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Drag-Along Rights in Startup Financing: Streamlining Exits While Balancing Stakeholder Interests
When negotiating startup financing, founders often focus on valuation, equity splits, and immediate ownership. But long-term provisions in term sheets can be just as important, especially when it comes to company exits. One of the most impactful is the drag-along right.
Anti-Dilution Rights in Startup Funding: The Price Protection Mechanisms That Safeguard Investor Value
When structuring venture capital deals, founders often focus on valuation, investment size, and ownership splits. But within preferred stock agreements are provisions that can significantly reshape economics if future fundraising happens at lower valuations. Chief among these are anti-dilution protections.
Liquidation Preferences in Startup Funding: Critical Terms That Shape Exit Outcomes
When negotiating startup financing rounds, founders often focus on valuation, investment size, and ownership percentages. However, hidden within term sheets are provisions that can dramatically impact how exit proceeds are distributed. One of the most important of these provisions is the liquidation preference.
SAFEs: Streamlining Early-Stage Startup Investments
In today’s fast-moving startup ecosystem, the Simple Agreement for Future Equity (SAFE) has reshaped how early-stage companies raise capital. Introduced by Y Combinator in 2013, SAFEs were created to simplify fundraising while balancing the needs of both founders and investors.
FAQs
Open allHow are you different from big law firms?
We are a tight team and like it that way. We have work/life balance ourselves. Names, faces, families, souls. No corporate bureaucracy. Big law firms employ humans too, but they are kind of like a top-down scheme that focuses on demanding work hours from lower-level associates who are incentivized to increase billable hours and not incentivized to increase their or their clients’ success and happiness.
We developed our model so that we can select powerful businesses to align with as our clients and provide true partnership and counsel - our clients’ success and happiness are directly aligned with our success and happiness.
What law firm will provide my legal services?
VirtualCounsel, PC (i.e., @VirtualCounsel) is a virtual law firm, headquartered in San Diego, CA.
@VirtualCounsel™️ is not a law firm. Any legal services will be performed by the law firm VirtualCounsel, PC, a California professional law corporation.
What is @VirtualCounsel?
VirtualCounsel, PC (i.e., @VirtualCounsel) is a virtual law firm headquartered in San Diego, CA. We are progressive corporate attorneys. We are a startup ourselves, and we built our law firm to serve startups in the way that we believe a professional service provider should serve their clients.
Do I get a dedicated point of contact?
Yes. At the beginning of a relationship you will have a kick-off call with one of our talented attorneys who will operate as your primary point of contact. Even better, our technology gives our whole firm - all attorneys, legal staff, etc. - visibility into every client’s confidential portal. So you will have a team of bright minds collaborating on the important work for your business - and will always have your primary attorney point of contact running point.
What if something falls outside of the Scope of Work?
We provide representation and advice on the specific legal matters you have hired us for, which means that our work together is limited to the Representation. If a project falls outside of the Scope of Work, we will always discuss the parameters of the work and fees with you before moving forward with it.
Additionally, if your business changes substantially, we will discuss the change in Scope of Work and will agree to a revised fee arrangement. Representation on any future matters will be subject to the terms of this Agreement and any other fee arrangements we may mutually agree upon. The question of whether a matter or issue falls within the scope of this Representation will be handled with common sense, mutual agreement, mutual respect, and fairness to both parties.
What is an A la Carte project?
A la carte projects refer to individual, one-off projects with a specific scope of work. These projects can be carried out for new clients or for current subscription clients when the work falls outside the scope of their subscription. On a case by case basis, we may bill these projects on an hourly basis or as a flat fee.