Do you track liquidation scenarios in your startup?

By rickColosimo / February 1, 2011 /

Fred Wilson has had a series of posts relating to M&A transactions, generally revolving around case studies. This one on ChiliSoft describes how certain features embedded in the capitalization table (liquidation preferences and floating price warrants), coupled with being acquired for shares rather than cash led to a seemingly dramatic erosion of value for the…

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What do I “do” with due diligence?

By rickColosimo / August 9, 2010 /

Here’s a recent post by Rick Colosimo in the Five-Minute General Counsel series on due diligence, with an even shorter short form due diligence request list than our own investor-based due diligence list. One question we haven’t answered here yet is: what is the point of all this? Well, investors/acquirors have three main risks to…

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NOLs can be hard to understand

By rickColosimo / February 23, 2009 /

Net operating losses, or NOLs, accumulate when a business has tax losses in a given year rather than profits. They are typically carried back to earlier profits but may be accumulated in as carry-forwards for up to 20 years. Sirius, after recently merging with XM, has an unfortunate asset: accumulated NOLs of about $6 billion.…

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Use a deal diagram shape template to capture details

By rickColosimo / January 19, 2009 /

In both my past as a corporate lawyer and as a strategic advisor, I often find myself drawing deal diagrams for a variety of parties. Even among those familiar with deal diagrams, I have not found any great uniformity in the choice of shapes; most people go with rectangles all around. However, having been in…

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