IN FUNDRAISING By Einat Katzenell, Adv. www.kdlaw.co.il Focused - PowerPoint PPT Presentation

BASIC TERMS IN FUNDRAISING By Einat Katzenell, Adv. www.kdlaw.co.il

Focused on Getting the deal done. KatzenellDimant is a multidisciplinary commercial and corporate law firm, widely regarded as one of the best boutiques in Israel in all areas we practice, and consistently ranked among Israel ’ s leading law firms for the scale and quality of our work.

Different ways to Fund INVESTORS (VCs, angels, others) [$ for shares] LENDERS IIA COMPANY (debt / convertible loans) (OCS grants) OTHER (crowdfunding, ICO) * We will focus on the first.

Customary Funding Process CONDITIONS TERMSHEET SIGNING DUE DILIGENCE TO CLOSING NON-BINDING INITIAL CLOSING DISCUSSIONS WITH INVESTORS WORK ON DEFINITIVE AGREEMENTS

Structure of a Financing Agreement (Share Purchase Agreement) 1 Transaction Description Investment amount, PPS, option pool, warrants? 2 Closing Conditions & Procedures 3 Representations & Warranties by the company. 4 Representations & Warranties by the investors. 5 Other covenants Reservation of option pool, use of proceeds , due diligence “ clean ups ” etc. 6 Miscellaneous

Cash & Share Capital Basic Terms 1 Valuation 2 Option pool 3 Price per Share 4 Investment amount One closing or in installments

Preferential Rights 1 st Tier – economical value 1 Liquidation Preference 2 Anti – Dilution protection 3 Dividend Preference 4 Veto rights Protective provisions (a.k.a. restrictive provisions)

Preferential Rights 2 nd Tier – “ status quo ” rights 5 Preemption rights 6 Right of first refusal 7 Co-sale 8 Bring along 9 Information & Visitation rights

Preferential Rights 3 rd Tier – Protection of Assets 10 Assignment of IP by all involved 11 Non-compete provisions (etc.) 12 Open source – clean up 13 Maintenance of the Founders

Founders Provisions Provisions relating personally to founders 1 No Sale 2 Repurchase / Reverse Vesting 3 Rights to appoint a director / observer? 4 Representation and warranties

QUESTIONS?

THANK YOU