516-227-0700

Emerging Companies & Venture Capital

Focused representation to entrepreneurs, emerging growth companies, and the investors who fund them.

Our dedicated team of attorneys provides focused representation to entrepreneurs, public and private emerging growth companies, and the venture capital funds, angel investors, and investment banks that finance them.

We represent technology and other emerging high-growth businesses in various industries, including biotechnology, digital media, environmental, information technology, medical devices, software, clean energy and blockchain technology, and telecommunications, regularly advising them on:

  • Entity formation and development
  • Founder and shareholder agreements
  • Seed- and late-stage funding
  • Executive compensation and benefits, stock option and other equity-based compensation arrangements
  • Licensing and other technology transfer transactions
  • Mergers and acquisitions and other strategic transactions

We also advise venture capital firms and other fund sponsors on fund formation and administration and represent venture capital funds and angel investors in the negotiation of various stages of equity, debt, and convertible funding transactions, and the planning and implementation of exit strategies.

Valuable Investor & Industry Relationships

Our professional relationships are a valuable resource to our technology and emerging company clients. We have strong relationships with:

  • Venture capital firms, private equity firms, angel investors, investment banks, and other capital sources, several of whom have invested in our clients
  • Various Northeast regional universities, major laboratories, and other research institutions
  • Numerous technology organizations and institutions across the New York region and beyond

Farrell Fritz has assumed a leadership role in significant initiatives to build a robust innovation ecosystem in the region. Our attorneys have also taken active roles in advocating for private and public capital markets reform, including through public speaking and publication in various media, with the goal of making it easier for emerging companies to raise capital in the private markets and ultimately go public.

A Trusted Resource

Our emerging companies & venture capital practice group publishes the New York Venture Hub blog, a widely read resource devoted to issues important to high-growth entrepreneurs, investors, and their advisers.

Professionals

Robert C. Creighton

Partner
Uniondale

Josh Kalish

Partner
New York City

Alon Y. Kapen

Partner
Uniondale

Stephen F. Melore

Partner
Uniondale

Charles M. Strain

Retired Partner
Uniondale

Jennifer Tomeny Stacchini

Counsel
Uniondale

Joanna Hazelton

Associate
Uniondale

Kristen Van Beek

Associate
New York City

Recent Blog Posts

Making Finders Keepers:  Unregistered Broker-Dealers and the Need for Reform

Identifying potential investors is one of the most difficult challenges facing early-stage companies.  The range of amounts sought at this…

March 18, 2024

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March 18, 2024

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Out of Control!  What the Elon Musk Compensation Case Reminds Us about Transactions with Controlling Stockholders

Process still matters.  That’s the main takeaway from the Delaware Court of Chancery’s 200-page opinion striking down Tesla’s 2018 incentive…

February 09, 2024

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February 09, 2024

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Corporate Transparency Act Risks for Startups and Venture-Backed Companies

Starting January 1, 2024, virtually all private companies will be required to report information about their beneficial owners to the…

January 08, 2024

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January 08, 2024

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SEC’s First Two NFT Enforcement Actions Cast Shadow of Ambiguity

The Securities and Exchange Commission recently brought its first two enforcement actions against issuers of non-fungible tokens (NFTs), resulting in…

October 02, 2023

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October 02, 2023

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Parting the Crypto Sea:  Ripple’s XRP Ruled to be a Security When Sold to Private Investors, Not a Security When Sold on an Exchange

Judge Analisa Torres’ greatly anticipated Order in the SEC’s lawsuit against Ripple is a split decision.  The Order basically finds…

July 16, 2023

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July 16, 2023

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Revenue Participation Rights as a Crowdfunding Instrument Alternative

The anti-child trafficking thriller “Sound of Freedom” just opened in theatres on July 4th.  Based on a true story, it…

July 05, 2023

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July 05, 2023

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Too Big to Waive?  Enforceability of Drag-Along Covenants Not-to-Sue

In the world of venture capital, there are certain investor rights that ensure the smooth execution of exit transactions.  The…

June 12, 2023

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June 12, 2023

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Proposed Reform of Venture Capital Fund Advisor Exemption Will Boost Startup Investment and Founder Liquidity

A major theme of this Blog has always been ongoing legislative, regulatory and market initiatives to reform capital markets by…

May 30, 2023

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May 30, 2023

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Bumpy Ride Ahead for Startups After Silicon Valley Bank Crash

The collapse of Silicon Valley Bank will have enormous repercussions for startups and VCs in ways seen and unseen.  As…

April 03, 2023

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April 03, 2023

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Middle Market M&A Brokers Get Relief

A new federal law goes into effect March 29, 2023 that conditionally exempts from broker-dealer registration persons who solely intermediate…

March 12, 2023

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March 12, 2023

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RIP Non-Competes?

