Tag Archives: Financing

SAM Client Kairos Ventures Leads Series A Funding Round For PolyCera Membranes

kairos venturesStubbs Alderton & Markiles client Kairos Ventures led a Series A funding round for PolyCera Membranes raising $9 Million. This round of funding will enable PolyCera Membranes, which develops and markets next-generation membrane technology for industrial wastewater treatment and process separation, to make immediate investments to build out its global manufacturing, R&D and sales capabilities. The Series A funding round was led by Kairos Ventures with follow on capital provided by Bluestem Capital and the Wolfen Group – two of PolyCera’s existing investors through Water Planet.

To read the full press release visit here.

Stubbs Alderton attorneys representing Kairos Ventures in this deal are Louis Wharton and Kelly Laffey.

About Kairos Ventures
Kairos Ventures invests early, often during the formative stages of a company, and work closely with the world’s leading scientists to commercialize their technologies. Depending on the stage of development and the capital requirements of each venture, they make investments between $150,000 and $20 Million. While KV are hands-on investors, they also recognize that it is the entrepreneurs’ sweat, hard work and perseverance that will drive the growth of their companies. They strive to ensure that the founding team, who make the early sacrifices in pursuit of their venture, retain the majority of the ownership in their companies. In addition to providing early-stage capital, KV leverages our expertise and extensive network of professionals specializing in all disciplines required to build a successful company, including legal, finance, marketing, operations, business development and HR. They provide these services to early stage companies in their portfolio to allow the entrepreneurs to focus their energy on continuing to innovate and pushing the envelope in their respective fields.

For more information about our Venture Capital and Emerging Growth Practice , contact Louis Wharton at lwharton@stubbsalderton.com or Kelly Laffey at klaffey@stubbsalderton.com.

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SAM Client Starship Technologies Raises Additional $25 Million in Funding & Appoints CEO

starship logoStubbs Alderton & Markiles client Starship Technologies, a company developing small self-driving robotic delivery vehicles,  announced this week that they have raised an additional $25 million in seed funding and have appointed Lex Bayer as Chief Executive Officer. The round includes follow-on investments from existing investors including Matrix Partners and Morpheus Ventures. Additional investors include Airbnb co-founder Nathan Blecharczyk, Skype founding engineer Jaan Tallinn, and former chairman and CEO of Metro-Goldwyn-Mayer, Gary Barber.

To read the full press release visit here.

Stubbs Alderton attorney representing Starship Technologies is Louis Wharton.

About Starship Technologies
Starship Technologies is building a fleet of robots designed to deliver goods locally in 15-60 minutes. The delivery robots have traveled tens of thousands of miles, met millions of people and have been tested in over 100 cities around the world to date. They drive autonomously but are monitored by humans who can take over control at any time. Launched in July 2014, by two Skype co-founders, Ahti Heinla and Janus Friis, Starship is changing the way packages, groceries and food are delivered.
Visist www.starship.xyz 

About Louis Wharton
louis wharton
Louis A. Wharton is a Partner of the Firm and Director of the Preccelerator Program. Louis’ practice focuses on advising startup, emerging growth and middle market companies across a spectrum of industries in securities compliance, corporate finance, mergers and acquisitions and general corporate matters. He counsels clients in the technology, internet/e-commerce, pharmaceutical, apparel and entertainment industries, among others. Louis serves as a member of the Board of Directors of the Los Angeles Venture Association (LAVA), and previously served on the San Fernando Valley Bar Association Board of Trustees and the Executive Committee of ProVisors’ Technology Group.

For more information about our Venture Capital and Emerging Growth Practice , contact Louis Wharton at lwharton@stubbsalderton.com

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SAM Client Milk and Eggs Closes $2.5M Financing Round

 

milk-and-eggs

Stubbs Alderton & Markiles, LLP announced that it represented client Milk and Eggs in its $2.5M financing round led by Morningside Venture Investments.

Milk and Eggs is a farm-fresh grocery delivery service. Their goal is to connect customers to great farmers. Customers sign up for subscriptions of milk, eggs, dairy, meats, vegetables, and fruit on a weekly or bi-weekly basis, with free membership and delivery and the ability to change orders at any time. All vegetables, fruits, dairy, eggs, and meats will be the freshest available as they are locally acquired. And, with an environmentally friendly aggregation and delivery system, it’s a win for their customers and the environment.

