Canadian Startup and Video Game Law Blog
Startup and video game law, from a Canadian and U.S. perspective
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SAFEs and the BC EBC Tax Credit
SAFEs (Simple Agreement for Future Equity) are used by early stage companies to raise investment without requiring the parties to determine the company’s value. Instead, future events determine the company’s value and prompt conversion of the SAFE into equity. As of March 2, 2019, SAFEs are now eligible for the British Columbia Eligible Business Corporation (EBC) tax...
Things Every Startup Should Know Before its First Financing
Startups often email me to assist with a financing expected to close a few days later. Eager to get the deal going, I ask about deal structure, such as type of investment, investor rights and size of round, only to learn that structure has yet to be determined and no firm commitments have been made by...
Priced Rounds
As part of our day-to-day practice, we advise clients on different structures available for early-stage financing rounds. As part of these discussions, convertible notes and SAFEs are inevitably raised by the founder yet the concept of a priced round is rarely raised and sometimes not even understood by the founder. Priced rounds were the common approach to...
Avoid Absolute Anti-Dilution Protection
Anti-dilution protections are frequently granted to investors and forgotten by founders until their friendly lawyer brings it up. In many cases, anti-dilution protections are reasonable but in other cases can impose a substantial burden on the company, even impacting the appeal of the company to future investors. Generally, anti-dilution protections protect an investor from the dilution...