Will employment non-competes soon be banned nationally?  Perhaps, if the Federal Trade Commission gets its way.  Last month, the FTC…

February 06, 2023

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February 06, 2023

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FTX, Sam Bankman-Fried and the Risk of Unchecked Founder Control

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of…

December 20, 2022

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December 20, 2022

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“Beyond Redemption”: SPAC Shareholder Redemptions and New Excise Tax Could Lead to Year-End Rush to Close or Liquidate

Just last week, special purpose acquisition company The Music Acquisition Corporation (“TMAC”) called a special meeting of its stockholders.  It…

November 09, 2022

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November 09, 2022

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“So What?”:  Twitter Resists Merger Agreement Termination by Invoking Musk’s Unclean Hands

Elon Musk has lobbed in two additional termination letters since his original July 8 letter seeking to terminate his agreement…

September 18, 2022

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September 18, 2022

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It’s (Mostly) Good to be the Serial Entrepreneur

Two startups with competing, equally compelling technologies at the same stage of development are pitching venture capital investors for Series…

September 07, 2022

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September 07, 2022

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Push to Facilitate Liquidity in Private Companies

What do founders, employees and investors in privately held companies all have in common?  Limited opportunity to sell their shares. …

July 31, 2022

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July 31, 2022

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May Elon Musk Terminate his Merger Agreement with Twitter over Spambots?

Another week, another chapter in the Elon Musk-Twitter saga.  Last month, Musk posted tweets questioning longtime Twitter claims that automated…

June 08, 2022

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June 08, 2022

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Inside the Merger Agreement between Elon Musk and Twitter

In what seems like one of the speediest transaction processes ever for a deal of its size, Twitter agreed on April…

May 02, 2022

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May 02, 2022

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Passive Aggressive: Unpacking Elon Musk’s Beneficial Ownership Filings Regarding Twitter, Inc.

Elon Musk’s contentious relationship with the Securities and Exchange Commission is likely to become even more complicated as a result…

April 10, 2022

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April 10, 2022

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Protecting the Protected: SEC Proposes New Safeguards for Private Fund Investors

The Securities and Exchange Commission just proposed new rules to protect investors in private investment funds.  The proposed rules would require…

February 22, 2022

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February 22, 2022

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Venture Capital Set Records in 2021, Faces Headwinds in ’22

2021 was a spectacular year for the American venture capital ecosystem, with VC investments, fundraising and exits all setting new…

January 24, 2022

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January 24, 2022

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Course Correction:  Why “Ordinary Course” Covenants in Acquisition Agreements Should be Drafted Carefully

Should a buyer be allowed to walk away from an acquisition if an extraordinary event occurs between signing and closing…

January 07, 2022

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January 07, 2022

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Comments from the SEC(nut) Gallery: SEC Comment Letters Focus on SPAC Conflicts of Interest

Ever since the SPAC market exploded in late 2020 and early 2021, the SEC has sounded alarm bells through investor alerts,…

November 08, 2021

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November 08, 2021

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Crypto Reform Goes to Congress: Proposed Three-Year Safe Harbor for Distribution of Pre-“Network Maturity” Digital Tokens

Background: Crypto Catch 22 Followers of the SEC’s efforts to regulate digital tokens will recall former SEC Corp Fin Director…

October 18, 2021

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October 18, 2021

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Series LLCs, Serious Risks

Lately I’ve been approached by clients and potential clients about series LLCs, so I thought it would be worth blogging…

September 12, 2021

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September 12, 2021

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“Do Your Homework!”: SEC Order Sends Strong Message to SPAC Participants on Due Diligence

The Securities and Exchange Commission announced on July 13, 2021 that it settled fraud charges against a special purpose acquisition…

July 26, 2021

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July 26, 2021

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First Ever SEC Registered Digital Token IPO May Bring Clarity to Blockchain Asset Industry

On May 3, 2021, blockchain-based trading platform operator INX Ltd. announced it had completed its initial public offering of digital…

June 14, 2021

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June 14, 2021

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Securities Safety Check for New TV Series “Unicorn Hunters”

A new reality streaming television series called Unicorn Hunters debuts May 10 in which startups will pitch to a panel…

May 10, 2021

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May 10, 2021

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Issuers May “Test-the-Waters” Before Choosing a Securities Exemption

Perhaps the most vexing threshold issue faced by any company considering a capital raise is which securities exemption to pursue. …

April 18, 2021

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April 18, 2021

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SEC vs. Ripple Could Make Waves in Cryptocurrency Market

