Office Hours with Vela Wood: Recent Episodes
Vela Wood
Office Hours is a podcast hosted by two corporate attorneys, covering general issues related to small businesses and startups.
Office Hours is our podcast covering general issues related to small businesses and startups. Preparing For Funding is a series of Office Hours episodes hosted by VW Partners Kevin Vela and Rad Wood about getting your company’s legal house in order before taking on funding. We are recutting this series to reflect updates in law and venture trends in the last 5 years to better help you navigate through preparing for funding.
In the final episode of this series, we discuss seed rounds, including the difference between convertible notes, SAFEs, and equity rounds, and how seed rounds have changed over the last 5 years.
Time Stamps* 1:57 – Concern for Accelerators * 3:48 – Seed Rounds in 2018 v 2023 * 10:24 – Convertible Securities: SAFEs & Convertible Notes * 15:03 – Why SAFEs Are Popular * 18:58 – Equity Rounds * 23:23 – Party Rounds, Lead Investors & Maturity Dates
Related Content* Vela Wood Venture Deals Report 2022 * Comparing Convertible Instruments * Dilution Done Well * The Mechanics of Converting Convertible Notes * Understanding The New Post-Money SAFE * VDR Ch. 4, Part 1: Economic Terms of the Term Sheet * VDR Ch. 5: Control Terms of the Term Sheet
References* NVCA Model Legal Documents * Series Seed Financing Documents * Y-Combinator SAFE Financing Documents
This episode of Office Hours features Anthony Cimino, Head of Policy & Regulatory Affairs at Carta, an online equity management platform. We discuss the status of several key public policy issues - including the Qualified Small Business Stock (QSBS) tax exclusion, the shifting definition of Accredited Investor, the Corporate Transparency Act, and electronic signatures and filings for 83(b) elections - and how the changes impact investor access, capital formation, and the ability of startups to raise capital.
In this episode, we break down the differences between accelerators and incubators, and how to find the best fit for your company.
In this episode, we discuss the difference between accredited, unaccredited, and sophisticated investors, and where to find them.
Office Hours is our podcast covering general issues related to small businesses and startups. Preparing For Funding is a series of Office Hours episodes hosted by VW Partners Kevin Vela and Rad Wood about getting your company’s legal house in order before taking on funding We are recutting this series to reflect updates in law and venture trends in the last 5 years to better help you navigate through preparing for funding.
In this episode, we discuss pitch decks, including what their purpose is (and isn’t), how to structure an effective deck, and how to get them in front of potential investors.
Time Stamps* 1:00 – The True Value of Pitch Decks * 4:38 – Trends in Pitch Decks * 6:18 – Making Your Pitch Deck as Low Friction as Possible * 9:27 – How to Approach Investors * 11:55 – How to Find Investors * 15:02 – Appropriate Structure of Pitch Decks * 16:31– Including Capital Raise Details in Decks * 18:30 – Multiple Versions of Your Pitch Deck
Related Content* Pitch Decks Are The New Business Plan * Presenting To Investors: Conciseness = Clarity * Startup Starter Pack * Startup Pitch Tips (Part 1) * Getting To “No” * Selected Offering Exemptions
References* 30 Legendary Startup Pitch Decks and What You Can Learn From Them
Office Hours is our podcast covering general issues related to small businesses and startups. Preparing For Funding is a series of Office Hours episodes hosted by VW Partners Kevin Vela and Rad Wood about getting your company’s legal house in order before taking on funding We are recutting this series to reflect updates in law and venture trends in the last 5 years to better help you navigate through preparing for funding.
In this episode, we discuss how to structure a Friends & Family Round to avoid risks that affect later-stage financing rounds.
Time Stamps* 1:00 – Why People Invest * 3:25 – Risks of Early-Stage Investors * 4:50 – Security Considerations in Early-Stage Rounds * 7:26 – Lego Brick Theory * 8:46 – Early-Stage Round Financing Options * 11:13 – Runaway Valuations * 16:17 – Keep Your Investors Updated
Related Content* Let’s All Use Lego® Bricks * Keep Your Investors Updated * Keep Your Investors Updated (Part II) * Selected Offering Exemptions * Silicon Valley Review S2, Ep1: Runaway Valuations
Office Hours is our podcast covering general issues related to small businesses and startups. Preparing For Funding is a series of Office Hours episodes hosted by VW Partners Kevin Vela and Rad Wood about getting your company’s legal house in order before taking on funding We are recutting this series to reflect updates in law and venture trends in the last 5 years to better help you navigate through preparing for funding.
