The High-touch Legal Services® Blog…for Startups!

© 2009-2020 Dana H. Shultz, Attorney at Law

What Must We Do if We’re Going to Be Acquired?

photo of document binders standing next to one another

A successful exit by acquisition is one of the great thrills of entrepreneurship. That exit does not come easily, however. This post discusses, by category, the most important documents and information that you will need to provide during the acquirer’s due diligence process.

Corporate Documentation

  • Articles of incorporation and bylaws, as amended
  • Minutes of board and shareholder meetings and actions
  • Share transfer ledger, including name and address of each shareholder
  • Agreements pertaining to shares and shareholders’ rights (buy-sell, voting rights, etc.)
  • List of holders of option or warrants and all applicable agreements

(more…)

Ten Tips for Success in the U.S.

Having helped more than a dozen foreign companies set up operations here during the past few years, I am pleased to offer “Ten Tips for Success in the U.S.” on the Downloads page – just Sign Up for Free Downloads using the drop-down list in the sidebar.

Here are the titles of the ten tips, which are discussed in greater detail in the document:

  1. Work with complementary businesses that are already established here
  2. Manage overseas personnel on the principle “trust but verify”
  3. Form your corporation or limited liability company properly
  4. Be ready for a legal system that is different from the one back home
  5. Identify and protect intellectual property (IP) that is used here
  6. Develop detailed employee and independent contractor agreements
  7. Choose an accountant with international tax experience
  8. Be prepared to obtain a federal employer identification number
  9. Conduct due diligence on potential investors
  10. Agree on business terms before you prepare a written agreement

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

Investor Due Diligence Redux

On July 2, I posted Investor Due Diligence Should Go Both Ways. The thrust of that post: Founders should conduct due diligence on prospective investors just as investors conduct due diligence on founders.

In a similar vein, I just read Make Sure Your VC Isn’t A Jerk by Mark Peter Davis of DFJ Gotham Ventures. Well-written, succinct and worth reading.

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

Investor Due Diligence Should Go Both Ways

"Due Diligence" sign for blog post about investor due diligenceDue diligence is a routine part of an investor’s decision whether to invest in a company. The company also should conduct its own investor due diligence.

A couple of years ago, I worked with a company (“Client”) that provided e-mail security products. Previously, Client’s founder (“Founder”) had arranged for an equity investment by a company controlled by an individual in Southern California (“Investor”).

First Mistake: No Legal Counsel

One of Founder’s huge mistakes was not seeking legal counsel to review the terms of the investment. Two of those terms were disastrous for Founder. (more…)