On December 2, the Securities and Exchange Commission filed a lawsuit against Ripple Labs, Inc. and two of its executives…

March 08, 2021

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March 08, 2021

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Relief for Pre-Verified Accredited Investors May Encourage Rule 506(c) Offerings

For the second time in nine days, I recently drove ten hours round-trip to drop my son off at school…

February 15, 2021

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February 15, 2021

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Why Private Capital and Crowdfunding Markets Should be Nervous about President Biden’s Regulatory Freeze

A freeze on government regulation is generally perceived by most people as being a positive development for private enterprise.  Not…

January 25, 2021

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January 25, 2021

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Strict Traffic Rules for New Crowdfunding Vehicles – Part Three of Exempt Offering Amendments Deeper Dive

You just raised $1 million in your crowdfunding offering under Title III/Regulation CF.  That’s the good news.  The bad news? …

January 10, 2021

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January 10, 2021

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“Demo Days are Here Again”: Part Two of Exempt Offering Amendments Deeper Dive

At the 1932 Democratic National Convention, the live band at one point burst into “Happy Days are Here Again”, FDR’s…

December 23, 2020

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December 23, 2020

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Exempt Offering Amendments Deeper Dive, Part One: Higher Offering Caps

Last month, the Securities and Exchange Commission passed sweeping reforms of the rules governing exempt offerings (the “2020 Reforms”) to…

December 13, 2020

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December 13, 2020

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Significant Exempt Offering Rule Reforms Approved by SEC to Facilitate Capital Formation

On November 2, 2020, the SEC adopted significant rule amendments to simplify, harmonize and improve the exempt offering framework to…

November 09, 2020

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November 09, 2020

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“Kik” in the Butt: Court Decision Against Initial Coin Offering Could be Opportunity for Others

On October 21, 2020, the United States District Court for the Southern District of New York entered a final judgment…

November 01, 2020

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November 01, 2020

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SEC Proposes Much Needed Finder Exemption, and Paul Anka Must Be Singing

Finders play a vital role in introducing startups to potential investors.  Yet the general requirement that persons soliciting investors must…

October 11, 2020

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October 11, 2020

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Private Market Investing Not Just for the Wealthy Anymore?

The Securities Exchange Commission expanded the definition of “accredited investor” by adding new categories of investors that have sufficient investment…

September 07, 2020

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September 07, 2020

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Management and Common Stockholder Resistance to Acquisitions, and Using Carve-Outs to Overcome It

This past June, autonomous vehicle technology startup Zoox agreed to be acquired by Amazon for a whopping $1.3 billion.  Time…

August 26, 2020

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August 26, 2020

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“Whoever has the Gold, (Once Again) Makes the Rules”: VC Deal Terms Likely to be More Investor Favorable

It’s no shocker that the Coronavirus pandemic has slowed down venture capital investment dramatically, with 2020 now on pace to…

July 13, 2020

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July 13, 2020

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The Upshot of Down Rounds

The impact of the Coronavirus and COVID-19 on venture capital investment will likely be similar to what we saw in…

June 01, 2020

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June 01, 2020

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COVID-19 Capital Needs Addressed by Temporary Relaxation of Title III Crowdfunding Rules

Title III crowdfunding may be an attractive capital raising alternative during the current Coronavirus pandemic because it allows companies to use…

May 18, 2020

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May 18, 2020

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Restoring Incentives of Underwater Stock Options

COVID-19 induced declines in private and public company valuations have left many employee stock options “underwater” or “out-of-the-money”, i.e., exercise prices…

May 10, 2020

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May 10, 2020

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Shareholder Meetings in the Age of COVID-19

Among the many challenges companies are facing during the COVID-19 pandemic is how to conduct their shareholder meetings. Current social…

April 13, 2020

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April 13, 2020

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No Satisfaction: Absence of Affiliation Rule Waiver Leaves Most Venture-Backed Companies Ineligible for Paycheck Protection Plan Loans

April 06, 2020

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COVID-19 SEC Filing Relief and Disclosure Guidance

Public companies stressing over how to meet filing deadlines during the COVID-19 crisis and what to say about the pandemic’s…

March 27, 2020

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March 27, 2020

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Proposed Three-Year Digital Token Safe Harbor May Bridge Gap to Decentralization or Functionality

It’s not often that an SEC Commissioner quotes Bruce Springsteen – not once, but twice – in a speech on…

March 01, 2020

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March 01, 2020

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Proposed Expansion of “Accredited Investor” Definition Would Benefit Issuers and Investors

The Securities and Exchange Commission is proposing to expand the definition of “accredited investor” to include additional entities that could…

January 21, 2020

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January 21, 2020

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What to Make of the SEC’s Leniency in the Block.one ICO Settlement?

