Helping clients become attractive for investors and joint venture partners.




Start-up, management and general business issues

The Capital Chase
Funding businesses

Business Transitions
Taking it to the next level

Lessons Learned
Avoid the trap of these horror stories

Entrepreneurship case studies

Partner Agreements Bring Stability

Two business partners were negotiating their future relationship in connection with the start-up of a technology company. One partner was bringing the technological expertise, the other financial assets and managerial expertise, each thought the assets they were bringing was more valuable than the other's.

Critical Problems

The founding partners were all “jockeying” for control, which was preventing the company from moving forward.


We helped the founding partners develop a relationship with each other that both of them were satisfied with. We created a contract between the partners where each person was permitted to nominate a specific number of directors.

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Breaking Into the Fashion Industry – Protecting Your Brand

Winner of a nationally televised fashion contest was starting his own apparel line, and a national not-for-profit public interest group offered a large grant to the designer in exchange for exclusive sponsorship rights to his first fashion show.

Critical Problems

Entrepreneur couldn’t get the public interest group to focus on negotiating the final terms and conditions of the grant, which delayed funding. The designer was relying on the funds to pay the registration fees for Spring Collection shows for New York Fashion Week (there are only two shows per year, and if you miss the deadline for the Spring shows, your business plans will be on hold for six months).


We maintained regular contact with the public interest group so they did not lose momentum or focus on the transaction, without alienating the group’s staffers or being too “pushy”. The designer had been negotiating for months prior to getting us involved, to no avail. Within one week of getting involved, we got the designer a signed contract and a check.

Because the public interest group was giving the money away as a grant, the designer’s ability to negotiate favorable terms was limited, particularly with respect to his commitments to make public appearances as a spokesman for the group. Despite negotiating from a place of weakness, we obtained favorable terms for the designer that protected his brand and intellectual property, and limited his commitments to ongoing events.
The group was very intent on making sure the fashion show during New York Fashion Week was “in the tents” in Bryant Park (Fashion Week’s major venue). However, each week the group delayed funding, the more difficult it became for the designer to obtain a slot in the tents. Neither the designer, nor the Group were aware that the Fashion Week organizers have venues in addition to the “tents” that are still a part of New York Fashion Week, and that major designers often opt for these alternative venues rather than the tents. Securing a slot in the tents was questionable, but securing a slot in one of the alternative venues was a certainty. We were able to convince the Group to make the grant to the designer as long as the fashion show was held at any New York Fashion Week official venue, whether in the tents or an alternative venue.

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Creative Alternatives to Salary Caps

Medical doctor retained us to review an employment contract for a job offer he was contemplating as a department head of a medical school. The position required relocation from the Southern part of the U.S. to the San Francisco Bay Area.

Critical Problems

The new position had a modest pay increase, but a title and responsibilities that were a significant promotion from his current job. However, when factoring the higher cost of living associated with residing in California, the client would have made less money than if he stayed in his current position. To complicate matters, the school had a lock-step pay scale and would not negotiate a higher salary.


We were able to negotiate a creative solution to the pay problem where the school could claim the salary portion of the compensation was in-line with its rules regarding compensation, and we obtained an expense differential that offset the increase in state income tax and higher cost of housing. For a modest investment of less than $2,000 in legal fees, we secured over $60,000/year in additional compensation for our client.

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Overlooked Compensation

Proprietor of medical clinic utilizing a special piece of equipment for rehabilitation of back injuries. He developed a proprietary system for running the business on a cash-for-services model (as opposed to taking insurance policies).

Critical Problems

The manufacturer of the equipment our client used in his business made an offer to our client to be the exclusive marketing service provider for a national franchise they were developing, provided he let the manufacturer use his proprietary model. However, once he disclosed the model to the manufacturer, they could cut him out of the deal. He had one shot to negotiate the best deal possible.


We helped our client retain the intellectual property rights to the proprietary marketing system, and license it to the manufacturing company and its franchisees. In this case, if the manufacturing company breached its agreements with our client, he could withdraw the license. Additionally, we helped our client negotiate for an option to purchase a considerable amount of stock options in the franchisor (which our client never thought of) so if the manufacturer was successful in executing a lucrative exit event, like an IPO or asset sale, our client would share in the windfall. Without our help, our client would have potentially left a multi-million dollar opportunity “on the table".

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The Capital Chase case studies

Funding A Technology Start-Up

Three scientists formed a medical device company to develop a minimally invasive tool to detect breast cancer using laser technology invented at, and patented by, a preeminent national lab.

Critical Problems

The new technology was at least four years away from receiving the government approvals required to sell the device. The company required seed capital to pay for clinical testing and product development.


We introduced the clients to an investor who raised over $2 million, enabling the company to complete a 200 patient clinical feasibility study and assisted the company in structuring and executing three rounds of private placement securities offerings.

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Protecting Your Revenue Stream Following a Merger

Chief technology officer, co-founder and 50% owner of a successful website that promoted nightclubs and his partner were planning to merge the business with a company that provided web-based marketing and promotion services for well-known consumer products, including national beverage manufacturers.

