The biotech unicorn, Theranos, is really worth more like $12.55 Billion based on documents uncovered by VC Experts. After joining the unicorn club with their Series C-1 round of financing in early 2014, Theranos has made headlines as the female driven biotechnology company that “promises to make it cheaper and easier for consumers to get blood tests without having to go through a doctor”. The media and the FDA have been all over the company recently for lack of quality control, and lack of actually using their proprietary product. The Media is reporting the company is worth $9 Billion. That is an understatement based on documents that VC Experts found stating their issued shares and the most recent Certificate of Designation which authorized 10,856,174 shares of Series C-3 Preferred Stock at a price of $20.00 per share.
This new round of financing as mentioned at Fortune (thanks Dan Primack) could be an additional $200+ million in capital. The Certificate of Designation for Series C-3 is dated 10/12/2015 and was authorized by the Executive Committee on 9/19/2015. If all 10+ million shares that were assigned to Series C-3 were issued it throws the scorned unicorn up to a $12.55 Billion post-money valuation.
The Series C-3 is part of the unusual structure of their Series C round which also includes a C-1 and C-2. The terms are congruous, being pari passu in the liquidation stack with the other C’s, participating with common after the fact, and being redeemable.
We found the documents that state the actual issued shares for their common and preferred shares, which is up-to-date as of the Series C-2 round, so we are certain the company has a valuation of at least $10.15 Billion as of 3/6/2015. With this new filing, and if all of the C-3 is spoken for, then the company seems to be valuing itself well above the $9 Billion being reported by the media.
You can view all 34 State and Federal Fillings for Theranos at VC Experts.
We also found 83 filings for FanDuel, we are comparing them against arch-enemy DraftKings next week.
In today’s venture financing environment, knowledge of the venture financing process is vital to ensuring fair business practice between entrepreneurs and investors. Many times, deal terms are often agreed to by entrepreneurs without a clear and concise understanding of what the terms actually mean to their company.
Joseph W. Bartlett
Entrepreneurs waste a lot of time soliciting professionally managed venture funds. Venture capitalists operate according to their own largely unwritten rules. In order to play the funding game, you must learn these rules. Below, I’ve listed some of the most-common mistakes. They won’t tell you everything you’ll need to know, but these simple rules should help you understand the VC process and avoid an enormous waste of time, energy, and opportunity.
Joseph W. Bartlett
There are a number of alternatives structures, including general and limited partnerships, business trusts, sole proprietorships, etc. In the final analysis, the choice of entity usually comes down to an election between a corporation, whether S corporation or C corporation, and a limited liability company. The following is a summary of certain important issues.
Joseph W. Bartlett
The appropriate legal domicile for the company’s organization and filings. In almost every case, Delaware is the appropriate choice. Despite media insinuations, Delaware is not a tax haven. State income taxes are levied on the basis of factors which are not influenced by a Delaware domicile. The reasons for Delaware are practical: The Delaware Secretary of State’s office is better organized and staffed so that the initial organization of a corporation or limited liability company is a matter of a few minutes. Copies of the organizational documents for due diligence purposes during the capital raising process are ready on demand. The Delaware Corporate and LLC statutes are better drafted and more thoroughly thought through than those in any other State … the legislature advised by expert lawyers and accountants who are in close touch with developments, contingencies and ambiguities as the same arise.
Most importantly, again focused on the inevitable capital raising process, law firms in this country (and, indeed, around the world) are confident of their competence to handle basic questions of Delaware law governing corporations and LLCs. Therefore, the incremental costs of local counsel in, say, California, Texas or indeed New York is avoided except in arcane situations. The literature on Delaware law, including interpretations by theChancery and Supreme Courts, is abundant. Indeed, law firms in, for example, Israel frequently employ lawyers who have served their time on the payroll of U.S. law firms and have kept themselves up to date on Delaware law. The emerging growth company domiciled in Delaware saves time and money … both in short supply … in raising its capital from investors all over the globe.