Stubbs Alderton & Markiles, LLP announced that it represented client IRIS.TV in its $18M Series B Funding round. IRIS.TV ingests millions of videos every day from the world's largest broadcasters, publishers, and content creators around the world. Each video is then analyzed and assigned hundreds of additional data segments to build a more comprehensive understanding of each individual video. These new data segments can be utilized for many solutions including video recommendations, analytics, insights, contextual video ad targeting, and the creation of additional first-party data. We believe the world's premium video content and journalism should be easier for users to discover and for marketers to target and align their messaging.
For the full press release regarding the IRIS.TV $18M Series B Funding: https://www.wsj.com/articles/intel-backs-video-data-firm-offering-an-ad-targeting-alternative-to-cookies-11617789600?page=1&utm_campaign=2021%20-%20Series%20B%20Announcement&utm_medium=email&_hsmi=120057069&_hsenc=p2ANqtz-80y_Kw30GvsfzxZelyj_nWNZ_2UNOxfbgl9OTeXNjTCT48LRVVA8RB-At94QZEWguBEBWZQvOnu0kHat-AFNm79yy-X6uHC-tyLm9T2AzWcHKGu08&utm_content=120057069&utm_source=hs_email
SA&M Attorneys Advising IRIS.TV in this transaction included:
Louis Wharton: Louis Wharton is a Partner of the firm. Louis’ practice focuses on advising venture capital funds and angel networks, along with middle-market, emerging growth, early-stage and public companies in corporate finance, mergers and acquisitions, securities compliance and general corporate matters. Louis counsels clients in the technology, e-commerce, and digital media industries, among others.
Kelly Laffey: Kelly Siobhan Laffey is senior counsel of the firm and the Director of Business Affairs at the Preccelerator. Kelly’s practice focuses on advising emerging growth and middle market companies in the technology, digital, internet, fintech, interactive media (i.e., AR and VR), and entertainment industries. Kelly counsels clients on issues related to corporate governance and formation, venture capital and other financings, joint ventures, employee compensation, complex stockholder and operating agreements, securities law regulation and other general corporate matters. Kelly also advises investors and funds in connection with venture capital and other financings.
Daniel Garber: Daniel Garber is an Associate of the Firm. Daniel’s practice focuses on corporate transactions, including venture capital financings, mergers and acquisitions, securities law compliance, and other general corporate and business matters.
About Stubbs Alderton & Markiles’ Venture Capital & Emerging Growth Practice
As a result of the Firm’s deep roots in the emerging growth market, Stubbs Alderton & Markiles understands the unique practical business needs of early-stage and high-growth companies. The Firm typically acts as outside general counsel to its emerging growth clients, including participating in board-level discussions and serving as an extension of the management team. The Firm strives to understand its clients’ business and markets and give them senior-level attention, which enables the Firm to provide practical and cost-effective legal advice. Representing private companies as they seek funding from venture capital firms, angel investors or other investors has been a key component of the Firm’s practice. The Firm also represents and has extensive relationships with the most prominent venture capital firms and angel investor groups in Southern California. The Firm has extensive experience in advising on a wide range of financing structures, including seed and angel investor financings, venture capital investments, private equity and other institutional financings, bridge loans, and PIPE transactions for public companies. The Firm’s representation of cutting-edge companies and leading investors allows it to stay apprised of developing market trends and, where appropriate, to make introductions to investors and companies.
Stubbs Alderton & Markiles’ client Tot Squad has sold its baby gear cleaning and repair services for an undisclosed sum to BabyQuip, the world’s leading mom-powered baby gear rental service. Such services will be rebranded as BabyQuip Cleaning Services and this critical service will be available immediately in Los Angeles and Washington, DC. BabyQuip will also be taking over Tot Squad’s partnership with Uber, providing thoroughly clean and sanitized car seats to families in NYC. Tot Squad will now focus on virtual and in-person services like lactation support and sleep consulting, as well as continuing with car seat installations.
SA&M attorneys that represented Tot Squad in this transaction were Caroline Cherkassky and Kelly Laffey.
To read the full press release visit here.
