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Amazon & Ebay Weigh In On Online Sales Tax
Currently online retailers only have to collect state sales taxes if they have a physical presence in that state. If the retailer doesn’t collect the tax, it’s up to the purchaser to send the sales tax to the state. However, this rarely happens. Across the nation lost sales tax revenue from failure to collect online sales taxes is estimated at upwards of $23 billion.

There are a number of bills that have been introduced in Congress this year to create a national scheme for collecting state sales tax in online transactions (e.g., The Marketplace Fairness Act which is currently in the Senate). On Wednesday representatives from Amazon and Ebay testified before congress on…

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AT&T announced on Thanksgiving Day that it would be withdrawing its request to have the FCC approve a merger with fellow mobile-phone industry giant T-Mobile. This clearly signals AT&T’s pessimism over the outcome of the pending antitrust case filed back in August and its effect on the merger. AT&T also announced it will report a nearly $4 billion write-off for fourth quarter earnings to account for break-up fees if the merger does not pass through the antitrust case. What does this all mean for T-Mobile?

Since 2009, T-Mobile has seen a steady decline in customers, with net decreases of 24,000 during 2011 and 34,000 during 2010.  T-Mobile’s revenues are down 3.3% through the first three quarters of 2011, and Deutsche Telekom…

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An Overview
The Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law in August of 2010 included a requirement that publicly traded companies provide shareholders with a non-binding vote to approve executive compensation plans. These non-binding votes are commonly referred to as “say-on-pay” measures.

In accordance with Dodd-Frank, the SEC’s implementing rule, effective January 5, 2011, requires large corporations to provide their shareholders with non-binding resolutions to approve the compensation for named executive officers at least once every three years. Because the resolutions are non-binding, a vote rejecting executive compensation does not have any necessary consequence. However, failed say-on-pay measures get the attention of corporate boards, and recent studies demonstrate that the non-binding resolutions have practical consequences.

An Update – Causes…

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Pay to play provisions encourage investors to participate in subsequent rounds of investment. Such provisions provide incentive to continue investing by providing that if investors don’t participate in subsequent rounds proportionally to their investment, their preferred stock will automatically convert to common stock.

From an economics standpoint the pay to play provisions motivate investors to continue financial support by eliminating the liquidation preference that generally goes along with preferred stock. If an investor wants to keep their right to a 3X preference, they need to continue investing in the company. As one might expect, this can be a powerful incentive. Conversion from preferred to common stock would also eliminate an investor’s rights in any other benefits that came with preferred stock.

These…

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It’s Friday, so it’s time to continue our series on term sheets and take another look at an important provision in a financing term sheet. Today we’re discussing liquidation preference.

Liquidation preference terms only come into effect when there is a liquidation event. A liquidation event is usually defined as a merger, acquisition, or sale of substantially all company assets.

Preference and Participation
There are two components to a liquidation preference: preference and participation. Preference terms govern the taking of assets before other stock classes, participation terms instruct how the remaining assets are to be divided after the preference is allocated.

Preference
On the occurrence of a liquidation event, investors generally want to be ensured that they will receive at least their original investment. Investors…

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Intellectual property law is broken down into four main areas:patent, copyright, trademark, and trade secret.

Here’s a crash-course on each, and how we can help you protect all varieties of your intellectual property:

Patents

Under federal law, the categories of patentable inventions include: “any process, machine, manufacture, composition of matter, or improvement thereof.” A typical example of something that is patentable is an invention of a new technology. When Thomas Edison invented the light bulb, he patented it.

What rights do you get when you register a patent?

A patent grants the right to exclude others from making, using, selling, offering for sale, or importing the claimed invention for 20 years from the date the patent application was filed.

How can we help you with patents?

inVigor…

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On November 3rd, the House passed the Entrepreneur Access to Capital Act with overwhelming approval: 407-17. This Act would enable businesses to raise capital through crowd funding. Crowd funding is the contribution of small equity investments from many individuals.

Currently, federal and state laws governing the sales of securities restrict public solicitation of investors and limit fund-raising to sophisticated investors, or require a registration process that is cost-prohibitive for many entrepreneurs.

The Act restricts individual investments to $10,000 or ten percent of their annual income, whichever is lower. Businesses can raise up to $1 million dollars using this method without registering their securities unless they provide audited financial statements, in which case they can raise up to $2 million.

The Act includes a…

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An $8 million premoney valuation with a $3 million investment would result in the company owning 73% of the stock, and the investor owning 27% of the stock.

Price per share is one of the most important terms to nearly every entrepreneur. Price is inextricably tied with valuation. How much an investor will pay per share depends on the value the company is calculated to be worth.

An $8 million postmoney valuation with a $3 million investment would result in the company owning 62% of the stock, and the investor owning 38% of the stock.

Premoney valuation is the value of the company before the investors’ contributions are factored in. Postmoney valuation is the value of the company after the investors’…

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The iVLG Blog is starting a series on key term sheet provisions. Every Thursday we will discuss a new topic. First up: Price.

Within the context of angel investing and venture capital financing, you will often hear the phrase “term sheet” thrown around. A term sheet typically includes the conditions under which an angel investor or venture capital firm will finance a startup company. The term sheet outlines the material terms of a business agreement, but it is not a substitute for a proper agreement. Instead, it records the intentions of the parties to the transaction that will become a part of a future agreement. The term sheet is one of the first and most important documents that will help to define the relationship between investor and entrepreneur. Important term sheet provisions include: liquidation preference, participation, drag along agreements, antidilution, conversion, and many…

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In a recent Court of Appeals decision*, the honorable judge Laurel Siddoway reiterated the Supreme Court’s stance on applying the theory of promoter liability to post-dissolution corporate acts. This means, for purposes of individual liability, any acts occurring on behalf of the corporation after dissolution, whether voluntary or involuntary, must be made solely for the purposes of winding up the corporate affairs and business. A corporation’s key personnel may be held personally liable if they carry on any business that is not necessary to wind up and liquidate its business.

In Equipto Division Aurora Equipment Co. v. Yarmouth, the Supreme Court determined that RCW 23B.02.040 of the Washington Business Corporation Act applies to both prior corporation acts and post-dissolution transactions that…

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