Venture Capital firms (or VC’s) often invest in early-stage start-ups with uncertain valuations. The terms of a VC’s investment will often be heavily weighted in favour of the VC and may include downside protection. This means that the VC’s investment will be protected in the event that the valuation of your start-up decreases in subsequent financings. One common method used by VC’s for downside protection is known as a “ratchet” clause. A “ratchet” clause is an anti-dilution clause that works to protect, and in some circumstances can even increase, the VC’s proportionate ownership of your start-up, if the value of … Continue Reading
Stages of Financing
There are a number of issues start-ups need to consider to be able to effectively raise capital. Focusing your efforts on developing your products or services and establishing strong and efficient leadership are essential in preparing your start-up for the increased scrutiny of prospective investors. In addition, entrepreneurs often overlook or fail to appreciate how important it is to structure initial rounds of financing with later rounds (and more sophisticated investors) in mind.… Continue Reading
The Province of BC announced today the launch of a new BCTECH Strategy aimed at supporting growth in the tech sector, creating jobs and strengthening a diverse economy.
The first pillar of the comprehensive BCTECH Strategy is a focus on capital, including a $100 million venture fund announced today. The BC Tech Fund will provide access to more capital for BC’s entrepreneurs and technology start-ups, in particular at the early venture capital stage, enabling them to bridge the gap between seed and angel financing and later stage growth capital. … Continue Reading
McCarthy Tétrault LLP was delighted to recently host a sold-out crowd at our feature event as part of Vancouver Startup Week, a week-long celebration of Vancouver’s unique entrepreneurial spirit and innovative technology community.
“Prepare for Launch”, an interactive panel moderated by McCarthy Tétrault’s Genevieve Pinto, featured guests Eric Bukovinsky, Principal, Yaletown Venture Partners; Ryan Spong, Co-Founder & CEO, Foodee; and Spencer Thompson, Founder & CEO, Sokanu, among others.… Continue Reading
During the Tech M&A/Corporate Finance panel at McCarthy Tétrault’s second annual Toronto Technology Law Summit, Ian Palm shared the results of a study into trends and opportunities in the Canadian M&A market, including trends in deal volume, value, geographic origin, and sector. Four of the key takeaways from the study were:
- Canadian M&A activity in the technology sector, particularly in the mid-market, continues to be robust despite challenging economic times.
- The “nuclear winter” experienced in recent years by venture capital in Canada is showing signs that it is beginning to thaw.
- Cash rich tech companies are looking for ways to