Comments on: What stockholder approval is necessary to complete a venture financing?

By: Venture Hacks — Control is a one way street

Venture Hacks — Control is a one way street — Mon, 02 Jun 2008 21:40:43 +0000

[...] In each round of financing, the number of investors who participate in protective provisions and class votes (also see here) goes up (or stays the same). That means you’ll have to ask more investors for [...]

By: Yokum

Yokum — Tue, 07 Aug 2007 21:37:43 +0000

Any California-incorporated company receiving venture financing will generally need to reincorporate to Delaware in connection with the financing. Thus, it is easier to incorporate in Delaware to begin with in order to avoid the hassle of reincorporating later. Reincorporation will require a review of the company’s contracts to make sure that the reincorporation doesn’t accidentally trigger termination or other provisions of the contracts. However, I recently completed an investor-side Series C financing of a California company where the investors did not require a reincorporation in connection with the financing.

By: Mark

Mark — Tue, 07 Aug 2007 21:08:06 +0000

From an entrepreneur’s point of view, California incorporation appears better because it gives common a meaningful vote. So why would a California entrepreneur want to incorporate in Delaware?

Thanks for all the great posts.