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Lifecycle of a Technology Company : Step-by-Step Legal Background and Practical Guide from Startup to Sale



Lifecycle of a Technology Company : Step-by-Step Legal Background and Practical Guide from Startup to Sale

Edwin L. Miller Jr.

ISBN: 978-0-470-22392-5 January 2008 320 Pages


Praise for Lifecycle of a Technology Company

"Lifecycle of a Technology Company is a comprehensive business and legal handbook for all but the most experienced technology entrepreneurs. I shared my copy with a few colleagues at MIT who have either started or are contemplating launching their own companies, and I had a real problem retrieving it. The data supports my opinion that this book will attain 'handbook' status on the desks of technology entrepreneurs."
-Dr. George B. Kenney, Associate Director Materials Processing & Microphotonics Centers at MIT

"This book will help entrepreneurs avoid the pitfalls on the long road to success for venture-backed technology companies. It distills a lifetime of experience in advising technology companies in a concise and understandable way."
-Howard Berke, Serial Entrepreneur and Venture Capitalist

"Lifecycle of a Technology Company provides a valuable resource for lawyers at a variety of experience levels. The junior lawyer will use this resource for the basics. More experienced lawyers with a broad practice will use this for a 'sanity check' relative to market terms and business rationale. In the trenches, it will assist lawyers by providing practical, plain speaking explanations for why things operate as they do in the finance, intellectual property, and merger & acquisition segments of the technology world. If you expect to represent technology clients, keep this book nearby."
-James O'Hare, Partner Kirkpatrick & Lockhart Preston Gates Ellis, Boston

Preface ix

Acknowledgments xi

About the Web Site xiii

CHAPTER 1 Start-Up Phase 1

Founders’ Contractual Arrangements and Mechanics of the Incorporation Process 1

Choice of Entity 31

Stock Option Plans and Other Equity Compensation Arrangements 37

Employment Agreements 49

Appendices 55

CHAPTER 2 Financing the Venture 57

Venture Capital Financings 57

Basics of Debt Financing 90

Brief Introduction to the Structure and Operation of Venture Capital and Buyout Funds 98

Appendices 103

CHAPTER 3 Intellectual Property Protection 105

Basics of Intellectual Property Protection 105

License Agreements 121

Technology Licensing: Advanced Topics 140

Appendices 179

CHAPTER 4 Private Placements, Initial Public Offerings, and Public Company Regulation 181

Basics of Securities Regulation for Private

Companies 181

Initial Public Offerings 195

Public Company Regulation 206

Appendices 247

CHAPTER 5 Acquisitions 249

Mergers and Acquisitions: Structuring

Considerations 249

Overview of an Acquisition Agreement 260

Advanced Topics 270

Appendices 292

Index 293