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Articles 1 - 9 of 9
Full-Text Articles in Law
Examining The Tax Advantage Of Founders' Stock, Gregg D. Polsky, Brant J. Hellwig
Examining The Tax Advantage Of Founders' Stock, Gregg D. Polsky, Brant J. Hellwig
Scholarly Articles
Recent commentary has described founders' stock as tax-advantaged because it converts founders' compensation income into capital gains. In this paper we describe various founders' stock strategies that offer this character conversion and then analyze whether they are, on the whole, tax advantageous. While the founders' stock strategies favorably convert the character of the founders' income, they simultaneously turn the company's compensation deductions into non-deductions. Whether founders' stock is tax-advantaged overall depends on whether the benefit of the founders' character conversion outweighs the cost of the company's lost deductions. We use various hypothetical to illustrate this tradeoff. We conclude that founders' …
Examining The Tax Advantage Of Founders' Stock, Gregg D. Polsky, Brant J. Hellwig
Examining The Tax Advantage Of Founders' Stock, Gregg D. Polsky, Brant J. Hellwig
Scholarly Works
Recent commentary has described founders' stock as tax-advantaged because it converts founders' compensation income into capital gains. In this paper we describe various founders' stock strategies that offer this character conversion and then analyze whether they are, on the whole, tax advantageous. While the founders' stockstrategies favorably convert the character of the founders' income, they simultaneously turn the company's compensation deductions into non-deductions. Whetherfounders' stock is tax-advantaged overall depends on whether the benefit of the founders' character conversion outweighs the cost of the company's lost deductions. We use various hypothetical to illustrate this tradeoff. We conclude that founders' stock is …
Implication Of U.S. Venture Capital Theories For The Korean Venture Ecosystem, Kab Lae Kim
Implication Of U.S. Venture Capital Theories For The Korean Venture Ecosystem, Kab Lae Kim
The Journal of Business, Entrepreneurship & the Law
No abstract provided.
Venture Capital Investments In China: The Use Of Offshore Financing Structures And Corporate Relocations, Jing Li
Michigan Business & Entrepreneurial Law Review
Based on an analysis of the relevant Chinese laws and regulations governing the corporate governance structure of venture capital (“VC”)-invested firms, as well as a discussion on the feasibility of employing different alternatives to make direct and indirect VC investments in Chinese portfolio firms, this article studies a hand-collected sample consisting of the twenty-nine VCbacked Chinese portfolio firms that have been financed and listed from 1990 to 2005 in order to empirically show how these investments were actually made in practice. The findings show that twenty-three out of the twentynine firms received their VC investments in various offshore holding entities, …
A Very Quiet Revolution: A Primer On Securities Crowdfunding And Title Iii Of The Jobs Act, Thaya Brook Knight, Huiwen Leo, Adrian A. Ohmer
A Very Quiet Revolution: A Primer On Securities Crowdfunding And Title Iii Of The Jobs Act, Thaya Brook Knight, Huiwen Leo, Adrian A. Ohmer
Michigan Business & Entrepreneurial Law Review
This essay introduces the complex regulatory regime that governs the public sale of all securities, no matter how small the offeror. It is intended as a rudimentary roadmap for the start-up or its counsel and will, hopefully, help to illuminate the traps for the unwary while providing an overview of the regulatory universe in which securities crowdfunding will operate.
Do Vcs Use Inside Rounds To Dilute Founders? Some Evidence From Silicon Valley, Brian Broughman, Jesse Fried
Do Vcs Use Inside Rounds To Dilute Founders? Some Evidence From Silicon Valley, Brian Broughman, Jesse Fried
Articles by Maurer Faculty
In the bank-borrower setting, a firm's existing lender may exploit its positional advantage to extract rents from the firm in subsequent financings. Analogously, a startup's existing venture capital investors (VCs) may dilute the founder through a follow-on financing from these same VCs (an “inside” round) at an artificially low valuation. Using a hand-collected dataset of Silicon Valley startup firms, we find little evidence that VCs use inside rounds to dilute founders. Instead, our findings suggest that inside rounds are generally used as “backstop financing” for startups that cannot attract new money, and these rounds are conducted at relatively high valuations …
Information Issues On Wall Street 2.0, Elizabeth Pollman
Information Issues On Wall Street 2.0, Elizabeth Pollman
University of Pennsylvania Law Review
Billions of dollars have flooded new online marketplaces for trading private company stock. These marketplaces stand poised to become important, lasting features of the private company world as they provide a central meeting place for buyers and sellers and potentially increase the liquidity of private company stock. Increased liquidity is particularly important to investors in start-up companies, as these companies have faced longer periods of time before going public or being acquired. The new marketplaces also raise significant information issues, however, that threaten their legitimacy and efficiency. This Article is the first to examine these information issues — lack of …
State Legislative Efforts To Improve Access To Venture Capital, Brian K. Krumm
State Legislative Efforts To Improve Access To Venture Capital, Brian K. Krumm
Book Chapters
No abstract provided.
The New Exit In Venture Capital, Darian M. Ibrahim
The New Exit In Venture Capital, Darian M. Ibrahim
Vanderbilt Law Review
This Article is the first to explore the emergence of a potentially game-changing third exit option in venture capital: secondary markets for the sale of individual ownership interests in private start-ups and venture capital funds.6 Unlike IPOs and trade sales, secondary markets operate at the individual investor level rather than at the start-up level. Because investors have different liquidity needs, an individual-investor option offers exit to those who need it-for example, to the serial entrepreneur who wishes to start another venture or to the VC whose fund is about to expire and who must return capital to his investors. Secondary …