About the new Tot Squad
TotSquad.com is a curated marketplace that connects new parents with services, delivered via video-chat & in-person. From pregnancy to the playground, Tot Squad’s mission is to improve access to services like sleep & lactation consulting, car seat installation & babyproofing. Founded in 2010 by Founder & CEO Jennifer Beall Saxton, the company has served nearly 100,000 families.
About BabyQuip
Founded in May 2016, BabyQuip is the world's leading baby gear rental service, delivering thousands of clean, quality baby gear items to families who don't want to haul bulky gear while traveling throughout the US and Canada. The platform will soon enable gig-economy moms and others the opportunity to clean baby gear on behalf of families. Strategic BabyQuip partnerships include Destination Hotels (a Hyatt brand), Guesty, HomeAway, and UrbanSitter. For additional details on BabyQuip, including a list of Quality Providers, please visit babyquip.com.
For more information about our Emerging Growth & Venture Capital Practice, contact Scott Alderton at or Louis Wharton at .
Los Angeles, CA (January 7th, 2020) – Stubbs Alderton & Markiles, LLP, Southern California’s leading business law firm, proudly announces that it has promoted Kelly Siobhan Laffey, formerly Associate, to Senior Counsel in the firm’s corporate practice.
“Since joining the firm in 2016, Kelly has demonstrated what a fantastic lawyer she is. Over the last couple of years Kelly has become instrumental in our practice both in terms of developing significant client relationships, and in taking on leadership roles within the Preccelerator and firmwide. It is easy to promote attorneys who are as talented and dedicated as Kelly,” said Managing Partner Scott Alderton.
Ms. Laffey’s practice focuses on advising emerging growth and middle-market companies in the technology, digital, internet, interactive media (i.e., AR and VR), and entertainment industries. Kelly counsels clients on issues related to corporate governance and formation, venture capital and other financings, joint ventures, employee compensation, complex stockholder and operating agreements, securities law regulation and other general corporate matters. Kelly also advises investors and funds in connection with venture capital and other financings.
“I’m honored to be recognized by the partnership and to take this next step in my career at SA&M. The firm has fostered an incredibly collegial and entrepreneurial environment in which associates can build their practice and I’m looking forward to continuing to build mine and be a part of the ongoing growth of the firm,” said Ms. Laffey.
To read Kelly Siobhan Laffey’s full bio, click here.
About Stubbs Alderton & Markiles, LLP
Since its inception in 2002, Stubbs Alderton & Markiles, LLP has worked alongside innovators and leaders of businesses large and small whose ideas are world-changing. Our firm takes the long-term approach to their relationship with clients, partnering with them all along their evolutionary path, from idea to growth to exit, or whatever their future may hold. Their mission is and has always been, to provide technically excellent legal services in a consistent, highly-responsive and service-oriented manner with an entrepreneurial and practical business advisory perspective.
With robust corporate, mergers and acquisitions, venture capital and emerging growth, public securities, entertainment, business litigation, and intellectual property practices, SA&M’s attorneys assist clients with virtually every legal issue a business or an individual may face. They approach our practice from a team perspective, and every engagement receives our attorneys’ full focus and the benefit of decades of collective wisdom and experience. Using that experience, their attorneys craft sophisticated innovative solutions to our clients’ legal and business problems that keep the future strategy and roadmap of a company in mind.
Stubbs Alderton & Markiles is frequently recognized for excellence in the practice of law and outstanding commitment to the Southern California tech community. The firm, their practices, and their attorneys are honored by clients, other lawyers from around the country, national legal publications, and ranking organizations such as Best Lawyers’ “Best Law Firms”, inclusion in Chambers USA: America’s Leading Lawyers for Business, and many attorneys listed in Thomson Reuters’s Super Lawyers. For more information, please visit www.stubbsalderton.com
Contact:
Heidi Hubbeling
Stubbs Alderton & Markiles, LLP
(818) 444-4529
Stubbs Alderton & Markiles’ attorney Kelly Laffey will be featured as a speaker at Digital Hollywood Fall 2019 “ICOs, Financing, Packaging & Investment: From Entertainment & Indie Project to Technology & Startups.” The event will be Thursday, November 14th from 2:15 PM to 3:30 PM at the Skirball Cultural Center in Los Angeles in Herscher Hall, 3rd Floor, Room 305. Other panelists include:
For more information on Digital Hollywood Fall 2019 and the panelists visit here.
