Publications | Yair Udi

Regulatory Considerations for SAFEs: Compliance with Securities Laws and Tax Implications

May 16, 2023April 10, 2023 by Yair Udi

SAFEs (Simple Agreement for Future Equity) have become a popular form of startup financing due to their simplicity, flexibility, and low transaction costs. However, like any form of financing, SAFEs are subject to various regulatory considerations that startups and investors need to be aware of to ensure compliance with securities laws and regulations, and to … Read more Regulatory Considerations for SAFEs: Compliance with Securities Laws and Tax Implications

Using SAFEs vs. Priced Rounds: Understanding the Differences in Terms, Transaction Length, and Costs

May 3, 2023April 10, 2023 by Yair Udi

Startups looking to raise capital have several options available to them, including using a Simple Agreement for Future Equity (SAFE) or a priced round. Both SAFEs and priced rounds have their advantages and disadvantages, and startups must consider which option is best suited for their specific circumstances. In this article, we will explore the differences … Read more Using SAFEs vs. Priced Rounds: Understanding the Differences in Terms, Transaction Length, and Costs

RUSSIAN ROULETTE CLAUSE

July 16, 2023February 7, 2023 by Yair Udi

Companies bring together people with a similar vision and views on business, but it is not always easy for owners to make joint decisions. Sometimes shareholders can get stuck with different opinions. Fortunately, there are some mechanisms in company law to overcome it. These arrangements can be enshrined in companies’ statutory documents in the form … Read more RUSSIAN ROULETTE CLAUSE

MAKING A SECTION 83(B) ELECTION UNDER U.S. LAW

July 16, 2023January 25, 2023 by Yair Udi

In our previous publications, we have drawn attention to the idea of vesting of options and reverse vesting of stock, which means that the founders of a start-up can receive stocks that they do not completely own, because a company has the right to repurchase them (in reverse vesting); or employees get the right (option) … Read more MAKING A SECTION 83(B) ELECTION UNDER U.S. LAW

REVERSE VESTING: A MECHANISM THAT HELPS RETAINING FOUNDERS

July 16, 2023January 10, 2023 by Yair Udi

As we have already discussed in our previous publications, the process of raising investments to a company may require several important legal documents to be drafted and agreed upon, including an investment agreement, shareholders or investors rights agreement, bylaws and a revised articles of association or a certificate of incorporation of a company, depending on … Read more REVERSE VESTING: A MECHANISM THAT HELPS RETAINING FOUNDERS

LIQUIDATION PREFERENCES: WHAT INVESTORS CAN EXPECT IF A COMPANY IS SOLD

July 16, 2023January 2, 2023 by Yair Udi

New businesses, and especially startups, can be risky for financial investments. Of course, investments always involve risks, but the possibility of high profits, particularly in the case of an IPO or M&A transactions, still attract investors. There are many tools, however, to mitigate the risks, and if the transaction papers are carefully drafted with respect … Read more LIQUIDATION PREFERENCES: WHAT INVESTORS CAN EXPECT IF A COMPANY IS SOLD

COMMON RESTRICTIVE PROVISIONS IN AN INVESTMENT TRANSACTION

July 16, 2023December 27, 2022 by Yair Udi

Promoting investment in a business and raising funds for it can be a complex process that requires careful legalization. Organizing an investor’s contribution to a company can involve a number of legal papers. Investment documents include a set of contracts signed between the company and the new investor(s). They usually contain standard information about the … Read more COMMON RESTRICTIVE PROVISIONS IN AN INVESTMENT TRANSACTION

PROTECTING SHAREHOLDERS’ INTERESTS WITH A “TAG-ALONG” PROVISION

July 16, 2023December 19, 2022 by Yair Udi

INVESTMENT GUIDE SAFE v. Convertible Notes - The Key Differences

In the previous article, we got acquainted with the concept of “bring-along” (or “drag-along”) rights, and also found out that there is another way to protect shareholders – the so-called “tag-along” right. Now we’ll talk in detail about that concept, what it means and how it can be implemented in the shareholders’ agreement. As you … Read more PROTECTING SHAREHOLDERS’ INTERESTS WITH A “TAG-ALONG” PROVISION

PROTECTING SHAREHOLDERS’ INTERESTS WITH A “BRING-ALONG” PROVISION

July 16, 2023December 6, 2022 by Yair Udi

Building a business and creating a company is not only exciting, but also a very important process that requires careful planning when protecting shareholders’ interests. Founders must be sure that their rights are properly secured from the very beginning. That includes their right to quit. Of course, selling a stake in a business is not … Read more PROTECTING SHAREHOLDERS’ INTERESTS WITH A “BRING-ALONG” PROVISION

Drag Along Rights

July 16, 2023November 27, 2022 by Yair Udi

A “drag along” right is a contractual arrangement between shareholders of a company, specifying that if shareholders holding a majority interest of a company sell their shares, they can force the remaining shareholders to join them (in other words, to “drag” the minority along). In doing so, the majority shareholders will offer the same incentives … Read more Drag Along Rights

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