This Week in Startups
Jason Calacanis covers startups, tech, markets, media, and all the hottest topics in business and technology. He also interviews the world’s greatest founders, operators, investors, and innovators.
Navigating Challenges in Distressed Companies w/ Becki DeGraw | Wilson Sonsini Startup Legal Basics
Wilson Sonsini Partner Becki DeGraw joins Jason on the latest edition of Startup Legal Basics! In this episode, they break down challenges in distressed companies, pay-to-play scenarios, the importance of a market check in financing, and high-profile legal and ethical issues.
Key Points
- VCs often leave the board of distressed companies to minimize liability and because they have already written off their investment. Pay-to-play financing is a last-ditch effort where existing investors are forced to participate or face penalties, but it rarely results in a successful turnaround. Proper documentation and a rigorous process during financing rounds are crucial for legal protection and mitigating potential stockholder lawsuits.
Chapters
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Transcript
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