Kelly Siobhan Laffey is an Associate of the Firm and the Director of Business Affairs at the Preccelerator.
Kelly’s practice focuses on advising emerging growth and middle market companies in the technology, digital, internet, interactive media (i.e., AR and VR), and entertainment industries. Kelly counsels clients on issues related to corporate governance and formation, venture capital and other financings, joint ventures, employee compensation, complex stockholder and operating agreements, securities law regulation and other general corporate matters. Kelly also advises investors and funds in connection with venture capital and other financings.
Kelly also counsels clients in connection with mergers and acquisitions matters, including asset and equity acquisitions and dispositions, cross-border transactions, spin-off transactions, secured lending transactions, financing restructurings, and corporate reorganizations.
Drawing on her diverse work experience in the entertainment arena, including time spent with talent agencies, and music and television production companies, Kelly also assists on matters related to licensing marketing, and exploitation of intellectual property rights.
Stubbs Alderton & Markiles’ client Kairos Ventures led a Series B investment round for Actuate Therapeutics, a clinical stage biopharmaceutical company, raising $21.7 Million. Also participating in this round were DEFTA Partners, Tech Coast Angels, and existing investor Bios Partners.
To read the full press release visit here.
Stubbs Alderton & Markiles’ attorneys representing Kairos Ventures in this deal are Louis Wharton, Kelly Laffey, and David Stoops.
About Kairos Ventures
Kairos Ventures invests early, often during the formative stages of a company, and works 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 Kairos Ventures is hands-on 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, Kairos Ventures leverages their 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
Stubbs Alderton & Markiles’ attorney Kelly Laffey will be featured as a speaker at Digital Hollywood Spring 2019 "ICOs, Financing, Packaging & Investment: From Entertainment & Indie Project to Technology & Startups." The event will be Thursday, May 23rd at the Skirball Cultural Center in Los Angeles in Herscher Hall, 3rd Floor, Room 305. Other panelists include:
For more information on the panel visit here.
Kelly Siobhan Laffey is an Associate of the Firm and the Director of Business Affairs at the Preccelerator.
Kelly’s practice focuses on advising emerging growth and middle market companies in the technology, digital, internet, interactive media (i.e., AR and VR), and entertainment industries. Kelly counsels clients on issues related to corporate governance and formation, venture capital and other financings, joint ventures, employee compensation, complex stockholder and operating agreements, securities law regulation and other general corporate matters. Kelly also advises investors and funds in connection with venture capital and other financings.
Kelly also counsels clients in connection with mergers and acquisitions matters, including asset and equity acquisitions and dispositions, cross-border transactions, spin-off transactions, secured lending transactions, financing restructurings, and corporate reorganizations.
Drawing on her diverse work experience in the entertainment arena, including time spent with talent agencies, and music and television production companies, Kelly also assists on matters related to licensing marketing, and exploitation of intellectual property rights.
Stubbs Alderton & Markiles client Mythical Entertainment has acquired Youtube comedy channel, Smosh, bringing together two long-running Youtube channels. Through the deal, Mythical has expanded its business to over 70 million subscribers and 250 million monthly views across 14 YouTube channels. Ron Bender's firm assisted alongside Stubbs Alderton in the deal.
To read the full article on Variety visit here.
Stubbs Alderton & Markiles attorneys representing Mythical Entertainment in this deal were Greg Akselrud and Kelly Laffey.
About Mythical Entertainment
Mythical is an entertainment company, lifestyle brand, and creative collective made up of passionate people brought together by their love of comedy, camaraderie, and the do-it-yourself, direct-to-fan approach to content. Its thousands of popular videos have been viewed over 5 billion times across the Internet. Mythical was founded by the comedic duo and life-long best friends Rhett & Link, who lead the company in every endeavor.