On September 30, 2019, the Securities and Exchange Commission announced that blockchain developer Block.one had agreed to pay a $24…

December 02, 2019

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December 02, 2019

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Telegram TRO Sends Strong Message to Digital Token Issuers

On October 11, 2019, the Securities and Exchange Commission (the “Commission”) announced it filed a complaint and obtained a temporary restraining…

October 28, 2019

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October 28, 2019

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WeWork, SoftBank and Anti-Dilution Protection

The corporate spectacle better known as The We Company IPO officially and mercifully came to an end September 30 when The We…

October 06, 2019

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October 06, 2019

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First Qualified Regulation A Token Offering: Will “$2 Million Contribution to Crypto Industry” be Precedent Setting?

On July 10, 2019, the Securities and Exchange Commission declared Blockstack PBC’s offering statement “qualified”, thus allowing Blockstack to commence…

August 05, 2019

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August 05, 2019

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SEC Exempt Offering Concept Release Seeks Comment on Ideas to Ease Restrictions on Sales to Non-Accredited Investors

Non-accredited investors are estimated to constitute approximately 92% of the U.S. population. Yet restrictive rules governing exempt offerings have significantly…

July 08, 2019

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July 08, 2019

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Founder Fraud Case Study: Roundtrip Contracts and Other Revenue Recognition Schemes

The Securities and Exchange Commission filed a complaint last week against the founder of venture-backed mobile payments startup Jumio, Inc., charging…

April 08, 2019

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April 08, 2019

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Power Lyfting: Lyft IPO is Latest in Trend Giving Founders Disproportionate Voting Power

Lyft, Inc. last week completed its highly anticipated initial public offering, raising over $2.3 billion at a valuation of approximately…

April 01, 2019

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April 01, 2019

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Behind 2018’s Boom Year for Venture Capital

2018 was a historically good year for venture capital in the United States in terms of dollars invested by VC funds…

February 18, 2019

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February 18, 2019

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In my Backyard: Real Estate Developers can Use Equity Crowdfunding both to Fund Projects and Convert Opposition

Real estate developers should seriously consider equity crowdfunding to fund development projects for two major reasons, one of which has…

January 28, 2019

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January 28, 2019

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SEC Reporting Companies Now Regulation A+ Eligible

On December 19, 2018, the Securities and Exchange Commission issued final rules to permit reporting companies under the Securities Exchange Act…

December 26, 2018

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December 26, 2018

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First Federal Ruling Against SEC on Whether Digital Token is a Security

On November 27, 2018, the United States District Court for the Southern District of California denied the Securities and Exchange…

December 03, 2018

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December 03, 2018

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Imitation Not Always Flattery: SEC Halts ICO that Falsely Claimed Approval by SEC and Self-Created “Blockchain Exchange Commission”

If you were looking for a safe blockchain investment and had the chance to invest in the “first licensed and…

October 14, 2018

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October 14, 2018

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Gig Stock: Extension of Rule 701 Exemption for Compensatory Equity Proposed for Gig Economy Participants

Private companies in the gig economy like Uber and Airbnb would love to issue compensatory equity to their platform participants, just…

September 25, 2018

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September 25, 2018

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“No Good Deed”: Free Tokens Issued in Airdrops, Bounty Programs Likely Violate Securities Laws

If you’re thinking of airdropping free tokens or implementing a cryptocurrency bounty program, be careful. The Securities and Exchange Commission…

August 19, 2018

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August 19, 2018

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“Third Time’s a Charm”: House Adopts JOBS Act 3.0 to Fix Earlier Capital Raising Reform Efforts

It’s not often that the House of Representatives votes nearly unanimously on anything noteworthy these days, but that’s exactly what…

July 24, 2018

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July 24, 2018

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SEC Expands Eligibility for Scaled Disclosure; Signals Possible Auditor Attestation Relief

On June 28, 2018, the Securities and Exchange Commission issued a release amending the definition of “smaller reporting company” (“SRC”) to…

July 16, 2018

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July 16, 2018

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Can a Digital Token Evolve? Head of Corp Fin Says “Yes”, if Network Becomes Decentralized

“Can a digital asset that was originally offered in a securities offering ever be later sold in a manner that…

June 26, 2018

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June 26, 2018

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SEC Reporting Companies Soon to be Regulation A+ Eligible

Buried in new legislation mainly intended to ease Dodd-Frank restrictions on small banks is an expansion of Regulation A eligibility to…

June 11, 2018

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June 11, 2018

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First S-1 Filing for an ICO: Going Legit or Just a Crypto Head Fake?