SAM Attorneys that represented Milk and Eggs were Joe Stubbs and Nick Feldman.

For more information about our Venture Capital & Emerging Growth practice, contact Joe Stubbs at jstubbs@stubbsalderton.com.

 

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Stubbs Alderton & Markiles, LLP Closes Financing Deal to Form Indigenous Media

Stubbs Alderton & Markiles, LLC closed a financing deal to form digital media company Indigenous Media.  This new digital media company is founded by  the team behind YouTube Channel WIGS, including producer Jon Avnet (Black Swan), his son Jake Avnet and director Rodrigo Garcia (In Treatment).  The deal received funding from communications conglomerate WPP and U.K. TV giant ITV.  Additional investors include Steven TischShari Redstone‘s Advancit Capital and Michael PriceJon Miller, former CEO of digital media for News Corp, has been appointed Indigenous chairman.   

To view the full Hollywood Reporter press, click here.

For more information regarding our Internet, Digital Media & Entertainment practice, contact SAM Partner Greg Akselrud at (818) 444-4503 or gakselrud@stubbsalderton.com

 

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SAM Preccelerator Program Presents: “Fundamentals of an Investor Pitch” with Eli Eisenberg

Join Stubbs Alderton & Markiles, LLP

for this exclusive event!

 

“Fundamentals of an Investor Pitch”

 

Thursday, May 15, 2014

 

5:30pm-8:00pm

 

      • Learn what really interests investors
      • Learn how to get their attention and KEEP their attention
      • Proper use of PowerPoint as a tool to enhance your message
      • Techniques to make you a more credible presenter

Register!

Featuring

 
 
Eli Eisenberg, CEO
Straight Line Management

Eli Eisenberg has more than 35 years of hands on experience in the financial and business management of entrepreneurial companies.  As founder and CEO of Straight Line Management™, he specializes in providing financial expertise and mentoring to high-potential early stage companies. Mr. Eisenberg helps them to increase profitability, secure funding, evaluate and capitalize on opportunities, streamline financial operations, and get the financial side of the business under control.

Since launching his Straight Line Management consulting company in 1991, he has served as a trusted advisor to more than 70 early-stage companies, both traditional and web based, across a variety of industries including software and game companies, high and low tech manufacturing companies, wholesale distribution companies, product and services companies and non-profit organizations.

Prior to starting Straight Line Management, Mr. Eisenberg served as Chief Financial Officer for three high technology companies, served in senior financial and operational management positions (including VP of Finance and VP of Operations) in several other high growth companies, and established, ran and sold his own successful consumer products company.

Mr. Eisenberg has extensive experience in strategic planning, capital raising strategies, financial management and forecasting, business plan preparation, and development and streamlining of management reporting systems and controls. He received his MBA from the University of California, Berkeley in 1976 and became a Certified Public Accountant in the State of California is 1978. He is also a Fellow of the Larta Institute, where he conducts workshops and mentoring sessions for entrepreneurs in conjunction with their NIH, NSF, TATRC and USCA Commercialization Assistance Programs

 

 

   

Stubbs Alderton & Markiles, LLP
1453 3rd Street Promenade, Suite 300
Santa Monica, CA 90401

Parking
4th Street/Broadway ramp or in the Santa Monica Place Mall

We hope to see you there!

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SAM Client Atomico Ventures Leads Investment Round of $51M to EdTech Veteran Knewton

Atomico3

Stubbs Alderton & Markiles, LLP client Atomico Ventures announced that it led the $51M investment round to EdTech veteran Knewton.  Other investors included GSV Capital, as well as previous backers Accel Partners, Bessemer Venture Partners, First Round Capital, FirstMark Capital and Founders Fund, along with debt financing from Silicon Valley Bank.

Knewton is an education technology company that personalizes digital courses so every student is engaged and no one slips through the cracks.  As students progress through a Knewton-powered course, Knewton figures out what each student knows and how that student learns best, then recommends what to study next. Teachers use Knewton-powered predictive analytics to detect gaps in knowledge and differentiate instruction for each student.

