M&A for Technology Companies: Intellectual Property, Human Capital, Due Diligence, and other Key Considerations

Outline

1. Intro and overview of distinguishing features of tech M&A
   1. Key assets in tech M&A -- talent and IP
   2. What makes technology M&A different than M&A generally?
2. Substantive areas of focus in due diligence
   1. Intellectual property and data privacy
      1. (open source, pen testing, ownership of IP/IP assignments, university and government entanglements, exclusivity and upstream poisoning, sufficiency, infringement)
      2. introduction to "residuals clause" in tech NDAs
   2. Capitalization (many private tech companies are VC-backed) and waterfall
   3. HR
   4. Regulatory matters (CFIUS and other FDI regimes, import/export, antitrust)
3. Structuring successful outcomes
   1. Understanding the players
   2. Legal impediments to achieving your objective
   3. Employee matters
      1. Noncompetition and non-solicit agreements
      2. Treatment of unvested equity awards
      3. Holdback arrangements and related tax issues
      4. Employee closing conditions
   4. Risk allocation in the acquisition agreement
      1. Overview -- tech clients generally focus on remediation and identification of risks rather than risk allocation
      2. Reps and warranties
      3. Indemnification vs. RWI policies

Benefits

Attendees will gain insights into the following issues, among others:

• Performing due diligence on the key assets in an acquisition of a tech company and drafting relevant protections in a purchase agreement
• Identifying key constituencies in a tech company's equityholder base and their potentially competing goals in an M&A transaction
• Considering how best to retain the value of a tech company's most important asset, its people