Initial coin offerings so far have gone through two major phases in their brief lifespan. The initial phase flew under…

May 07, 2018

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May 07, 2018

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Hand it Over: SAFT-Based ICOs Challenged by SEC Subpoenas

The Wall Street Journal ominously reported on February 28 that the Securities and Exchange Commission recently issued dozens of subpoenas…

March 22, 2018

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March 22, 2018

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Dropbox IPO Multi-Class Structure: Bad Corporate Governance or Good Long Term Focus?

Dual or multi-class capitalization structures generally allow companies to sell large amounts of shares to the public while maintaining control…

February 26, 2018

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February 26, 2018

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Regulation Crowdfunding Surpasses $100 Million but Still Needs Reform

A recent report on the state of Regulation Crowdfunding published by a major crowdfunding advisory firm is cause for both celebration…

February 20, 2018

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February 20, 2018

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Massachusetts’ First ICO Enforcement Action Offers Important Lessons for Offshore ICOs

Last month, Secretary of the Commonwealth of Massachusetts William Galvin made good on his promise to conduct an exam sweep of ICOs…

February 05, 2018

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February 05, 2018

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Better Part of Valor: Delaware Supreme Court Rules No Ratification Defense for Director Grants under Discretionary Plans

What happens when corporate directors approve their own awards under an equity incentive plan? Under Delaware law, so long as…

January 10, 2018

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January 10, 2018

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Company Abandons ICO, Agrees to Cease-and-Desist; SEC Chairman Issues ICO Warning

December 11, 2017 was a day of reckoning for entrepreneurs conducting or contemplating initial coin offerings, and for securities professionals who advise…

December 18, 2017

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December 18, 2017

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Is a Utility Token ICO a Sale of Securities?

Bloomberg reported on October 16 that over $3 billion dollars have been raised in over 200 initial coin offerings so far this year.…

November 06, 2017

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November 06, 2017

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What Can’t be Cured, Must be Endured: Delaware Limits Defective Corporate Act Ratification

A recent Delaware Chancery Court decision provides important guidance on what types of defective corporate acts may be ratified under…

October 09, 2017

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October 09, 2017

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Cornell Tech Dedicates New Roosevelt Island Campus

Cornell Tech celebrated a historic milestone today with the dedication of its new campus on Roosevelt Island in New York…

September 13, 2017

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September 13, 2017

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Unchained: Delaware Authorizes Blockchain Technology for Corporate Records

On August 1, 2017, Delaware became the first state to allow corporations to record issuances, transfers and ownership of stock using…

August 24, 2017

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August 24, 2017

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SEC Provides Initial Coin Offering Guidance

On July 25, 2017, the SEC’s Division of Enforcement issued a Report of Investigation (the “Report”) that concluded that the…

August 09, 2017

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August 09, 2017

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Do Private Company M&A Intermediaries Need to Register with the SEC as Broker-Dealers?

Since 2014, many private company mergers and acquisitions intermediaries have chosen not to register as broker-dealers. That’s because a 2014…

July 17, 2017

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July 17, 2017

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Good Choice: Important Capital Formation Reforms in Financial CHOICE Act of 2017 Passed by House

On June 8, 2017, the House of Representatives passed the Financial CHOICE Act of 2017 on a vote of 233-186.…

June 25, 2017

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June 25, 2017

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Irredeemable: Delaware Case Will Make Redemption Rights Tougher to Enforce

Venture capital funds routinely negotiate for a right of redemption – the right to require the company to buy out…

May 30, 2017

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May 30, 2017

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Sellout: Why Control is Key in the Sale of VC-Backed Companies

Every founder of a growth startup dreams of a big, successful exit — a sale of the company for millions…

April 18, 2017

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April 18, 2017

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The JOBS Act at Five: Congressional Hearing Highlights Need for Further Reform

On March 22, the Subcommittee on Capital Markets, Securities, and Investment of the Financial Services Committee conducted a hearing entitled…

March 25, 2017

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March 25, 2017

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The Snap IPO: Speculation Without (Board) Representation

The just completed IPO of Snap Inc. has received enormous buzz and plenty of press coverage, mostly about its eye-popping…

March 06, 2017

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March 06, 2017

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Potential Relief for Employee Option Exercises

Employees generally must recognize income upon the receipt of employer stock to the extent that the fair market value of…

February 24, 2017

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February 24, 2017

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Valuation Disconnect Leads to 2016 IPO Drought

2016 turned out to be a terrible year for IPOs, both in terms of number of deals and aggregate proceeds.…

January 02, 2017

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January 02, 2017

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How Corporate Venture Capital Differs

Earlier this year, Union Square Ventures Managing Partner Fred Wilson famously referred to corporate VCs as “The Devil”, when he…