In this episode, we discuss founders’ agreements, including Restricted Stock Purchase Agreements (RSPAs), Confidential Information and Inventions Assignment Agreements (CIIAAs), and Non-Compete and Non-Solicitation Agreements.
Time Stamps* 1:48 – Why It’s Important to Have Founders’ Agreements * 4:35 – How Can Someone Walk Away with a Third of the Company? * 6:03 – Restricted Stock Purchase Agreement (RSPA) * 9:21 – Vesting Schedule * 11:37 – Single Trigger v Double Trigger Acceleration * 14:55 – 83(b) Election * 17:00 – Non-Compete and Non-Solicitation Agreements * 18:15 – Confidential Information and Inventions Assignment Agreement (CIIAA) * 22:37 – Ideal Number of Founders * 26:47 – Founders Stock
Related Content* Everyone Should Vest * Equity Incentive Plans for Startups * Restricted Equity v. Options & 83(b) Elections * How Founder “Vesting” Really Works * The Company Agreement Explained: Confidential Information & Non-Competes * Silicon Valley Review S5, Ep8: Hockey Stick Growth, Board Control & Fiduciary Growth * How Much Equity Should I Grant Advisors? * The 50-50 Equity Split(Up) * Pricing Stock Options
Office Hours is our podcast covering general issues related to small businesses and startups. Preparing For Funding is a series of Office Hours episodes hosted by VW Partners Kevin Vela and Rad Wood about getting your company’s legal house in order before taking on funding We are recutting this series to reflect updates in law and venture trends in the last 5 years to better help you navigate through preparing for funding.
In this episode, we discuss the basics of incorporation, including the difference between corporations v. LLCs, which state to organize in, and when we recommend online document formation tools.
Time Stamps* 1:20 – Corporations v. LLCs * 3:27 – LLCs and Small Businesses * 5:33 – Tax Advantages for LLCs * 7:30 – Single v. Double Taxation * 9:19 – 1202 QSBS * 12:29 – Corporations and Startups * 14:31 – Online Formation Documents * 21:10 – Where Should You Incorporate/Organize? * 24:05 – Standard Delaware Filing
Related Content* What’s The Difference Between A Small Business And A Startup? * Choosing The Right Entity * Why Your Startup Should (Likely) Be A C-Corp * Do I Really Owe Delaware $75,000??? Explaining Delaware Franchise Tax Calculations * Why Your Small Business Should (Likely) Be An LLC
References Section 1202 of the IR Code & Tax Breaks for Small Businesses* * Online Document Formation Tools: AngelList, Clerky, CapBase
Kevin was interviewed by The Insider's Guide to Finance podcast about properly navigating your company through the stages of financing. Check it out!
In this episode, we discuss what constitutes a seed round in Dallas and contrast the three potential structures of a seed round - equity, convertible note, and a SAFE.
In this episode, we discuss why we're not big fans of accelerators, the types of accelerators we do think provide value and are worth participating in, and the clauses to watch out for in an accelerator's program participation agreement.
In this episode, we discuss qualifications for accredited investors, how to find angel investors, how angel syndicates work, which metrics you need to know for a pitch meeting, and how to respond to getting a "no."
In this episode, we discuss what makes a great pitch deck, the best uses of an appendix, how to get warm introductions to investors, and restrictions on general solicitations.
In this episode, we discuss how to mitigate the risks of Friends & Family funding, which include disproportionate valuations, violating SEC and state securities laws, and messy cap tables.
In this episode, we discuss the difference between vesting and reverse vesting, confidentiality agreements and assignment of intellectual property, restricted stock and 83(b) elections, ROFR, and Class F founders stock.
