Putting a valuation on an early-stage company can be difficult, particularly when the company is pre-revenue and still developing its product or technology.  Nevertheless, because most early-stage investment (known as “seed” funding) is in the form of equity, the issue has to be addressed.  The company’s founders and the potential investors then go through an awkward dance where management says the company is worth X and the seed-investors say the company is worth Y (a number you can be sure is much less than X).  The parties will either come to an agreement or they won’t.  The worst situation is where an agreement is reached but one side (almost always the founders) feels that they’ve been taken advantage of.  This …read more

Stanford professor and copyright icon Larry Lessig appeared on Charlie Rose recently.  The interview can be viewed here.  In my law school days, I was lucky enough to be involved in a lecture Lessig gave to the student body in which he emphasized the need for balance in copyright law policy.  A copy of that lecture can be found here.  He’s still delivering the same message.  In the Rose interview, Lessig speaks out against the abolitionist movement growing against copyright.

Money quote:

My real fear is that the last ten years have unleashed a kind of revolutionary attitude among the generation that will take over in ten years.  And it will be hard for them to distinguish between …read more

A corporate client used a corporate redemption to acquire 83% of the stock of its founder, who was no longer qualified to own a Disadvantaged …read more

A client recently sent me this article about the family of the late Rev. Martin Luther King Jr. (MLK) “demanding a share of the proceeds from the sudden wave of T-shirts, posters and other merchandise depicting the civil rights leader alongside Barack Obama.”  The family is asserting MLK’s right of publicity (i.e., the right to control and commercially exploit his name and image for profit), which passed to his heirs after his death.  While it is not at all unusual for the heirs of a deceased celebrity to police unauthorized commercial exploitation of the celebrity’s name and image, this paragraph from the article struck me as slightly off the mark:

“King’s writings, likeness and voice are considered intellectual property, …read more

The so-called “notice-and-takedown” procedure in the Digital Millennium Copyright Act of 1998 (the “DMCA”) – previously referenced here – provides copyright holders with the means to …read more