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
There are a variety of business organizations that can be used to operate your tech start-up in Canada. Although many businesses are operated through a corporation, it is important to understand other forms of business organizations. As there are significant tax, legal, financial and practical implications, selecting the right business organization for optimizing your business’s chance for success. The following are three of the most commonly utilized business organizational structures for a start-up business in Canada.… 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
We recently had the pleasure of attending the Money20/20 fintech conference in Las Vegas. It was an immersive and incredibly informative event, featuring speakers and thought leaders from many of the major U.S. and Canadian financial institutions, fintech innovators, major retailers, e-commerce and social media platforms and investors. Money20/20 is described as the largest global event focused on payments and financial services innovation for connected commerce at the intersection of mobile, retail, marketing services, data and technology.… 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
Companies in early and growth stages often need significant funding to achieve their business goals but can have difficulties finding potential investors. Until recently, Canadian regulatory rules prohibited companies in Canada from raising financing by issuing shares and other securities to the general public unless they either (i) filed a qualifying prospectus; or (ii) relied on an exemption from the requirement to file a prospectus under securities laws, which limited the pool of potential investors to people such as friends & family, business associates and accredited investors.
Recently, certain Canadian Securities Administrators introduced a new prospectus exemption, known as the … Continue Reading