Below is a recap of recent posts to the Stradley Ronon Business Vantage Point blog. Articles on timely topics impacting ownership, operation and financing of businesses across industries written by our trusted advisers are posted regularly on the site. If you haven’t yet subscribed, please click here to ensure you don’t miss any upcoming articles.
IN THE SEPTEMBER ISSUE:
The Importance of Separating Community Benefits From Market Needs
The search for value often requires turning over a lot of stones and thinking creatively about structures and capital. In the search, an entrepreneur or investor often comes across an array of tax-exempt entities and considers whether they might be untapped potential resources. Whether it’s a new business idea that might fill a social need or a valuable opportunity to associate with a trusted brand, the nonprofit sector can present appealing options, even while investors lack an understanding of the real limitations of these entities. Read More...
Delaware Court Rules That a Buyer May Terminate a Merger Agreement Based on the Breach of a Capitalization Representation
In a decision rendered on May 29, 2023, the Delaware Court of Chancery, in the case HControl Holdings LLC et al. v. Antin Infrastructure Partners S.A.S. and OTI Parent LLC, enforced a buyer’s right to terminate a merger agreement on the basis that certain representations made by the sellers in the merger agreement concerning the target companies’ capitalization were not true and correct in all respects. Read More...
Data: The New Currency In Carve-Out Transactions
In the current market conditions, carve-out transactions are becoming increasingly common as companies look to divest noncore businesses and assets in order to restructure and focus on their core operations. This is due to many factors, including the need to improve profitability, reduce debt and focus on innovation. In these transactions, a portion of a company is sold to a buyer while the remaining portion continues to be held by the seller. Read More...
Venture Debt and Its Impact on the Growth Equity Market in 2023
With 2023 off to a rocky start for entrepreneurs and startups due to rising interest rates, inflationary pressures and the collapse of highly recognized banks for venture-backed companies – such as Silicon Valley Bank (SVB), Signature Bank and other financial institutions with a greater appetite to do business with these types of riskier companies – the market saw both a pullback by venture capital firms, limiting follow-on equity rounds for the weaker companies in their portfolio as well as a sharp decline in the availability of venture debt. The simultaneous pullback in both the equity and debt markets for these early- and growth-stage companies has left many of these companies in a precarious position, focused on capital preservation and, in some cases, survival, with many ending up in a fire sale or shutdown mode. Read More...
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