For more information about our Internet, Digital Media & Entertainment practice area contact Greg Akselrud at
Stubbs Alderton & Markiles’ client ClarityRx, a skincare company based in Newbury Park, has been acquired by Topix, a national skincare products manufacturer backed by private equity firm, New Mountain Capital. Founded in 2003, ClarityRx has a sixteen-year track-record of partnering with the most successful spas and estheticians, including the Hand & Stone spa network.
To read the full press release visit here.
Stubbs Alderton & Markiles’ attorneys representing ClarityRX in this transaction are Scott Galer and Kelly Laffey.
About ClarityRX
ClarityRx® products represent the perfect synergy of plant and food-based ingredients and the latest in cosmetic technology to bring you a healthy alternative for results-driven, clinical skin care. Their products are produced without the use of harsh and harmful synthetic chemicals.
For more information about our Mergers & Acquisitions practice area contact Scott Galer at or Kelly Laffey at
Stubbs Alderton & Markiles' client VivoAquatics, the leading provider of innovative water management and real-time monitoring platform for hotels, resorts, fitness clubs, and other commercial facilities announced it has secured Series A financing led by Level Equity, a growth equity firm focused on software and automation companies. The funding represents another milestone for the company as leading brands and properties continue to adopt the VivoPoint software and IoT platform to proactively manage the risks and costs of water within a facility while improving the guest experience.
To read the full press release visit here.
Stubbs Alderton & Markiles’ attorneys representing VivoAquatics in this deal are John McIlvery, Kelly Laffey, and Brent Armitage.
For more information about our Venture Capital and Emerging Growth practice, contact John McIlvery at
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Stubbs Alderton & Markiles’ client AllTrails, an online database of curated digital outdoor maps, has received a significant investment from Spectrum Equity, in connection with Spectrum’s acquisition of a majority stake in the Company, to help accelerate product development, add more trail content around the world and grow the Company’s user base. AllTrails was advised by Stubbs Alderton & Markiles while GP Bullhound served as financial adviser. Spectrum Equity was advised by Latham & Watkins. Financial terms of the transaction were not disclosed.
To read the full press release visit here.
Stubbs Alderton & Markiles’ attorneys representing AllTrails in this deal are Louis Wharton, Marc Kenny, and Kelly Laffey.
ABOUT ALLTRAILS
AllTrails helps people explore the outdoors with the largest collection of detailed, hand-curated trail maps as well as trail reviews and photos crowdsourced from its community of over 9 million hikers, mountain bikers and trail runners. AllTrails has the #1 Outdoors app for iOS & Android with more than 12 million mobile downloads and reaches 44 million people each year through alltrails.com, the App Store and Google Play.
For more information visit www.alltrails.com
For more information about our Mergers and Acquisitions practice area contact Louis Wharton at [/vc_column_text][/vc_column][/vc_row]
Stubbs Alderton & Markiles client Malauzai, a provider of mobile and Internet banking solutions for community financial institutions, has been acquired by Finastra, a fintech company that builds and deploys next-generation technology on an open software architecture the company developed and a cloud system.
To read the full press release visit here.
Stubbs Alderton attorney John McIlvery has represented Malauzai since its inception through acquisition, demonstrating how SA&M creates and builds relationships with its clients throughout their evolutionary path. Other attorneys participating in the transaction included Caroline Cherkassky and Kelly Laffey.
About Malauzai Software
Malauzai was incorporated in 2010 in response to the growing demand for a technology company that could provide innovative mobile solutions for community financial organizations. As a cool company in a cool town with a focus primarily on community financial institutions, Malauzai provides consumer and business digital banking that enhance the customer experience for mobile and Internet banking, ultimately resulting in increased value for financial institutions.
For more information about the Mergers & Acquisitions practice, contact John McIlvery at or Kelly Laffey at .
Stubbs 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 or Kelly Laffey at .
Stubbs Alderton & Markiles client ICPW Liquidation Corporation, f/k/a Ironclad Performance Wear Corporation (OTCBB: ICPW), a maker of high-performance and task-specific PPE gloves, has announced that it has been acquired through an Asset purchase by Brighton Best International, Inc.