December 12, 2016

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December 12, 2016

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SEC Adopts Rules to Facilitate Intrastate and Regional Offerings

On October 26, 2016, the Securities and Exchange Commission adopted final rules intended to make intrastate and regional offerings more…

November 14, 2016

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November 14, 2016

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Seed Round Model Structures, Part II: Convertible Notes, KISSes and SAFEs

In Part I of this two part series on model structures for seed rounds, I explained how the dramatic decline in…

September 18, 2016

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September 18, 2016

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Seed Round Model Structures, Part I: Equity

The cost of launching an Internet-based startup has fallen dramatically over the last 15 years. This democratization of internet-based entrepreneurship…

August 22, 2016

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August 22, 2016

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Why is the SEC Investigating Tesla Motors?

On July 11, 2016, the Wall Street Journal reported that the Securities and Exchange Commission is investigating whether Tesla Motors…

July 30, 2016

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July 30, 2016

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House Passes Watered Down “Fix Crowdfunding Act”

On July 5, the House of Representatives passed a watered down version of the Fix Crowdfunding Act (the “FCA”) that…

July 11, 2016

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July 11, 2016

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Title III Crowdfunding Goes Live Today with Much Potential, but Different Reality

Ever since the Federal securities laws were enacted in 1933, all offers and sales of securities in the United States…

May 16, 2016

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May 16, 2016

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Fix Crowdfunding Act Would Cure Title III Crowdfunding Ills

Beginning on May 16, issuers for the first time will be able to offer and sell securities online to anyone, not just…

April 27, 2016

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April 27, 2016

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2016 Trends in Convertible Note Deal Terms

Seed stage investment deals, i.e., those in a range of approximately $100,000 on the low end and around $1.3 million…

April 03, 2016

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April 03, 2016

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Protecting Management from a Liquidation Preference Overhang

“The Founder of a $50 Million Startup Just Sold His Company — And He Didn’t Make a Dime”.  Such was…

March 14, 2016

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March 14, 2016

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Working the Crowd: A Primer for Funding Portals

One of the key investor protections of Regulation Crowdfunding under JOBS Act Title III is the requirement that offerings must…

February 10, 2016

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February 10, 2016

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New Investor Exit Strategy Buried in Highway Bill

Buried in the recently enacted Highway Bill, officially the Fixing America’s Surface Transportation Act or FAST Act, is a new…

January 19, 2016

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January 19, 2016

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Regulation Crowdfunding Effective Date is May 16, 2016

It’s official: the new Regulation Crowdfunding rules will become effective on May 16, 2016.  The SEC’s final rules release of…

November 18, 2015

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November 18, 2015

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Trick or Treat? SEC Adopts Controversial Crowdfunding Rules

At an open meeting on October 30, 2015, the Securities and Exchange Commission by a three-to-one vote adopted final rules…

October 31, 2015

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October 31, 2015

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Proposed Reforms Would Allow Unregistered Finders to Receive Success Fees

In its most recent meeting on September 23, 2015, the Securities and Exchange Commission’s Advisory Committee on Small and Emerging…

October 04, 2015

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October 04, 2015

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New SEC Guidance on What Constitutes “General Solicitation”

August 6, 2015 was a productive day for the Staff of the Securities and Exchange Commission’s Division of Corporation Finance…

September 09, 2015

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September 09, 2015

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“It’s Complicated”: Establishing “Preexisting Relationships” with Prospective Investors

In my last post, I blogged about online funding platforms. In that post, I described the typical model of indirect…

August 16, 2015

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August 16, 2015

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What’s the Deal with Online Funding Platforms?

Lately I’ve been approached by current and prospective clients about online funding platforms, either by folks interested in forming and…

July 24, 2015

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July 24, 2015

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Weak First Quarter for U.S. Venture-Backed IPOs

The market for venture backed IPOs in the U.S. in the first quarter of 2015 was the weakest in two…

June 28, 2015

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June 28, 2015

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New Regulation A+ Published in Federal Register — Will Become Effective June 19

The Regulation A amendments adopted by the Securities Exchange Commission on March 25 are being published tomorrow, April 20, in…

April 19, 2015

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April 19, 2015

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SEC Adopts Final Reg A+ Rules for Mini Public Offerings of up to $50 Million without Registration

The SEC yesterday issued its highly anticipated final rules amending Regulation A to allow issuers to raise up to $50 million in…

March 26, 2015

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March 26, 2015

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Electronic Blue Sky Filing System Launched by North American Securities Administrators Association

On December 15, 2014, the North American Securities Administrators Association launched the Electronic Filing Depository (“EFD”), an internet accessible database…

February 04, 2015

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February 04, 2015

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Technology Licensing Primer for Entrepreneurs – Part I: Non-Financial Terms

If you’re developing a product that requires certain technology that can’t be developed in-house (because of cost, time, human resources…

January 13, 2015

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January 13, 2015

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“Birthing a Unicorn is Hard” and other Takeaways from the 2014 Cornell Entrepreneurship Summit

It’s never easy to take an entire business day out of the office, but the annual Cornell Entrepreneurship Summit is…

November 17, 2014

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November 17, 2014

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Are VCs incentivized to lose money?

