Structuring Down-Round Financing: Anti-Dilution Protections, Employee Considerations, Mitigating Board Conflicts
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE course will analyze down-round financings from the vantage point of the company and its investors. The panel will discuss the implications of a down round for employees and existing stockholders, board fiduciary and process issues, and technical and structuring considerations.
- Downround financing and its impact on existing investors
- Board fiduciary duties: mitigating risk of shareholder suits
- Independent committee
- Vote of disinterested shareholders
- Rights offering
- Addressing employees with devalued stock awards and options
- Structuring issues
- Anti-dilution protections
- Redemption rights
- Pay-to-play options
The panel will review these and other significant issues:
- How might down-round financing affect existing employees who hold company stock?
- Given the potential board conflicts inherent in down-round financing, what can the board do to mitigate against the risk of shareholder actions?
- What are the different types of anti-dilution provisions, and how do they impact the financing structure?
Mr. Futter focuses his practice on startup companies and their investors and has worked with a wide range of technology... | Read More
Mr. Futter focuses his practice on startup companies and their investors and has worked with a wide range of technology companies. He has represented companies and venture funds in numerous equity and debt financing rounds, from early “friends and family” and seed rounds to later-stage mezzanine financings, and has been on both sides of the table in these transactions. On the corporate side, he routinely handles corporate formations, employee equity plans and mergers and acquisitions. Mr. Futter has also been involved in over 40 corporate spinouts and understands the unique concerns of corporate venture investors. As a former General Counsel and the sole attorney at a venture that went from 80 to 300 employees during his tenure, Mr. Futter has a deep understanding of the challenges faced by fast-growing companies and the type of business-focused legal counsel they require. In addition, his background allows him to counsel clients on a broad range of subjects without the need to involve other subject-matter experts. As a result, he is exceptionally well suited to serve as an external general counsel for growing companies with sophisticated legal needs that do not have internal counsel.Close
James C.H. Lee
Mr. Lee is a member of the firm’s Private Equity and Mergers & Acquisitions Groups. He has extensive... | Read More
Mr. Lee is a member of the firm’s Private Equity and Mergers & Acquisitions Groups. He has extensive experience advising private equity funds, venture capital funds, private investment firms, high-net worth family offices, and their respective portfolio companies in a variety of domestic and cross border transactions, including M&As, leveraged buyouts, growth equity investments, AIV structure transactions, recapitalizations, reorganizations, acquisitions and divestitures, and debt and equity security investments. Mr. Lee’s transaction experience is across a targeted spectrum of industries, including healthcare and digital healthcare, manufacturing/aerospace, industrial, industrial-tech and distribution, advertising technology, Internet of Things, SaaS based services, internet-based products and services, fin-tech, and oil and gas supply-chain and related services. In addition, he advises senior executives, senior advisors, boards of directors, and private equity funds on corporate governance matters, portfolio company operations and management, and executive compensation arrangements and separations. He also advises private equity funds in connection with fund formation, launch and management matters, and advises private investment funds in the formation, offering and management of special purpose investment vehicles, including pledge-capital arrangements.Close