To read the full press release visit here.
Stubbs Alderton & Markiles, LLP attorneys representing ICPW Liquidation Corporation in this transaction were Louis Wharton, Scott Alderton and Kelly Laffey.
About Ironclad
Originally founded in 1998 in El Segundo - California, IRONCLAD is today headquartered in Farmers Branch, Texas and is the industry leader in high-quality task-specific PPE gloves. IRONCLAD continues to leverage its leadership position in the safety, construction and industrial markets through the design, development, and distribution of specialized task-specific gloves for industries such as oil & gas extraction; automotive; police, fire, first-responder and military and more. Ironclad engineers and manufactures its products with a focus on innovation, design, advanced material science, dexterity, and durability. Ironclad's gloves are available through industrial suppliers, hardware stores, home centers, lumber yards, automotive stores and sporting goods retailers nationwide; and through authorized distributors around the world. Built Tough for the Industrial Athlete™. To learn more and see more, visit: www.ironclad.com
About Stubbs Alderton & Markiles, LLP
Stubbs Alderton & Markiles, LLP is a business law firm with robust corporate, public securities, mergers and acquisitions, entertainment, intellectual property, brand protection and business litigation practice groups focusing on the representation of, among others, venture backed emerging growth companies, middle market public companies, large technology companies, entertainment and digital media companies, investors, venture capital funds, investment bankers and underwriters. Stubbs Alderton’s clients represent the full spectrum of Southern California business with a concentration in the technology, entertainment, videogame, apparel and medical device sectors. Our mission is to provide technically excellent legal services in a consistent, highly-responsive and service-oriented manner with an entrepreneurial and practical business perspective. These principles are the hallmarks of our Firm.
For more information on our Mergers & Acquisitions and Public Securities practices, contact Louis Wharton at .
In this two-part series, Kelly Laffey discusses the legal pitfalls that startups can avoid when forming their company. Kelly counsels clients on issues related to corporate governance, mergers and acquisitions matters, and securities regulation and compliance. She also assists with financing for large private corporations, and entity formation and succession planning for professional services firms. Kelly provides general business counseling on a variety of up-and-coming regulatory issues for small and emerging companies that offer commercial services, allowing them to explore new business opportunities in various states. Drawing on her diverse work experience in the entertainment arena, including time spent with talent agencies, and music and television production companies, Kelly also assists on matters related to licensing, marketing, and exploitation of intellectual property rights.
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In Part 1 of this series, I described some typical legal problems that startup companies face when they try to go it alone in the early stages of their business-related to the choice of entity form and jurisdiction and common issues that arise with respect to the division of equity. In part 2, I discuss issues related to securities laws and intellectual property and finally offer some words of advice regarding how to manage the costs of hiring an attorney early on.
Compliance with Securities Laws
Any issuance of securities, meaning stock, LLC interests, options, warrants, convertible notes, convertible securities (or SAFEs) and more, will be subject to federal and state securities laws. Startup companies often need to find an exemption to the registration requirements of federal securities laws until they are ready to go public. Securities law is a large and complex subject that really requires a good corporate attorney to help explain those obligations relevant to a particular company in a particular given circumstance. Failure to comply with securities laws can result in a huge financial burden on the company, the founders and recipients of equity, including employees and investors, when fines are imposed or the recipients are forced to pay a much higher price for the equity than what was intended. An experienced securities practitioner can help you find the right exemption and implement the right process to avoid fines and adverse consequences.
Protecting Your Intellectual Property and Employment Issues
It is critical to have proper employment documentation in place and such documentation should properly protect the company’s intellectual property. Typical employment agreements include “at-will” offer letters, independent contractor agreements, consultant or advisor agreements and stock incentive award documents. Employment laws vary from state to state so depending on what state you’re in, you may need to include specific provisions to comply with applicable state law. One of the most important employment documents which every employee (including co-founders) should sign is a proprietary or confidential information and inventions assignment agreement. This document ensures the company’s confidential information will remain confidential and that any ideas, work product or deliverables created by the company’s employees while working for the company will be owned by the company. These agreements generally prevent key employees who have developed significant intellectual property for the company from claiming rights in such intellectual property in the event that they leave.
