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Paul Zimmerman

Showing 4 posts in Corporate & Securities.

Corporate & Securities
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Wavebreak Media Ltd

New California Law Seeks to Close the Corporate Gender Gap, But Is It Constitutional?

Think of California and you’re likely to conjure up images of palm trees, movie stars, surfers, the Golden Gate Bridge and maybe even In N Out Burger. But what the Golden State is perhaps best known for is its progressivism. Time and again, causes that take root in California are often precedential, which explains the adage: as California goes, so goes the nation.

Enter Senate Bill 826. Recently signed by Governor Jerry Brown, the law requires publicly held, California corporations to have in place at least one female board member. These companies have until December 31, 2019 to comply, and then in 2021, additional measures kick in – when boards with five or more seats will be required to include at least two female directors. The failure of corporations to abide by the new rule comes with a notable price tag – fines from $100,000 to $300,000 can be imposed. (Read More)

Corporate & Securities
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Maria Kraynova ©

Mind If I Take a Seat: Shareholder vs. Board Votes in Venture Capital Transactions

Seats on a board of directors are, no doubt, coveted. In fact, when investing venture capital into a company through an equity financing, VC investors often negotiate to receive one or more board seats for themselves or their designees. Additionally, these investors frequently require that specified matters not be pursued by the company without board approval (including approval by the VC’s board designees). To a large degree, angling for a board presence and mandating board approval makes sense to the extent doing so grants the VC investors a greater level of control and serves to protect their investment. But to what degree should important business decisions be taken, by default, at the board level? And when might it be a better practice to put certain company actions to a shareholder vote? (Read More)

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Maxim Kazmin ©

Regulation A+ deserves a “D” for Disappointment

Ordinary investors have largely been excluded from opportunities to invest in tech startups due to federal securities laws. Under the Securities Act of 1933, issuers could sell their securities without burdensome disclosure requirements by selling exclusively to “accredited” investors: entities with over $5 million in assets or wealthy individuals with annual income exceeding $200,000 (or $300,000 combined with spousal income) or has a net worth over $1 million (excluding primary residence). If issuers wished to sell to non-accredited investors, they would need to file a registration statement with the SEC or, alternatively, distribute a lengthy financial disclosure document to investors.  As a result, startups raised equity capital generally from accredited investors. The masses were excluded. (Read more)

Corporate & Securities
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venimo ©

M&R Expands Breadth of Expertise with Crowdfunding Practice

Crowdfunding is the practice of raising monetary contributions for a business or venture from a large number of investors via the Internet. Since 2010, crowdfunding has experienced explosive growth, and become a $5 billion industry. $5 billion industry and are gaining investor acceptance—offering developers and owners a new way to finance projects, and start-up entrepreneurs an inexpensive way to raise capital. (Read more)