article thumbnail

A Sharper Focus: Exploring VC Side Letters

JD Supra: Mergers

A side letter in the venture capital sector is an agreement between an investor and the company it is investing in that entitles the investor to certain contractual rights, which supplement and are in addition to other rights specifically provided to the investor as a holder of equity securities under the companys governance documents the documents (..)

article thumbnail

Delaware Chancery Court Finds Private Equity Majority Owner Not Liable to Minority Investors Where LLC Agreement Waived Fiduciary Duties

JD Supra: Mergers

the minority unitholders of CityMD brought claims against Warburg Pincus, the private equity majority owner of CityMD, and other defendants, alleging, among other claims, breach of good faith and fair dealing in connection with the negotiation and consummation of. Warburg Pincus, et al., By: Cadwalader, Wickersham & Taft LLP

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Disclosure of Preliminary Merger Negotiations: Are SPACs Different?

Deal Lawyers

Last week, the SEC announced settled enforcement proceedings against Cantor Fitzgerald for its alleged role in causing two SPACs that it controlled to make misleading statements to investors about the status of their discussions with potential acquisition targets ahead of their initial public offerings (IPOs).

article thumbnail

My Partner Just Sued Me: Strategies Majority Owners Should Consider in Defending Claims Filed by Private Company Investors

JD Supra: Mergers

Conflicts between co-owners in private companies are common, but the vast majority are worked out through dialogue and negotiation. When these internal conflicts cannot be resolved, however, minority investors may file suit against the company’s majority owner.

Investors 165
article thumbnail

What is Liquidation Preference?

JD Supra: Mergers

​In a venture capital deal, a liquidation preference refers to the payout investors receive in a liquidation event (like a sale or merger) prior to any payments made to the common stockholders. By: Wyrick Robbins Yates & Ponton LLP

article thumbnail

In Tech Due Diligence, It’s Not About Perfect. It’s About Risk.

Beyond M&A

It’s “Can this tech deliver on the growth story investors are buying into?” You can negotiate around it. From Red Flags to Leverage Points We don’t just flag risks. We help our clients ask: Which risks can we live with? Which risks will compound? Which ones can we turn into upside with a 90-day plan post-close?

article thumbnail

Corporate Transparency Act Risks for Startups and Venture-Backed Companies

JD Supra: Mergers

But the CTA presents unique analytical and reporting challenges for startups and venture backed companies because of the special economic and governance rights negotiated with investors in early stage and venture funding rounds. By: Farrell Fritz, P.C.