seriesseed / equity Goto Github PK

Getting this intermittently when surfing to http://seriesseed.com:

From section 3.7 — "If other than an individual, Purchaser also represents it has not been organized for the purpose of acquiring the shares of Series Seed Preferred Stock."

It sounds like this precludes an accredited investor from forming an institution (ex. LLC) to invest in the company (by way of acquiring Preferred Stock). But surely that can't be the case. What does it really mean? And should it be reworded so as not to give that impression?

I don't know if the text will change much over time, but if you want meaningful diffs in the event of text changes, an idea that changed my life is semantic line breaks.

I worry that GitHub Flavored Markdown's literal interpretation of newlines might get in the way of that idea, though. :(

I see signs that @github wants to get better at handling document file types, though, so it's possible that GFM can be adapted to work for this. It would be so awesome to be able to use GitHub-style collaboration on legal documents!

The first sentence of Section 4.2 of the Investment Agreement provides that "If the Company issues securities in its next equity financing after the date hereof" - has anyone thought about whether a subsequent convertible note financing would trigger rights under this section? Would the issuance of securities upon the conversion of such notes trigger rights under this section? Is this section intended to include convertible note financings? As to that last question, I think not, and would propose clarification that future debt financings, whether or not convertible, would not trigger this section.

The protective provision restricting redemptions and repurchases in the Restated Certificate does not match the provision as stated in the Term Sheet.

The Series Seed Certificate is styles as a "Restated" Certificate but it is not just Restated. It is Amended and Restated. This should be reflected throughout the Certificate.

California Corporations Code affects Delaware corporations?

In accordance with Section 500 of the California Corporations Code, a distribution can be made without regard to any preferential dividends arrears amount (as defined in Section 500 of the California Corporations Code)

https://github.com/seriesseed/equity/blob/master/Series%20Seed%20-%20Restated%20Certificate%20of%20Incorporation.md

The link http://seriesseed.com at the top of your repo doesn't work. It looks like it should be changed to www.seriesseed.com or you need to update your DNS records.

You'll need some sort of 'how to fill out the Reg D form' document. The securities' regulation aspect of these documents would make me a touch nervous to use.

Line 63 of the term sheet indicates Full acceleration upon “Double Trigger.”.

Line 176 (2.2.3) of the investment agreement warrants:
Other than the Key Holders' Shares, which vest pursuant to the applicable Key Holders' Vesting Schedules, (x) all options granted and Common Stock outstanding vest as follows: twenty-five percent (25%) of the shares vest one (1) year following the vesting commencement date, with the remaining seventy-five percent (75%) vesting in equal installments over the next three (3) years and (y) no stock plan, stock purchase, stock option or other agreement or understanding between the Company and any holder of any equity securities or rights to purchase equity securities provides for acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the result of (i) termination of employment (whether actual or constructive), (ii) any merger, consolidated sale of stock or assets, change in control or any other transaction(s) by the Company, or (iii) the occurrence of any other event or combination of events.

It seems reasonable to assume that the vesting for the Key Holders would be similar to the vesting in the stock plan.

As I read it, subpart (y) states that there will be no acceleration, even double-trigger, anywhere.

Am I missing something?

While I think it's awesome that you've released (relatively) easy to use legal forms on GitHub, you might want to consider adding a license file (or appending a license to the README).

The current version of the Certificate of Incorporation states:

“Board Composition” means that for so long as at least 25% percent of the initially issued shares of Preferred Stock remain outstanding,...

As a practical matter, when is this not going to be the case? Conversion or redemption of the Series Seed Shares is not likely prior to an exit. Thus, even as the ownership of the Series Seed is diluted ever more by future rounds, this provision would not eliminate the separate Series Seed board seat (although that very well could be negotiated away).

Wouldn't it make more sense to base this provision not on the number of original Series Seed shares that are outstanding, but rather, on the amount of ownership that the Series Seed continues to represent? For example:

“Board Composition” means that for so long as the shares of Series Seed Preferred represent at least [__]% of the sum of (i) all shares of the Corporation's capital stock (on an as-converted basis) issued and outstanding, assuming exercise or conversion of all options, warrants and other convertible securities, and (ii) all shares of the Corporation's capital stock reserved and available for future grant under any equity incentive or similar plan, ...

I noticed that the Microsoft Word versions of these documents have room for improvement with respect to styling. Is it possible to crowdsource the Word files themselves, or are we only doing substantive text? Thanks!