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Incorporation

Key Considerations When Deciding Where To Incorporate

How To Incorporate a Delaware C Corp Through Clerky?

Form Of SOSV Program Investments

How are SOSV Program Investments Made?

What Is A SAFE?

What Does Post-Money Mean?

How Does a Post-Money Fixed Percentage SAFE Convert to Equity?

Structure of the SOSV Program Investment

Structure of the SOSV Program Investment

Cash SAFE

Program SAFE

Additional Cash SAFE

Cash SAFE

Cash Amount

Conversion – Valuation Cap Or Discount?

What Events Trigger Conversion of Investment to Equity?

What is an Equity Financing?

What Calculation is Used to Determine the Number of Shares Issuable to the Investor Upon Conversion of the Cash SAFE?

What is an Optional Conversion?

What is a Liquidity Event?

What is a Dissolution Event?

What is a Review Conversion

What is a Pro Rata Right?

What is a Most Favored Nations Clause?

What Is an Employee Share Option Plan (ESOP) or Unissued Option Pool?

Can the Cash SAFE be Assigned?

Program SAFE

Program Amount

Conversion to a Fixed Percentage

What Events Trigger Conversion of Investment to Equity?

What is an Equity Financing?

What Calculation Is Used to Determine the Number of Shares Issuable to the Investor Upon Conversion of the Program SAFE?

What is an Optional Conversion?

What is a Dissolution Event?

What is a Liquidity Event?

What is a Review Conversion?

What is a Pro Rata Right?

What is an Employee Share Option Plan (ESOP) or Unissued Option Pool?

What Representations and Warranties are Given with Respect to the Company’s Intellectual Property?

What are SOSV’s Vesting Requirements?

What is a Most Favored Nations Clause?

What is a Put Right?

The Put Right states that at SOSV’s discretion and upon conversion or ownership of shares in the Company, SOSV may choose to sell back its equity holding to the Founders of the Company for the nominal amount of $1. There is no onus on the Company to repay the full investment amount to SOSV. However in order to transfer the shares back to the Founders a nominal payment must be made. The $1 is simply a nominal payment or consideration for this transaction.

It is an unfortunate reality that many companies in which SOSV invests will not go on to secure tangible future value. They will either dissolve or will just become stagnant with no further financing progression since SOSV’s initial investment. Of course, this risk is mitigated greatly by the value added to the Company over the course of the Program.

What is an Observer Right?

What are Information Rights?

What is the Major Investor Designation Clause?

What is a Pre Conversion Pro Rata Right?

What is a First Financing Right?

What is the Investor Consent Matters Clause?

What are the Program Participation Requirements?

What Happens if a Participant is Removed From the Program?

What Does the Exit Endeavour Clause Mean?

Can the Program SAFE be Assigned?

Optional Additional Cash SAFE

What is an Additional Cash SAFE?