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2003 Strategic & Legal Guide to Raising Venture Capital

Product Type: Market Research Report
Published by: Growthink Research
Published: April 2003
Product Code: R549-0011
Description
The 2003 Strategic & Legal Guide to Raising Venture Capital, developed by Growthink and VCExperts, is an essential tool for any company seeking to raise capital, or any tax, legal or other professional firm serving these firms. The 200+ page report presents all of the current issues and information that ventures seeking capital need to understand and apply to the capital-raising process.

Written specifically for companies (and professionals) raising capital in 2003, the report also includes eight full-length sample contracts such as a Sample Term Sheet, Sample Stock Purchase Agreement and Sample Corporate ByLaws.
Table of Contents
CHAPTER I: INTRODUCTION TO VENTURE CAPITAL

What Is Venture Capital?

Buzz Words



CHAPTER II: WHERE TO LOOK FOR SEED CAPITAL


Introduction to Raising Capital

Angels and Angel Groups

Venture Capital Firms

State Aid

Federal Grants And Loans

Placement Agents

Concept IPOs

Shell Corporations

Multiple-Round Strategy

Case Study In Finding Money: A Reality Check



CHAPTER III: HOW TO VALUE YOUR COMPANY?


Valuation And Pricing

Portfolio Management

Non-numerical Factors



CHAPTER IV: WHAT LEGAL FORM WORKS BEST FOR YOU?


Selecting The Form Of The Organization

S Corporations

Limited Liability Companies (LLCs)

Corporation Versus Limited Liability Company



CHAPTER V: WHAT WILL MY CORPORATION LOOK LIKE?


Corporate Bylaws, Charters, And Other Legalities

Corporate Charter

Payment For Stock

Statement Of Purpose

Miscellaneous Charter Provisions

Restrictions On Transfer

Preferred Stock Provisions

Preemptive Rights

Indemnification

Bylaws

Other Organizational Documents

State Of Corporate Domicile: Delaware Or Somewhere Else?

Coping with Poor Corporate Hygiene in the Early Stage Company



CHAPTER VI: TAX DISCUSSION FOR THE NON-LAWYER


Minimizing Taxes In The Early Stages

Cheap Stock To Employees And Promoters: The Eat-'Em-All-Up Preferred Stock Approach

Stock For Services: The Passage of Time Approach..

Section 83 And Stock Subject To Vesting



CHAPTER VII: DRAFTING THE BUSINESS PLAN AND THE PLACEMENT MEMO


Business Plans in 2003

Executive Summary

Company Analysis

Industry Analysis

Customer Analysis

Competitive Analysis

Marketing Plan

Operations Plan

Management Team

Financial Plan

Appendix

Other Key Business Plan Issues

The Private Placement Memorandum (PPM

Writing The Private Placement Memorandum

Risk Factors

Certain Transactions

Business Description



CHAPTER VIII: INVESTOR’S TERMS


The Term Sheet

What Will VC's Want For A Security: Common Stock? Preferred Stock? Debt? Warrants?

Common Stock

Warrants

Preferred Stock

Conversion And Redemption

Preferred Stock Redeemable At The Option Of The Holder

Participating Preferred

Antidilution Protection For Investors

Who Controls: Me Or Them?

Registration Rights

Other Key Term Sheet Negotiating Issues



CHAPTER IX: OVERVIEW OF CONTRACTS USED IN RAISING VENTURE CAPITAL


The Contract: Purchase Agreement, Shareholders Agreement, And Rights Of First Refusal

Stockholders Agreement

Rights Of First Refusal



CHAPTER X: SELLING STOCK, PRIVATELY…AND LEGALLY


Private Placement Memorandum And Regulation D

'General' Solicitation and 'General' Advertising

If Regulation D Is Not Available?



CHAPTER XI: COMPENSATING YOUR KEY EXECUTIVES


The "Carrot" Approach: Equity Incentives

Stock Options

Incentive Stock Options (ISOs)

Nonqualified Stock Options (NSOs)

ISO's Versus NSO's

Grossing Up

Miscellaneous Items

The Carrot-And-Stick Approach: The Employment Agreement

Restrictions On Post-Employment Behavior: Noncompetition, Nondisclosure, And Work-For-Hire Clauses



CHAPTER XII: HOW TO GO TO THE PROMISED LAND (I.E. GO PUBLIC)


The Initial Public Offering (IPO)

Whether Or Not To Go Public

Preparation For The Public Offering

Liability

Directed Shares' And 'Hot Issues'

Lock Ups And Other Obstacles To Liquidity

Minimizing-Post IPO Litigation

Analysts' Conflict of Interest: How Are IPOs Affected?



CHAPTER XIII: FINANCING WITH STRATEGIC INVESTORS: JOINT VENTURES


Negotiating Strategic Partnerships

Typical Business Contexts

Negotiation Points

The Duty Of Candor

Corporate Opportunity And Self-Dealing



CHAPTER XIV: APPENDICES


Appendix I: Sample Certificate of Incorporation

Appendix II: Sample Corporate ByLaws

Appendix III: Sample Certificate of Formation

Appendix IV: Sample Private Placement Memorandum

Appendix V: Sample Term Sheet

Appendix VI: Sample Stock Purchase Agreement

Appendix VII: Sample Subscription Agreement, Convertible Preferred Stock

Appendix VIII: Sample Stockholders Agreement
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