Knewton plans on using the funds to expand its company into a global business, including adding 80-100 new employees to strengthen its existing data science and engineering teams, and moving into a new, larger headquarters in NYC.

To read the full press release on Tech Crunch, click here.

About Atomico Ventures
Atomico is a growth stage international investment firm, focused on helping the world’s most disruptive technology companies scale and reach their full potential globally.  Founded by Niklas Zennström, the co-founder of Skype, they have become the investor of choice for ambitious entrepreneurs due to their experience of building global companies, unique international network, and ability to help companies operationally, with offices in London, Beijing, São Paulo, Istanbul and Tokyo.

For more information about our Venture Capital & Emerging Growth practice, contact Scott Alderton at (818) 444-4501 or salderton@stubbsalderton.com

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SAM Preccelerator Program Presents: “What’s Your Valuation?” with Dave Chariton – December 12, 2013

Join Stubbs Alderton & Markiles, LLP
for this exclusive event!

Valuation
 
 
 

“What’s Your Valuation?”

 
As a start-up seeking angel or venture financing, you’re inevitably going to be discussing  your company’s “valuation”… so you may as well start thinking about it now!  In this illuminating presentation, we will demystify terminology and explain how valuations are determined.  In addition, we will discuss the role of cap tables, dilution, funding rounds, and negotiation.  By the end, you will understand why answering “What’s Your Valuation?” may be as much art as science.


December 12, 2013

5:30pm-8:00pm

**Networking to Start!**

Register Now!

Featuring

Dave Chariton Dave Chariton, CFO-For-Hire/Strategic Advisor

Dave Chariton is a cross between a CFO-for-hire and strategic advisor, helping entrepreneurs and executives analyze their numbers and processes, develop and implement business plans, and make more confident decisions.  His clients include both start-up and mid-market companies, and his eclectic experience ranges from doing internal innovation work for a Big-4 Consulting company to representing tv and film writers & directors. Previously, Dave was co-founder and CEO of a digital effects company, and began his career in the mailroom of the William Morris Agency.  He has a Masters in Economics from Stanford, and a Bachelors Degree in Economics from MIT.

 Sponsored by

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Stubbs Alderton & Markiles, LLP

1453 3rd Street Promenade, Suite 310

Santa Monica, CA 90401

Parking

4th Street/Broadway ramp or in the Santa Monica Place Mall

We hope to see you there!

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Stubbs Alderton & Markiles, LLP Advises Morphlabs, Inc. in its $10m in Series D Funding

Morphlabs logo

Los Angeles, August 22, 2013.  Stubbs Alderton & Markiles, LLP has announced that it advised client Morphlabs, Inc., the leader in efficient and powerful OpenStack(R) solutions for service providers and the enterprise, in its $10 million Series D financing.  The round, which was led by Tallwood Management and Entropy Research Lab and also included existing investor G2iG, brings the total capital raised by the company to $22.5 million since inception. Morphlabs will use the proceeds from this round to extend the company’s leadership position in the Asia OpenStack market through an aggressive training and seminar program, and through its partnership with NEC.

To read the full press release regarding the funding, click here.

 

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Using Convertible Promissory Notes to Finance a Startup

What is a convertible promissory note? 

A convertible promissory note is a debt instrument that is convertible into equity at a future date either automatically upon the occurrence of certain events or at the choice of the investor.  Even though it is a debt instrument, investors who purchase convertible promissory notes issued by a start-up company are expecting the notes to convert into equity at a future date, since equity (unlike straight debt) allows investors to participate in the upside of the company.  A simple return of principal and interest is not attractive to an early stage investor who is taking tremendous risk in funding a start-up.  To compensate investors for the risk they are taking, the notes sold are often convertible at a discount to the price of the next preferred equity round and will also contain a “cap” – or a maximum conversion price – on the price at which the note will later convert.

What is preferred stock?

Preferred stock is an equity ownership interest in a company with certain features that are designed to protect an investor’s investment.  For example, investors in preferred stock typically receive cash distributions before holders of common stock and also receive certain rights relating to the control of the company, such as board representation and the right to veto certain company activities.

Why do start-up companies and investors sometimes prefer the sale of convertible promissory notes over equity to finance a startup?

