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Deal Valuation

A Company’s valuation along with it various ways to protect “value” or control specific elements of a financing are frequently misunderstood. From pre-money to post-money, to simple or fully diluted, to Board terms and negative covenants, to change-of-control or sunset provisions, we hope to demystify the process of determining a valuation while at the same time helping place the appropriate emphasis on a specific valuation vs. the structuring trade-offs.

Our experts do this by capturing and sharing with management the current market dynamics, assessing the impact of today’s valuation versus the Company’s ability to raise future rounds of capital, and the inherent trade-offs between different financing sources. For whatever valuation needs may be, we possess the requisite experience and knowledge to help through the process.

Investor Identification

The venture capital community looks to us for innovative investment opportunities. We maintain strong contacts with leading investors at venture capital firms, specialized investment funds, and corporate/industry groups. We leverage our credibility with these investors to find the right partner in meeting our client’s goals.

Investor Engagement

The best preparation doesn’t help if it is not used skillfully in the negotiation process. The effective utilization of strengths and weaknesses and the knowledge of the needs of the parties are the key for success. Credere provides a wealth of experience and knowledge in both term sheets and venture capital negotiations.

A venture capitalist, once comfortable with the company and its plans, submits a term sheet—a summary of the proposed terms and conditions for a proposed investment. Normally, the term sheet isn’t binding. The term sheet is a serious show of interest by the venture capitalist and typically covers:

  • The proposed valuation that the venture capitalist places on the company
  • How much the venture capitalist proposes to invest in the company and for what percentage ownership in the company
  • The form of investment
  • The rights to participate on the company’s board
  • The rights to register the venture capitalist’s share in a public offering
  • The conditions to the investment (completion of due diligence, definitive agreements in form satisfactory to the venture capitalist, and so on)
  • How the money is to be used
  • The specific rights attributable to the security to be purchased (typically preferred stock).

Credere acts as the company’s advocate throughout the negotiation process.

Legal and Settlement

Credere has partnered with some of the top legal firms in the area of venture capital. These firms provide a broad range of legal services to start-up and emerging companies to meet their needs, from formation to liquidity.

They combine corporate, tax, securities and intellectual property legal expertise. They understand the needs of rapidly expanding commercial enterprises and provide timely and cost effective legal advice and availability when and where it is needed. Their services include:

  • Company formation, including selection of the most appropriate type of entity
  • Structuring of the business entities
  • Capital agreements and private placements
  • Founders agreements, employee incentive plans, employee benefits counsel and employment law compliance
  • Attendance at board meetings and related strategic advice and counseling
  • Angel financing, venture capital financing, equipment financing and joint development arrangements
  • Legal due diligence
  • Intellectual property due diligence
  • Drafting stock purchase agreements and other transaction documents
  • Issuing warrants, bridge notes and other convertible securities
  • Negotiation of the legal and business terms of the investment
  • Compliance with federal and state securities laws
  • Confidentiality and consulting arrangements
  • Joint venture and strategic partner structuring.