VC Experts data has shown that average valuations increase dramatically between the Series A & B rounds of financings. Teespring has not only followed this trend, but has become an outlier in early stage financing with their $611M valuation.
Want more? Check out our Early Stage Deal Term Report, it’s FREE! Looking for other companies? Go to Intelligence and get complete financing details including Deal Terms, Valuations, EFDS, PPS for Common and Preferred for thousands of private companies.
Guest post by Esuga T. Abaya, Julia D. Corelli, Robert A. Friedel – Pepper Hamilton LLP
On March 25, the U.S. Securities and Exchange Commission (SEC) adopted final rules amending Regulation A to implement the provisions of Section 401 of the Jumpstart Our Business Startups Act (JOBS Act).  The new rules confirm most of the rules that had been proposed by the SEC in December 2013.
Regulation A+, as the amendment has been called by market observers, expands the current Regulation A exemptions. All offers and sales require registration of the securities offered under the Securities Act of 1933 (Securities Act) unless an exemption applies. Regulation A is such an exemption and, consistent with the intention of the JOBS Act, is an attempt to make it easier for small businesses to raise capital. By adopting these new rules, the SEC intended to “craft a workable revision of Regulation A that would both promote small company capital formation and provide for meaningful investor protection.”
Guest post by Paul Scrivano and Noah Kornblith – O’Melveny & Myers LLP
One of the questions that invariably arises in a transaction involving a change of control of a Delaware corporation is what actions the target board of directors must take in order to properly discharge its duties arising out of Revlon v. MacAndrews & Forbes Holdings. Two recent Delaware decisions provide important guidance on this recurring issue.
Revlon does not mandate either an active pre-signing or active post-signing market check.
We’ve been digging in to some technology companies for our next big Aggregate Industry Report that we will be releasing next week, and we came across Ginger.io. They use a proprietary mobile sensing platform to model patient behavior for different health conditions and symptoms. Ginger.io has raised north of $27M based on regulatory filings and we valued them at $50M post-money after their Series B round. You can see their investment profile below.
Guest post by Attorneys at Davis Polk & Wardwell LLP
On March 7, 2014, Vice Chancellor Travis Laster of the Delaware Court of Chancery found a financial advisor liable for aiding and abetting breaches of fiduciary duties by the board of Rural/Metro Corporation in connection with the company’s 2011 sale to an affiliate of Warburg Pincus LLC. In its 91-page, post-trial opinion, the Court concluded that the financial advisor allowed its interests in pursuing buy-side financing roles in both the sales of Rural/Metro and Emergency Medical Services (“EMS”) to negatively affect the timing and structure of the company’s sales process, that the board was not aware of certain of these actual or potential conflicts of interest, and that the valuation analysis provided to the board was flawed in several respects. Both the Rural/Metro board of directors and a second financial advisor to Rural/Metro settled before trial for $6.6 million and $5.0 million, respectively.
This opinion is the latest example of the Court of Chancery’s focus on conflicts of interest involving sell-side financial advisors, as most recently demonstrated in the Del Monte and El Paso decisions. Rural Metro thus underscores the very real and potentially significant liabilities to financial advisors. It also serves as a salient reminder that the actions of advisors, including those carried out unbeknownst to the board, may be imputed to boards that fail to exercise reasonable oversight of their so-called informational “gatekeepers” in a sale process.
Take a moment to watch ACE Portal‘s General Counsel, Jason Behrens, interview Joe Bartlett, the Co-founder of VC Experts and Special Counsel at McCarter & English. Their conversation focuses specifically on the difference between investor accreditation and suitability, which is a vital but often obscure topic for capital raisers. The conversation also narrows in on suitability in a post-JOBS Act context.