  Are VCs incentivized to lose money?  This is the provocative assertion made recently (and again) by Kaufman Foundation Senior…

September 24, 2014

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September 24, 2014

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Will Your Demo Day Presentation Violate the Securities Laws?

Your company is invited by a local meetup group to present at demo day with other startups, and you accept. …

August 11, 2014

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August 11, 2014

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Why Valuation is Overvalued, Part II: Liquidation Preferences

In Part I of this two-part series, I explained how a favorable pre-money valuation can be undercut by a large…

June 22, 2014

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June 22, 2014

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Why Valuation is Overvalued, Part I: The Option Pool

In any seed or early stage round negotiation between a company and a VC, one of the first and most…

May 19, 2014

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May 19, 2014

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Accelerator Mentoring and Money: On-Ramp for Startup Success

Building  a successful startup is challenging.  But the chances of success could be greatly enhanced through participation in a startup accelerator…

April 07, 2014

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April 07, 2014

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To Improve Small Company Liquidity, SEC Chairman Announces Tick-Size Pilot

SEC Chairman Mary Jo White gave her state of the Commission speech on Friday at the “SEC Speaks 2014” conference in…

February 25, 2014

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February 25, 2014

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SBA Initiatives and Twisted Business at SBIA Northeast Private Equity Conference

  My partner Steve Melore and I braved the latest New York snow storm to attend the Small Business Investor…

January 23, 2014

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January 23, 2014

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FINRA Priorities for 2014: IPOs, General Solicitation, Crowdfunding Portals and Microcap Fraud

On January 2, 2014, the Financial Industry Regulatory Authority (“FINRA”) published its annual priorities letter for 2014, chief among which…

January 09, 2014

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January 09, 2014

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Close to the Vest: Founders’ Stock and Vesting

Your startup was launched only a few months ago and your co-founder has just informed you that he’s leaving.  It…

December 31, 2013

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December 31, 2013

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SEC Provides Guidance on General Solicitation Private Offerings

The Securities and Exchange Commission released helpful guidance on some of the practical aspects of the new Rule 506(c) exemption for private…

December 10, 2013

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December 10, 2013

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Wisdom of the Crowd: SEC Issues Proposed Rules on Equity Crowdfunding

In a massive 585 page release, the Securities Exchange Commission on October 23 issued its long overdue proposed rules on equity crowdfunding…

November 12, 2013

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November 12, 2013

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Cornell Entrepreneurship Summit 2013: “Cool Jar” Deposits and Frozen Custard

The second annual Cornell Entrepreneurship Summit was held on October 11 in New York City and I was thrilled to…

October 22, 2013

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October 22, 2013

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Free at Last: General Solicitation and Advertising in Private Offerings Begins September 23

The new SEC rules lifting the ban on general solicitation and general advertising in certain private offerings go into effect today,…

September 23, 2013

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September 23, 2013

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PE Funds Could be Liable for Certain Portfolio Company Pension Obligations

Sun Capital Partners was dealt a harsh blow by the United States Court of Appeals for the First Circuit in…

August 16, 2013

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August 16, 2013

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General Solicitation Ban Lifted from Rule 506 Private Offerings, But Issuers Must Verify all Purchasers are Accredited

  The SEC on July 10 finally lifted its 80-year old ban on general solicitation and general advertising in Rule…

July 18, 2013

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July 18, 2013

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Convertible Valuation Caps: Loved by Angels, Tolerated by VCs and Hated by Entrepreneurs

I’ve noticed a recent trend of angel investors demanding valuation caps on their convertible bridge loans, and I’ve received questions…

June 19, 2013

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June 19, 2013

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SEC Report on Small Business Capital Reform

Last month, the SEC released its Final Report on the 2012 SEC Government-Business Forum on Small Business Capital Formation, the…

May 15, 2013

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May 15, 2013

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Tax Me Now: Founder Stock and the 83(b) Election

Of the countless details and decisions that the founder of a startup company is inevitably juggling as he launches his…

May 05, 2013

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May 05, 2013

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SEC “Likes” Social Media Disclosure, So Long as Investors are Alerted