Trying To Do It Yourself
For the reasons stated above and many more, one of the biggest mistakes a company can make is trying to do the legal formation work on their own or with an inexperienced legal service provider. All of the mistakes described above are correctable but correcting them takes time and can incur greater cost than getting professional advice from the beginning. Many firms have very reasonable startup packages for early-stage companies that include both forming the company properly and providing a suite of documents covering most, if not all, of the above issues for the company’s use, for a very reasonable flat fee. These packages are designed to get the company started and provide you with the basic forms of agreements you need to be protected. Once these are put in place, the company is unlikely to incur significant legal costs until it raises capital or undergoes another significant event. While a startup package fee may still seem like a significant amount of money to spend in a company’s early stages, the value is immeasurable over the life and success of the business.
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For more information about startup legal pitfalls, Startup Formation, and other emerging growth issues, contact Kelly Laffey at .
For more information on the Preccelerator, SA&M's early-stage accelerator, visit https://preccelerator.com/
In this two-part series, Kelly Laffey discusses the legal pitfalls that startups can avoid when forming their company. Kelly counsels clients on issues related to corporate governance, mergers and acquisitions matters, and securities regulation and compliance. She also assists with financing for large private corporations, and entity formation and succession planning for professional services firms. Kelly provides general business counseling on a variety of up-and-coming regulatory issues for small and emerging companies that offer commercial services, allowing them to explore new business opportunities in various states. Drawing on her diverse work experience in the entertainment arena, including time spent with talent agencies, and music and television production companies, Kelly also assists on matters related to licensing, marketing, and exploitation of intellectual property rights.
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In my practice as a corporate attorney, I work primarily with startup and emerging growth companies. This article may read similar to an advertisement for legal services and there may be some truth to that. My ultimate goal as an attorney, however, is to save startup companies time and money (and stress) in the long run by doing things right from the start which will allow the company to put more resources to work on growing the business rather than fixing mistakes that could have easily been avoided.
Attorneys are often brought it in to work with clients who have done a significant amount of the formation and organization work themselves or through an online legal service provider at a low cost. While it is certainly understandable that a very early stage company does not want to incur more legal cost than it has to, what seem like very minor issues to founder can lead to a lot of unnecessary clean-up work and time spent determining the best way to fix those issues including if and how to disclose them to potential investors, strategic partners or others that are critical to the business.
The unfortunate fact is that errors in company formation usually come to light when a company is about to engage in its first major financing or strategic transaction and potential investors or strategic partners start doing their “due diligence” on the company, i.e., looking into its formation documents, the founder agreements, employment agreements, etc. This is often a critical time for the company as the founders have begun conversations with potential investors or a strategic partner, built momentum and are usually geared to start scaling the business. When the problem areas are identified and those activities are put on hold, it can cause a panic at the company, requiring lawyers to address the errors on a tight timeline in order to minimize the damage and not lose momentum. The result is typically a very high legal bill for a financing or strategic transaction.
In this two-part series, I describe some common legal issues encountered by startups that are not properly considered without legal counsel and which, when thoughtfully discussed with legal counsel prior to forming the company, should spare the company from legal expenses for corrective measures.
Choosing the right entity AND the right jurisdiction for you.
One of the first decisions a new company has to make is what legal entity form to take. There are without a doubt dozens of articles that say you should be a C-corp for these reasons or you should be an LLC for those reasons. Maybe you’ve read or know something about S-corps and you think that sounds like a good idea. The reality is that the right entity form for your company is very specific to the facts and circumstances of your company. Factors we consider include, among others: How many founders are there? How many employees will the company have? Will the company raise money from VCs or angels (and if so, does it expect to do so right away or will that be much further in the future of the company)? What is the anticipated size of the business? In what industry does the business operate? What might make the most sense now might not serve as the best form later and the form of entity can generally be changed later if necessary. These are all factors a good lawyer or tax advisor can talk through with a new business and provide guidance regarding which options to select based on the company’s business plans.
