Mutual NDAs are better not just because they’re mutual but because the terms make more sense. I regularly recommend the Waypoint NDA to clients who need a basic NDA, meaning one that is intended to allow them to begin discussing a potential transaction quickly and cheaply while taking reasonable steps to protect the interests of…

The Two Stages of Diligence Here’s a quick summary from both sides: Mergers & Acquisitions. There are two stages in diligence: initial diligence, the purpose of which is to determine whether to make an offer and to set the price and terms for that offer; and full diligence. A buyer has one major goal in…

“Joint venture” is a sloppy term used to describe a number of different business operations. The important thing to remember is that it is too vague to be meaningful legally. A project that is called a joint venture might legitimately be structured like any of these: a brand new entity with shared ownership a subsidiary…

Here’s a common set of angel-investor questions regarding a standard seed round term sheet for a tech company: Why are the shares divided into preferred and common? Why does the preferred stock have a limited “1x” return? What will happen with liquidation preferences in future rounds? What will happen with dividends? Does the preferred stock…

Due diligence is the catchall phrase used to describe both the amorphous investigative process that prospective investors and acquirors go through before, during, and after their initial decision to proceed with a transaction with your company as well as the materials (paper, electronic, and Q&A) that they and their advisors receive in response to their…