an Online Portal or pursuing other fundraising avenues. To summarize the efforts in relation to online portals: find the right Portal with the right investor base for your offering, present the material in an easily digestible and engaging format, follow through, and don’t stop your other complimentary efforts. If you think your company is right for VC Funding then here are Joe Bartlett’s seven key pieces of advice:

Rule #1: Pitch the Appropriate Audience

VC funds collect huge sums of cash, and managers must put it to use within four or five years, or risk losing it. Despite their vast resources, venture funds’ staffing is generally lean and mean — managers cannot afford to look at investments that involve, from their perspective, trivial amounts of funding. If you’re looking for very early-stage funding (the so-called “angel round”) or financing under, say, $5 million, don’t go to a professionally managed venture-capital fund. Find angel investors instead. They specialize in taking a company from inception to the next round of financing. Read More

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