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NEW VC Spotlight Features 2012 VC Data, Dilution, Crowdfunding, and Non-Compete Legislation 03/20/2013

Posted by Morse, Barnes-Brown Pendleton in Client News, Corporate, Industries, Legal Developments, New Resources, Venture Capital & Private Equity.
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Each quarter, MBBP compiles a comprehensive database of venture capital transactions that have closed within New England, New York and New Jersey. In our most recent VC Spotlight, MBBP presents the 2012 First Institutional Rounds – Deal Terms in the chart seen below.Venture Capital Data: 2012 First Institutional Rounds - Deal Terms

Further data analysis can be found in this quarter’s VC Spotlight Newsletter.

Other articles featured include:

  •  The Price of Growth – The Lifecycle of a Company from a Founder’s Dilution Perspective
  • What Every Startup Should Know About Crowdfunding
  • New Proposed Massachusetts Non-Compete Legislation Focuses on Duration of Restrictions

The full newsletter is available here.

NEW VC Spotlight Features Q1 VC Data, NVCA Forms, Crowdfunding, etc. 07/23/2012

Posted by Morse, Barnes-Brown Pendleton in Legal Developments.
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MBBP publishes VC Data – such as the Q1 2012 First Institutional Rounds Average Investment chart seen below – in a recent VC Spotlight. MBBP compiles a comprehensive database of venture capital transactions that have closed within New England, New York and New Jersey.

 Q2 2012 VC Data

Further data analysis can be found in this quarter’s VC Spotlight Newsletter.

Other articles featured include:

The full newsletter is available here.

MBBP Compiles 2011 VC Transactions Data 04/04/2012

Posted by Morse, Barnes-Brown Pendleton in Client News.
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In a recent VC Spotlight, MBBP published data on venture capital transactions that have closed within New England, New York and New Jersey in 2011. The VC Spotlight features an analysis of first institutional venture capital investment activity including investment rounds by deal terms, by industry and by state.

The above chart indicates a decline over prior periods in the use of the participating preferred and redemption features.

To see the full analysis, please click here.

MBBP Q1 2012 VC Spotlight: Seed Convertible Note Discounts; Superior Court Ruling on Noncompetition Agreements 04/04/2012

Posted by Morse, Barnes-Brown Pendleton in MBBP news, New Resources.
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Seed Convertible Note Discounts: Reconciling “Stock” and “Liquidation Preference” Premiums

Corporate Attorney Jonathan GworekBy: Jonathan Gworek

Convertible notes have become the security of choice for early stage startups looking to raise seed capital. Convertible notes are perceived to be a simpler alternative to preferred stock. When a convertible note converts, it typically does so at a discount to the price paid in the next round. As a result, the promissory note will convert into a number of shares that reflects a premium level of stock ownership. But there is a second and lesser appreciated premium often associated with convertible notes. When notes convert into the next round of equity at a discount, not only does the noteholder get more equity per dollar invested as described above, but the noteholder may also get the benefit of an aggregate liquidation preference that is associated with that premium number of shares.

It is important to recognize this distinction between the “stock ownership premium” and the “liquidation preference premium” that results from the conversion of notes at a discount. There are approaches that can be used to eliminate the liquidation preference premium if that is not the intended result of the discount. For a full discussion of the differences between the stock ownership premium and the liquidation preference premium resulting from the conversion of notes, and the alternatives that are available for dealing with the liquidation preference premium, please click here.

Superior Court Rules Start-up Can Enforce Former Executive’s Noncompetition Agreement

By: Scott Bleier

Corporate Attorney Scott BleierOver the past four years, there has been ample legislative discussion and speculation amongst lawyers regarding the enforceability of noncompetition agreements under Massachusetts law. During this time, multiple bills have been filed with the Massachusetts House of Representatives which, if passed, would substantially limit – and, in some cases, abolish – the enforcement of most noncompetition agreements. Notwithstanding this ongoing dialogue and a perceptible shift towards disfavoring noncompetition agreements in Massachusetts, a recent Superior Court decision illustrates that properly drafted noncompetition agreements continue to be enforced judicially in the Commonwealth and further serves to remind established and start-up companies alike of the need to be mindful of the impacts of these contractual restrictions. For more on this development, please click here.

Visit MBBP to view our full VC Spotlight.

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