Convertible promissory notes are sometimes used to finance start-up companies when the prospective investors lack the sophistication to properly price an equity round, when the size of the financing does not warrant the costs of a traditional preferred stock financing or when the company and the investors want to avoid pricing an equity round.  In addition, convertible note financings are often used because they are perceived to be quicker and cheaper to structure and document than preferred stock financings.

What are some of the risks for investors financing a start-up through a convertible promissory note?

Even though convertible notes often contain price discounts to the next equity round and conversion caps, purchasers of convertible notes are often not sufficiently compensated for the risk they are taking in financing a start-up.  Caps are often set at a premium to the company’s value at the time the notes are issued and discounts may not be adequate, especially as the time between the issuance of the notes and the priced equity round increases.  Moreover, initial investors are subject to the risk that later investors, who often have greater bargaining power (especially if a company is in dire need of financing), will attempt to renegotiate the terms of the promissory notes to their detriment.

Convertible notes also may not adequately compensate early stage investors to the extent the investors provide resources to the company, such as key customer or supplier introductions, or otherwise add credibility or other value to the company.  If the value of the company rises substantially as a result of the investor’s efforts, the investor is ultimately increasing the price they will pay for their own equity in the company, which is clearly a perverse outcome.

What are some of the risks a company that issues convertible promissory notes faces?

Convertible notes work well for start-up companies when the value of the company increases between the time of the debt financing and a preferred stock financing.  However, if the value of the company falls, investors who purchased convertible notes may end up owning more equity in the company then the company anticipated at the time of the debt financing.  This occurs because the price discount feature often included in the notes enables the investors to purchase equity at a price below what they would have paid at the time they purchased the convertible notes.  Moreover, because the purchased equity often contains a liquidation preference, in addition to obtaining a larger equity position in the company at the expense of the founders, investors will also likely obtain an increased preference over the founders to the cash of the company in the event of a sale, dissolution or winding up of the company.  Another downside of convertible notes is that, in the event a convertible note is not converted into equity prior to its maturity, investors could demand that the note is repaid with principal and interest, or potentially force the company into bankruptcy if the loans cannot be restructured.

Conclusions

The issuance of convertible promissory notes can be an effective means for start-up companies to raise capital.  However, before raising capital through the issuance of promissory notes, investors and companies need to carefully evaluate the risks associated with the issuance of promissory notes in comparison to other financing alternatives.

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Jonathan Friedman discusses how convertible promissory notes often provide a fast and cheap way for start-up companies to raise capital.  However, before raising capital through the issuance of promissory notes, companies need to evaluate the potential impact of convertible debt on the company’s future capital structure, and investors need to evaluate whether a straight equity investment is preferable to the purchase of debt.  Jonathan’s practice focuses on venture capital and corporate finance, intellectual property licensing, mergers and acquisitions, securities law and general corporate and business matters. Jonathan has represented corporations and other entities in a wide variety of industries, including Internet and e-commerce, apparel, medical devices, entertainment and high technology.

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For more information regarding promissory notes, raising capital, or similar inquiries, please contact Jonathan Friedman at (818) 444-4514 or jfriedman@stubbsalderton.com.

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Scott Alderton to be Featured on Critical Mass For Business Radio Show – Tuesday, September 11, 2012

Tune in to hear Scott Alderton, Partner and Chair of the Stubbs Alderton & Markiles, LLP Venture Capital & Emerging Growth Practice Group as he discusses startup company fundability on Richard Franzi’s Critical Mass for Business Radio Show on Tuesday, September 11, 2012 at 4:00pm.  To listen to the broadcast, click here.

Scott Alderton is a corporate and technology lawyer who focuses exclusively on advising middle-market, technology, emerging growth, and development stage companies in the areas of corporate and securities, mergers and acquisitions, high technology, business, licensing, intellectual property, the Internet and multimedia. Scott has over twenty-six years experience working with technology and emerging growth companies at all stages along their evolutionary path.  For more information regarding our Venture Capital & Emerging Growth Practice, contact Scott at salderton@stubbsalderton.com or (818) 444-4501.

Follow us on Twitter @StubbsAlderton

To view the podcast from this event, see below:

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