Executing a Flip Transaction: Bringing a Foreign Startup Into the U.S. Investment Market

Drafting Shareholder Agreements, Transferring Contracts, IP and Tax Concerns

Note: CPE credit is not offered on this program

A live 90-minute premium CLE video webinar with interactive Q&A


Thursday, July 29, 2021

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, July 2, 2021

or call 1-800-926-7926

This CLE webinar will discuss how to structure a "flip" transaction, in which shares of a foreign entity (typically a startup) are exchanged with a U.S. entity to enter the U.S. investment market. The panel will discuss the pros and cons of flip transactions, upfront tax, IP and contractual concerns, and how they are structured and documented.

Description

Venture capital investors looking to invest in startup companies have shown a strong preference for U.S. companies, where the legal and regulatory framework as well as exit strategies are better understood. A foreign startup seeking to become a U.S. entity might consider a flip transaction. In a flip, the foreign shareholders exchange their foreign stock for stock in a new U.S. entity (typically a Delaware corporation). Before proceeding, counsel should consider any tax, intellectual property, and operational issues and associated costs and documentation.

Tax implications should be examined at the outset and may depend on the existing entity's current jurisdiction and the makeup of its current shareholders. Upfront due diligence should include examining company contracts to determine if any third-party consents or approvals are required. Counsel must also consider who will own intellectual property and how IP rights will be shared between the U.S. parent and its foreign subsidiary. The transfer of IP rights could also have tax consequences.

In addition to formation and qualification to do business in the U.S., existing shareholder agreements should be terminated, and corresponding agreements entered into between the U.S. company and startup entity's shareholders. Contract rights will likely remain in the foreign subsidiary, but if not, they will need to be assigned. Depending on where the IP resides, licensing agreements may be required between the parent and subsidiary.

Listen as our authoritative panel discusses the structuring and documentation of flip transactions.

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Outline

  1. Advantages for foreign startups of establishing a corporate presence in the U.S.
  2. Tax issues to consider
  3. Contractual limitations
  4. Intellectual property concerns
  5. Structuring and documenting the transaction

Benefits

The panel will review these and other essential matters:

  • What are the advantages for foreign startups in establishing a corporate presence in the U.S.?
  • What are the key tax considerations, contractual limitations, and IP issues?
  • What are best practices for structuring and documenting the transaction?

Faculty

Alcorn, Sophie
Sophie Alcorn

Founding Attorney
Alcorn Immigration Law

Ms. Alcorn is a top 10 California immigration attorney, entrepreneur, and thought leader. She founded Alcorn...  |  Read More

Mignano, Lindsey
Lindsey S. Mignano

Partner
Smith Shapourian Mignano

Ms. Mignano represents emerging and small businesses in the Bay Area.  She provides businesses with counseling and...  |  Read More

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Early Discount (through 07/02/21)

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Early Discount (through 07/02/21)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include program handouts.

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