I had a conversation with my lawyer on this very topic TODAY, and she said different valuation caps would require us to create different securities filings for each investor, and that the additional fees were bad and this was a bad idea...unless we were only raising money from people in California, in which case it didn't matter because the rules made it easy.
Anyone know what the legal ramifications are for this? I'm trying to figure this out as we may be raising money in the near future.
Get a new lawyer. You can definitely do a round with different investors getting different share prices. At the very least, your lawyer can structure a Series A-1, A-2, A-3, each with a different share price, but otherwise being identical in terms and structure and everyone signing the same docs. Just make sure preferences are clear that the classes get liquidated pari pasu, if that's what you want.
No, it will not. I'm not sure what filing fees you are referring to. Your Schedule D with the SEC? There's not much else that needs to be filed. This can all be done in one 409A evaluation immediately after the financing.
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I had a conversation with my lawyer on this very topic TODAY, and she said different valuation caps would require us to create different securities filings for each investor, and that the additional fees were bad and this was a bad idea...unless we were only raising money from people in California, in which case it didn't matter because the rules made it easy.
Anyone know what the legal ramifications are for this? I'm trying to figure this out as we may be raising money in the near future.
Get a new lawyer. You can definitely do a round with different investors getting different share prices. At the very least, your lawyer can structure a Series A-1, A-2, A-3, each with a different share price, but otherwise being identical in terms and structure and everyone signing the same docs. Just make sure preferences are clear that the classes get liquidated pari pasu, if that's what you want.
Thanks for this. Not sure I totally understand all the legalese. What about the filing fees? Will each note be counted as a separate offering?
Thanks again. I really appreciate it.
No, it will not. I'm not sure what filing fees you are referring to. Your Schedule D with the SEC? There's not much else that needs to be filed. This can all be done in one 409A evaluation immediately after the financing.