From the editor:
For technology companies seeking
investment capital, the new SEC regulations
on crowdfunding that went into effect on May
16, 2016 present new funding options by
expanding the pool of investors beyond the
traditional funding sources comprised of venture capital rms
and angel investors. The new regulations permit the general
public, including non-accredited investors, to use on-line
crowdfunding platforms to invest in private companies. In
addition, California has adopted new exemptions for nders in
securities transactions, which may make it easier for early-stage
companies to locate potential investors with the assistance of
nders. Another signicant development this year is the Defend
Trade Secrets Act, which was signed into law on May 11, 2016,
creating a federal cause of action for private entities to combat
the misappropriation of trade secrets. A summary of these topics
is included in this newsletter, along with other topics we hope
you will nd helpful.
Although venture capital rms and angel investors will continue
to be an important resource for funding technology start-ups,
total venture dollars deployed for start-ups in the rst quarter
of 2016 remained at. Total deal count was down around
5% compared with the fourth quarter of 2015, and down by
around 11% when compared to the rst quarter of 2015. The
competition is only getting stiffer for investor dollars, so giving
a killer investor pitch is critical. In addition to building trust and
connecting on a personal level with potential venture capital
rms and angel investors, consider the following 10 Tips For
Presenting to Investors:
1. Describe the problem and the opportunity by stating your
compelling business idea in concise and convincing terms
focusing on the market opportunity and your ability to create
revenues and margins.
2. Articulate your solution to the problem.
3. Present a factual current status of the market, and focus on
target customers with a willingness to pay for your product
or service.
4. Share who has agreed to pay for the product or service by
presenting specic customers who have provided credible
evidence of willingness to make the purchase.
5. Describe the distribution channels for accessing customers.
6. Describe tangible major milestones that will be hit quickly
that prove the proposition and indicate that you can address
the market, allowing for a big-step-up in value.
7. Prepare impressive and interesting proles of top team
members with quick bullet points about their relevant past.
8. Present a chart outlining nancial projections focusing on
the last two quarters, the next two quarters and the next
three years, and reecting key metrics such as number
of customers, revenue, product costs, gross margins, big
expense lines, net income and cash ow.
9. Create a matrix of the competition with the variables that
matter. Be specic about the top two or three competitors,
and describe why you think you can beat them.
10. Outline a history of your achievements to date, and explain
why your project ts into the strategies and investment
portfolio of the investor’s existing portfolio of companies.
To grab the attention of investors you need to tell a succinct
and compelling story. Know your material and avoid reading
the slide deck so you can present a sense of calm and control.
Be prepared to be interrupted when presenting, be ready to
answer questions directly, don’t linger on the obvious, and stay
out of the weeds when responding to questions. Above all, bring
along your “passion” for your business to the pitch and artfully
articulate your vision for your company.
Please feel free to pass our newsletter along to anyone who
may be interested in the subject matter. We welcome you to
reach out to our talented team of professionals should you have
any questions or desire further input on any of the topics we
have covered.
Vicki Dallas
Chair of the Firm’s Technology Industry Group
949.224.6438 or vdallas@buchalter.com
Page 2: Crowdfunding Update: Crowdfunding
Regulations Are Now Effective!
Page 2: New Exemptions for Finders in
Securities Transactions
Page 4: Defend Trade Secrets Act (DTSA)
Signed Into Law
Page 5: Congressional Stalemate Persists
over Air Trafc Control Privatization as FAA
Reauthorization Deadline Approaches
Page 5: Website Design Can Affect the
Enforceability of Terms of Use
Page 7: Keep Your Exposure To Real Estate
Low—Sublease
Page 8: Including Trade Secrets in a Patent
Application: Strategies and Caveats
in this issue
June 2016
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