The less often thought about issue is where to form the company. As a lawyer practicing in what’s been termed “Silicon Beach,” most of our clients are based in California and so many assume they should organize or incorporate in California. For some companies, being formed in California is perfectly fine, however, California can also be problematic for a number of reasons. Many outside investors do not like to invest in California entities because California does not have the established corporate jurisprudence that Delaware has and so there is an element of unpredictability in California. Companies will often be advised to incorporate in Delaware because Delaware corporate law is seen as both business and investor friendly. However, if a company incorporates in Delaware, it has to engage a registered agent located in Delaware and so for some companies, it does not always make sense to pay the registered agent fees. Other factors to consider when choosing a jurisdiction are filing fees, franchise taxes and required annual filings. These are all considerations a corporate lawyer can help startups navigate.
Division of Ownership; Dilution and Vesting.
This can be an awkward conversation amongst founders but it is an important conversation to have early on in the life of the business. How much of the company should each founder own? What is each founder bringing to the company in terms of skills, resources and service and how do we value what each founder adds? How much dilution are the founders willing to endure and from which sources, i.e., outside investors, an employee option or stock pool, venture debt transactions, etc.? Should the equity be subject to vesting and continued service to the company?
I’ve often encountered very early-stage clients who have 2 to 3 initial founders and they have already diluted themselves by giving away equity such that together, they own less than half of the company. Founders are so passionate and focused on developing the idea and growing the business, they don’t necessarily have good insight when it comes to managing the cap table. Further, I’ve seen companies provide equity grants to service providers or intended partners of the business without subjecting the grants to vesting or continued service to the company over time. We typically recommend that all service-related equity vest over a certain number of years to ensure the company is getting the intended value in exchange for that equity.
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For more information about Startup Formation and other legal pitfalls for startups, contact Kelly Laffey at . Stay tuned for Part II of the Startup Pitfalls Series on Monday, October 16th.
For more information on the Preccelerator, SA&M's early-stage accelerator, visit https://preccelerator.com/
(Los Angeles, CA - June 19, 2017) Stubbs Alderton & Markiles, LLP announced that its clients, Kravitz and Kravitz Back Office Solutions, have been acquired by Ascensus. Kravitz is a retirement administration firm and Cash Balance specialist focused on bringing its clients the latest in the design, administration, and management of corporate retirement plans. Kravitz Back Office Solutions delivers private-label actuarial services to third-party administrators across the country to help them grow and succeed with Cash Balance plans.
Stubbs Alderton & Markiles' attorneys representing Kravitz in the transaction included Scott Galer and Kelly Laffey.
For the full press release, click here.
About Stubbs Alderton & Markiles, LLP
Stubbs Alderton & Markiles, LLP is a business law firm with robust corporate, public securities, mergers and acquisitions, entertainment, intellectual property, brand protection and business litigation practice groups focusing on the representation of, among others, venture backed emerging growth companies, middle market public companies, large technology companies, entertainment and digital media companies, investors, venture capital funds, investment bankers and underwriters. The firm’s clients represent the full spectrum of Southern California business with a concentration in the technology, entertainment, videogame, apparel and medical device sectors. Our mission is to provide technically excellent legal services in a consistent, highly-responsive and service-oriented manner with an entrepreneurial and practical business perspective. These principles are the hallmarks of our Firm. Visit www.stubbsalderton.com
For more information about our Mergers & Acquisitions practice, contact Scott Galer at
SAM Client and Digital-video studio New Form announced this week that it has raised $18 million in second-round funding from the U.K.’s ITV and Discovery Communications, with ITV taking a minority stake in the company. In addition, with its investment ITV entered into a strategic partnership with New Form, which includes a multiyear commercial agreement that will bring New Form content to the ITV Hub starting in 2017. Congratulations to New Form on this success!
Stubbs Alderton attorneys representing New Form in this transaction were Greg Akselrud and Kelly Laffey.
To read the full feature in Variety Magazine, click here.
For more information about our Internet, Digital Media & Entertainment Practice, contact Greg Akselrud at or (818) 444-4503.