On July 3, 2012, Netflix CEO Reed Hastings kicked off the holiday weekend with some fireworks of his own by…

April 24, 2013

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April 24, 2013

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New York Emerges as Tech Powerhouse

In what may seem like a blink of an iPad, New York has emerged over the last few years as…

April 09, 2013

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April 09, 2013

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Startups’ Guide to JOBS Act

In perhaps the only successful bipartisan effort in 2012 to remove barriers to economic growth, Congress passed and the President…

March 27, 2013

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March 27, 2013

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Risks In Using Unregistered Finders To Find Capital

Using finders, instead of investment bankers that are registered broker-dealers, involves significant risks that could threaten a company’s ability to successfully…

March 20, 2013

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March 20, 2013

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Getting Carried Away With Carried Interest?

            The debate over the taxation of “carried interest” has been percolating for years and the release of Mitt Romney’s…

March 12, 2013

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March 12, 2013

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Articles & Advisories

Do Malls Have Any Business Getting Into Retail?

Vertical integration — apparel retailers that make their own merchandise, farmers that sell their own produce, malls that own their…

February 16, 2021

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Out of Compliance: How Delisting Distracts From a Turnaround

A retailer’s poor sales can send shares spiraling down as investors lose confidence. If the stock price gets below a…

December 04, 2019

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Farrell Fritz: Joining in the effort to build Long Island’s innovation economy

Attorney Advertising – Long Island Business News A partner in Farrell Fritz’s corporate department, Alon Y. Kapen leads the firm’s…

June 08, 2015

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News

Alon Kapen Quoted in Yahoo Finance – “Novo Nordisk’s unique structure gives it an extra edge — and risk”

About half of Denmark’s largest companies share a corporate structure that’s common for the Nordic country — a system in…

December 12, 2023

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Alon P. Kapen Quoted in S&P Global: Private equity industry weighs consequences of SEC’s tighter grip

A sweeping set of rules for private fund advisers adopted by the SEC in August has underscored the agency’s recent…

October 02, 2023

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Farrell Fritz Expands NYC Office with Corporate & ECVC and Trusts & Estates Partners: News Coverage

On June 13, 2023, Farrell Fritz was pleased to announce the additions of Josh Kalish and David Goldstein to its…

June 15, 2023

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Bed Bath & Beyond Stock Hit a New Low. Bankruptcy Could Still Happen.

As Bed Bath & Beyond ‘s stock price plummets to historic lows, the retailer finds itself yet again on the brink of…

April 06, 2023

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Bed Bath Begins Three-Week Countdown to Possible Bankruptcy

Will Bed Bath & Beyond be able to avoid bankruptcy? Farrell Fritz, P.C. Partner, Alon Kapen, shares his perspective about the retailer with Bloomberg…

April 04, 2023

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Elon Musk Deserves Credit For Tweet Trial Win, Attys Say

Alon Kapen was interviewed by Law360 on continued coverage around Elon Musk and his “Tweet Trial Win” in California. In…

February 07, 2023

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The Year in M&A – 2022 Popular Reads on JD Supra

“Inside the Merger Agreement between Elon Musk and Twitter” by Farrell Fritz Partner Alon Kapen ranked as the second most widely read M&A-related article…

January 13, 2023

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The Year in Social Media – 2022 Popular Reads on JD Supra

“Inside the Merger Agreement between Elon Musk and Twitter” by Farrell Fritz Partner Alon Kapen ranked as the third most widely read Social Media-related…

January 10, 2023

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Musk’s Control Of Twitter Comes With Freedom, Drawbacks

Farrell Fritz partner Alon Kapen was quoted regarding the completion of Elon Musk’s deal to take Twitter private in Law360. “Whether it’s content moderation or…

October 31, 2022

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Elon Musk’s legal battle with Twitter may be over, but his war with the SEC continues

Alon Kapen gives his insights on Elon Musk’s continued battle with the SEC regarding the pending Twitter deal on MarketWatch. “There…

October 07, 2022

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Press Releases

Farrell Fritz Expands NYC Office with Corporate & ECVC and Trusts & Estates Partners

Farrell Fritz is pleased to announce the additions of Josh Kalish and David Goldstein to its growing New York City…

June 13, 2023

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Jennifer Tomeny Stacchini Joins Farrell Fritz as Corporate Counsel

Farrell Fritz is pleased to welcome Jennifer Tomeny Stacchini to its Uniondale office as corporate counsel. Jennifer is a Franklin…

August 08, 2022

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Pro Bono

Keeping L.I. Green while Saving Sustainable Long Island Some Green

Sustainable Long Island is a not-for-profit organization founded in 1996 by a diverse group of stakeholders in the Long Island…

August 15, 2011

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