In this episode, we discuss why your company's legal matters, lifestyle businesses v. venture-backed businesses, whether you should form your entity as a corporation or LLC, implications of the new tax code, and the filing requirements for entity formation.
In this episode, we discuss wage claims, entity types, accredited v. non-accredited investors, 83(b) elections, and 409A valuations.
In this episode, we discuss what the term sheet negotiation process establishes, as well as transaction costs and reputation constraints.
In this episode, we discuss when to ask for a breakup fee, conditions precedent, and extended no-shop periods.
In this episode, we discuss the difference between an asset deal and stock deal, forms of consideration, earnouts, and representations & warranties.
In this episode, we discuss what your venture attorney's role is - and isn't - in raising money, expectations for your Friends and Family Round, and best practices when emailing potential investors.
In this episode, we discuss the role of your lawyer in a term sheet negotiation, when and how to walk away from a deal, and the best ways to prepare for a negotiation.
In this episode, we discuss typical management fees and carried interest structures, clawback provisions, the difference between capital calls and blind pools, and the difference between corporate VC arms and strategic investors.
In this episode, we discuss product, charity, and equity crowdfunding, company types that best fit crowdfunding, the importance of being familiar with securities regulations and exemptions, and the future of crowdfunding.
In this episode, we discuss the pros and cons of using convertible debt from both an investor and company perspective, the three different scenarios that will cause a conversion, and when you should and shouldn't use KISS or SAFE agreements.
In this episode, we discuss best uses of cap tables, online cap table management platforms, and how VCs and companies each approach calculating price per share.
In this episode, we discuss restriction on sales, assigning confidential information to the company, tag along rights, no-shop agreements, and indemnification clauses.
In this episode, we discuss the difference between compounding and non-compounding dividends, why VCs ask for redemption rights, when conditions precedent matter, what's included in information rights, and suggested thresholds for registration rights and ROFO.
In this episode, we discuss which activities a company's board of directors must approve, how long a company should keep control of its board, the difference between a board member and board observer, and negotiating a threshold for protective provisions.
In this episode, we discuss why venture-backed startups must vest their equity, why you shouldn't give employees Restricted Stock Purchase Agreements, how to get VCs to agree to a smaller option pool, and the difference between full ratchet anti-dilution and weighted-average anti-dilution.
In this episode, we discuss why the difference between pre-money valuation and post-money valuation matters when negotiating with a VC, why price per share is critical in later financing docs, what is included in a fully-diluted basis, why accepting a lower valuation can be the best option, the difference between participating preferred stock and non-participating preferred stock, and why play-to-pay scenarios are no longer common.
In this episode, we discuss who is responsible for providing the term sheet, which parts of a term sheet are binding, the different types of term sheets, and what should be included in a term sheet.
In this episode, we discuss how to determine how much money to raise, how to prepare a pitch deck, whether or not you need a PPM, four key roles of a lead investor, and first practical steps after deciding to raise money.
In this episode, we discuss the non-monetary value your VC should provide, issues with Friends and Family financing, how the angel investor ecosystem has evolved, and how paying advisors success fees can violate SEC laws. Note: We recommend listening VDR Ch.16 first, before VDR Ch.1
If you're a startup looking to raise capital, here is some of the basic language you need to know.
If you're a startup looking to raise capital, here is some of the basic language you need to know.
Kevin interviews Daniel De Valdenebro of LiftFund about alternative lending sources for small businesses.
In this episode, we discuss the do's and don'ts of terminating employees. A must listen for any small business owner or startup.
You know all of those provisions at the end of contracts and agreements under "Miscellaneous"? Do you ever wonder what they mean? In this episode, we discuss choice of law, venue, and attorneys' fees.
Kevin interviews Dorie Pickle, the founder and director of Creative Pickle, an Austin-based digital agency, about running her own business.
Kevin interviews our client Matt Alexander about his experience launching a curated fashion startup.
Some contracts "automatically renew" unless you affirmatively reject the renewal period. In this episode, we discuss this litigation trap, and how to avoid it.
In this episode, we discuss some common pitfalls when classifying workers as independent contractors.
In our first episode, we introduce ourselves and seek a little outside help in coming up with a better name than "Podcast."