News & Events

articles

  • Should You Consider a Phantom Equity Plan?

    By Procopio Senior Associate Aaron Sokoloff Whether you’re a brand-new startup or a veteran of several funding rounds, every emerging growth CEO wants to find the right path to incentivizing employees while conserving capital. One creative approach that might be right for you is a phantom equity plan. Phantom Equity – what is it? Phantom equity is essentially a cash bonus plan that is designed to mimic the effects of having an ownership interest in a company. While the terms v...

    Read More
  • Should You Form a Social Purpose Corporation?

    In the current climate of consumer activism, companies are trying to find ways to show their commitment to principles beyond the financial bottom line. California law provides for “social purpose corporations,” creating a legal structure for companies that are for-profit, and yet want to pursue social and community goals as well. This article describes some of the advantages and disadvantages of forming a company as a California social purpose corporation. Advantages • Legal pro...

    Read More
  • How Your Company's Valuation Can Be Impacted By Convertible Notes

    By Procopio Partner Paul B. Johnson and Attorney Aaron Sokoloff With valuations in venture capital financings at historically high levels, companies are finding that “valuation caps” and other related terms in convertible notes and other convertible instruments are having a significant effect on company capitalization. For example, if entrepreneurs and investors do not consider the effects of outstanding convertible notes when negotiating the terms of an equity financing, there can be...

    Read More
  • When Investors Require Side Agreements

    By Procopio Partner Paul B. Johnson and Attorney Aaron Sokoloff It has become increasingly common in venture financings for investors to require the company to enter into “side letters” – i.e. separate agreements between the company and one particular investor, which are separate from the main investment documents that are signed by all of the investors. Side letters may provide a particular investor with some unique set of rights (for example, information rights beyond what the oth...

    Read More
  • Avoid Three Common Pitfalls in Your Next NDA

    By Procopio Attorney Aaron Sokoloff If you run a company, you have probably had many requests from a potential business partner to sign a non-disclosure agreement (NDA). The NDA may be a short document, containing what appears to be just a few pages of legal boilerplate, and the other party may assure you that this is their “standard” form. While a typical NDA may look innocuous enough, you shouldn’t assume that it will give complete protection to the sensitive i...

    Read More