There are important issues that need to be carefully considered and discussed with respect to SAFE (Simple Agreement for Future Equity) agreements. (Yes, I know that’s redundant.) Let’s take a look: Valuation Cap This is arguably one of the most critical aspects of a SAFE. The valuation cap essentially sets the maximum valuation at which … Read more
Transactional lawyers can leverage AI in several ways to enhance their practice and deliver more efficient and effective services to clients. AI can be a powerful tool for transactional lawyers, but it’s important that AI be used as an aid and not a replacement for human expertise and judgment. AI systems need to be carefully … Read more
Earnouts serve a valuable role in bridging valuation gaps that frequently arise when buyers and sellers negotiate the pricing for an acquisition. Buyers typically apply conservative projections and valuations to limit overpaying, while sellers push for valuations based on their more optimistic future performance expectations. Earnouts allow a portion of the purchase price to be … Read more
The Corporate Transparency Act (CTA) was signed into law as part of the National Defense Authorization Act. The goal of this legislation is to make information about who really owns or controls certain corporations and limited liability companies more readily available to law enforcement. Why? To crack down on the use of shell companies in … Read more
A letter of intent or LOI is a document that’s often used to outline the preliminary understanding between parties before entering into a formal contract or agreement. Below, I outline the common mistakes in LOIs and how to avoid them. Parties should address these common mistakes and taking proactive steps to draft clear, comprehensive, and … Read more
A Federal District Court in Alabama just issued a decision finding the Corporate Transparency Act (CTA) unconstitutional in the case of National Small Business United v. Yellen. The court ruled that in enacting the CTA, Congress exceeded its Constitutional powers, including its authority to regulate interstate commerce. Specifically, the court agreed with plaintiffs that while … Read more
AI can automate various aspects of the due diligence process, such as document review, redlining, and contract summarization. By automating routine tasks, AI frees up M&A professionals to focus on higher-value activities, such as strategic analysis and negotiation. I give more particulars below after the video. By automating routine tasks and leveraging AI-driven analytics, M&A … Read more
Founders may form many types of entities, including partnerships and regular corporations (C Corps), but two of the most popular types are limited liability companies (LLCs) and Subchapter S corporations (S Corps). Generally speaking, LLCs and S Corps are entities that allow profits and losses to be passed through to the owners of the entity, … Read more
Word, Kanye, Kyrie / National Brotherhood Week / Words, natch, Tom Lehrer / In recognition of International Day for Tolerance. More on Tom Lehrer here.
LLC, a choice / Operating agreement / A necessity / More on LLC operating agreements here.
Entity structure / Limits liability / Care must be taken / More on piercing the corporate veil here.