Reverse Mergers Hinge on Due Diligence and Cleaning Up Public Shells

Guest Post by Laura Anthony, Esq – Legal & Compliance, LLC

When a publicly traded company “goes dark” and becomes delinquent in its filing requirements, it generally becomes a public shell and is no longer quoted on the Over the Counter Bulletin Board Exchange (OTCBB). However, with the assistance of an experienced securities attorney, the shell company can be restored so that a merger candidate can be introduced.

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What We’ve Been Reading

This post is an assembled collection of insights, stories and commentary on startups, venture capital and entrepreneurship.

Zero-sum marketing channels: Good or bad for a startup to pursue?

Many marketing channels are “zero-sum,” meaning that if one company wins a piece of the channel, other companies cannot also use that piece. Jason Cohen looks at whether zero-sum marketing for startups is a good idea in Zero-sum marketing channels: Good or bad for a startup to pursue?

What Startups Can Learn from General McChrystal about Combining Strategy and Execution

 Over at First Round Review, Adam Pisoni interviewed General Stanley McChrystal to see how he helps companies become more effective. They examine one key question: “How do you create a cohesive strategy where many people are executing in unison when the strategy and environment are constantly changing?” Read some of General McChrystal’s thoughts on the subject in What Startups Can Learn from General McChrystal about Combining Strategy and Execution.

Understanding an M&A Term Sheet

 Congratulations! You just received an offer to acquire your company.  A serious buyer will present you with a term sheet that covers the basic terms of the transaction.  Do not make the mistake of agreeing to a term sheet without consulting with your lawyer. Jamie Leigh, Partner at Cooley LLP and blogger at CooleyGo, goes over why it’s important to understand term sheets before you agree to anything in UNDERSTANDING AN M&A TERM SHEET.

Startups are like Patients. They Need Doctors and Hospitals.

I interact with a lot of startups on a daily basis, while they are in various stages of evolution. Often, it feels like being a doctor or running a hospital. That led me to think that startups are a little bit like patients. Some are in the Intensive Care Unit. We’re not sure if they will survive. They need intensive care in order to make it. Every other day someone will come into the Emergency Room, with something urgent that needs to be looked at, either because they had an unexpected accident, or because a problem erupted and they are bleeding. William Mogayar at S-U-M Startup Management examines the analogy of startups and patients in Startups are like Patients. They Need Doctors and Hospitals.

From Around the Web

This post is an assembled collection of insights, stories and commentary on startups, venture capital and entrepreneurship.

Banks and Entrepreneurs: Breaking the Logjam

The partners at Matrix Partners look at the innovation occurring in the fintech sector and why the banks are not leading it.

The Babe Ruth Effect in Venture Capital

Chris Dixon, General Partner at a16z, looks at the “Babe Ruth” effect in venture capital and why new VCs have trouble with it in his blog at CDIXON BLOG.

The Management Framework that Propelled LinkedIn to a $20 Billion Company

First Round Capital – The Review looks at how well defined decision making authority is key to successful CEO transitions and some of the management lessons Jeff Weiner learned.

Proposed Treasury Regulations May End Private Equity Management Fee Waivers

Brian M. Blum, James Chudy and C. Brian Wainwright at Pillsbury Winthrop Shaw Pittman’s InvestmentFund Law Blog look at the common practice of private equity firms converting their right to receive management fees from the funds they manage into the right to receive profits and distributions from the funds through management fee waiver arrangements to achieve a lower tax rate and how the IRS may want to change this.

If You Chase Two Rabbits…

Tomasz Tunguz, Partner and venture capitalist at Redpoint, looks at “When is the right time to expand geographically, add a second product or pursue another customer segment?” Read what his three part answer is.

 

Activists Redux

Recently, I wrote a piece analyzing the pros and cons for this country’s economy on Activists Investors, citing Marty Lipton versus Lucian Bebchuk of the Harvard Law School on the other side (see https://blog.vcexperts.com/2015/05/12/activists-the-problem-for-u-s-leadership-in-global-capital-markets/#more-562). My conclusions, however, were based on a issue which, as far as I was aware, none of the analysts, journalists or academics had identified as the most important negative consequence resulting from the rising tide of Activists’ challenges to public company management and boards.

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