Foreign Currency

If you’re a founder of a U.S. company thinking about raising capital from foreign investors, chances are good that you’ll want to utilize Regulation S.

There’s a general rule in the United States that if you want to sell stock in your business, you have to register the stock offering with the SEC. The registration process is cost-prohibitive for startups. Luckily, there are a number of commonly used exemptions. If you’re offering stock to US residents, you’ll likely be relying on a Regulation D exemption like Rule 506. Regulation S is a commonly used exemption for US companies that want to sell their stock to foreign investors.

There are two key parts to the Regulation S exemption:

The sale of securities must be an offshore transaction.
There…

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Beer tasting

Over the course of the next few months, Collin Roberts and I will be putting together a brewery law blog series with what we hope will be helpful information for people interested in starting their own brewery or distillery in Washington. Starting a brewery or distillery isn’t all that different than starting any other business, but there are a...

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Hedge Fund Side Pocket Accounts

This is our fourth post in our series on understanding hedge funds. Today, we will be discussing hedge fund “side pocket accounts.”

Generally, a side pocket is an account that is established by a hedge fund to segregate certain assets or investments from the fund’s general portfolio. Often, side pockets are used to hold less liquid securities such as real estate...

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Cumulative Voting

When you form a company, there are several key decisions that you need to make upfront to make sure you protect your interests and position your company for long-term success. Sorting out the voting system for electing directors is one of those key decisions. Today’s post highlights cumulative voting in director elections and why it might make sense for...

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Seattle Skyline from Queen Anne

As of this month, you can officially utilize crowdfunding to raise money in Washington for your startup. This new opportunity allows companies to advertise their securities offering and raise money from all investors. Traditional securities offerings restrict advertising and limit offerings to those who satisfy the income and net worth standards to qualify as an accredited investor. This new...

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Cage

Here’s an example of a commonly overlooked provision in a term sheet coming into play. Recently, news broke that there was a “loophole” in GoPro’s lockup provision, and the company’s shares subsequently tumbled almost 13%.

What is a lockup provision? A lockup provision is an agreement that the shareholders will not sell their shares for a specified period of time—often 180...

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Rent

Rent is so commonly understood that discussing the definition might seem like a waste of time. Rent, free rent, and additional rent are seemingly synonyms. The use of all three terms doesn’t appear at first glance to be particularly sensible: Why not just call “additional rent” “rent” and save the ink? And “free rent” seems like any oxymoron. But understanding...

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Calculator

The SEC recently release advisory committee recommendations for updates to the definition of “accredited investor,” other issues related to accredited investors, and recent updates to the securities laws. For years, there has been concern over the definition of accredited investor—specifically whether the financial thresholds are outdated—and whether changes to the definition would narrow the number of accredited investors, which...

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Trademark Dispute

What do beer, bocce and Bavarian singers have in common? Apparently a trademark dispute as of last month.

The famous Capitol Hill bar and restaurant Von Trapp’s was recently persuaded to change its name at the request of a member of the Trapp family of “Sound of Music” fame. The new name for the 10,000-square-foot space in Capitol Hill is Rhein...

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Registered Trademark

As we’ve discussed in previous posts, if you intend to build value behind any company trademark—for example, a name, slogan, or logo—then it is important to protect those trademarks. Filing for federal registration with U.S. Patent and Trademark Office (USPTO) is an important step to protect those trademarks. And when you file your trademark application with the USPTO, you...

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