Representing Rapid Growth Companies: Advisory Boards, Conflicts of Interest, Mitigating Risks

The Legal Pitfalls of Aspiring Unicorns

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


Tuesday, November 10, 2020

1:00pm-2:30pm EST, 10:00am-11:30am PST

Early Registration Discount Deadline, Friday, October 16, 2020

or call 1-800-926-7926

This CLE webinar will provide corporate counsel advice on the unique legal challenges of representing businesses seeking rapid growth to achieve unicorn status, from developing an advisory board and distinguishing the board in scope and use from a board of directors, how to handle conflict of interest issues, and the best means of mitigating risks before an initial public offering or sale of the company.

Description

The dream of every startup and entrepreneur has been to build a highly successful company and brand. Since 2013 the aspirational goal for these individuals has been known as a "unicorn"--a privately held startup company valued at over $1 billion--a rare and unique creature. While most counsel are unlikely to represent a "baby" (or a "maybe") unicorn with prospects to mature into a unicorn or other rapid-growth startup, the entities present unique legal challenges.

When examining what makes a business unicorn distinct from less successful operations is the use, make-up, and expertise of an advisory board, rather than a traditional board of directors. An advisory board, which is sometimes known as a council, is a collection of experts responsible for guiding a founder, CEO, or company representatives. An advisory board role may evolve with the company into a position on the company's board of directors. The advisory board members generally advise across disciplines and aim for the company's long-term returns. Having an advisory board that is diverse in gender, race, and areas of expertise is good for business by lending itself to a diversity of ideas and perspectives.

Startups are often both the labors of love and the side gig of the creators. The company, its business partners, initial employees, and advisers brought in early in the process should communicate clearly about what constitutes conflicts of interest, how to protect the business' intellectual property and brand, and other legal and practical matters through proper documentation and corporate governance.

Finally, since the goal is growth, the last step is prepping the startup for its initial public offering or sale of the company. Before that and to maximize value, counsel must be prepared and have addressed outstanding claims that create future liability for the company. Resolving employment claims, SEC scrutiny, and holdover issues from prior acquisitions and general and limited partners are a crucial element to putting a business on the fast track to a lucrative IPO or sale of the company.

Listen as our authoritative panel provides practical advice for handling the rapid growth startup seeking to be the next unicorn, how to limit litigation and conflict risks, and how to develop a roadmap at inception that provides proper governance and advice to the founders.

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Outline

  1. Defining unicorn, baby unicorn, and similar rapid growth companies
  2. Advisory boards vs. board of directors
  3. Conflict of interest
  4. Risks to mitigate pre-IPO / pre-Sale
    1. Employee claims
    2. SEC scrutiny
    3. Claims arising in an acquisition
    4. Compliance issues
    5. Fund LP/GP disputes

Benefits

The panel will review these and other relevant topics:

  • What defines a unicorn and how does a business structure itself to achieve this status as an end goal?
  • How should a startup develop its advisory board? When and how should an advisory board be used in lieu of a board of directors?
  • What are the proper steps to avoid conflicts of interests between co-creators and initial employees and establish corporate governance procedures?
  • What risks must counsel address and prior to a startup's IPO or sale?

Faculty

Winkler, David
David E. Winkler

Shareholder
Fredrikson & Byron

Mr. Winkler provides clients with strategic advice on business objectives by pairing his finance and tax background...  |  Read More

Additional faculty
to be announced.

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