Critical Problems

The owners of the other business were very interested in merging their company with that of our client, and while the prospects for financial success were significant, a condition of the deal was that our client would have to give up a controlling interest in the new entity after the deal was closed. Because the owners of the other business wanted to secure the deal badly, he was negotiating from a position of strength before the deal closed, but would be able to make very little change once the deal closed. Our client was interested in pursuing the deal, because he believed in the upside potential, but he needed to be absolutely sure his interests were protected and he was getting the best deal before he agreed to consummate the merger.


We helped our client negotiate a very strong employment agreement that imposed penalties that would be very costly to the new management if they tried to squeeze our client out of the business or change his role as chief technology officer. Additionally, we negotiated that, while our client would not have a role on the company’s board of directors, the board could not make any changes to the company’s operating agreement that would adversely affect my client’s equity position in the company without first obtaining his prior written consent. We also obtained a preferred distribution for our client equal to a significant percentage of the gross revenues of the club promotion business line. The distribution percentages would be scaled back over a period of seven years—the theory being his distributed profits from the new business as a whole would make up the difference in profits from the club promotion business. This arrangement was also a way for our client to give up managerial control with the confidence that new management would run the business efficiently, since management would only be paid from net profits. If management ran up expenses irresponsibly, they didn’t make any money, but our client still got paid regardless. Additionally, we obtained for our client the right of first refusal to purchase the club promotion business line in the event that they ever wanted to liquidate it, and also upon the company’s demise.

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Business Transitions case studies

Thinking Big – The Groundwork for Future Funding

Management of a medical device company was setting the stage to raise multiple rounds of financing to fund a pilot study and clinical trials for their product. They did not want anything to prevent them from raising subsequent rounds of capital--but experienced a bumpy road along the way.

Critical Problems

Management required core organizational contracts and documents that conform to institutional standards, thus not preventing access to more sophisticated funding sources in the future (i.e., VCs, institutional investors).


We helped management identify what foundational agreements were necessary not only now, but to protect assets moving forward into the future, including employment contracts, stock option plans and option grant agreements, consulting contracts and assignment of inventions agreements.

Part of the company’s strategy
was to license patented technology from a pre-eminent national laboratory. The government officials responsible for licensing were inflexible about terms, and the process of negotiating the deal was “bureaucratic” (to put it politely).
We helped negotiate the most
favorable terms possible, but more importantly, we gently “pushed” our contacts at the lab to maintain the momentum the company needed to get the license finalized.
Breakdown: One member of
management made some
technical mistakes while offering
securities in a private offering.
Regulators became aware of the
mistakes, and a number state
investigations were commenced, which threatened to derail the company.
We helped keep the company
“on track” through the investigations. We devised a long-term strategy for the company to resolve the investigations, correct any mistakes, and move the company forward. This included advising the board through a proxy context so they could remove the rogue director from the company’s board, acting as a liaison between the company and the regulators - so management could focus on building the company, and negotiating favorable settlements with state regulators, often obtaining significant reductions
(up to 80%) in fines originally
contemplated by regulators.

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Creative Solutions for Going Public

Owner of a financial content and public relations website wanted to purchase a publicly traded shell company to merge his operating company into, in order to take advantage of certain funding strategies.

Critical Problems

Our client was having a difficult time finding a publicly traded shell company that was within his budget that did not have potential regulatory problems.


Our client had a limited amount of cash, but had some time on his hands. In lieu of purchasing a shell company, we helped him execute a direct public offering. Using this strategy, our client filed a registration statement with the SEC, and sold securities in a “friends and family” public offering. Once he sold shares to a sufficient number of investors, we introduced our client to a market maker who filed a listing application to get the stock traded on the NASDs over-the-counter bulletin board. It took nine months from start to finish to complete the transaction (which is three to four months longer than the process of buying the shell) but, at the end of the day, our client had a publicly traded company in which he owned a greater percentage than he would have had he purchased the shell company, without the “skeletons in the closet” that a shell company often has. Also, the legal costs for executing the DPO were approximately the same as if he purchased the shell, but he didn’t have to fork over any additional cash that would have been required to purchase the shell.

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Avoiding Unnecessary Legal Services

We helped a client start a wine wholesale distribution business. A year later business was booming, and our client was thinking about taking on a partner to handle the growth.

Critical Problems

Our client was feeling the pressure of her business’ growth, and wanted to secure the partner as soon as possible. She came to talk to me about what kind of legal documents she would need.


Having been in the position of feeling out of control by your business’ growth, I really identified with my client’s problem. But I also recognized that my client was making a material decision (taking on a new partner) while she was in reactive mode, which is not a position of strength. We spent over an hour really thinking about what value the partner was going to add to the business in relation to what my client was giving up. What we discovered was that what she really needed was a solution for storing the wine she was purchasing that was more cost-effective than what she was doing now—a service she could pay for without giving up an equity position in her company. While it would have been very lucrative for me to negotiate and draft the agreements she would have needed to form the partnership, the partnership was not in my client’s best interest. She ultimately decided to pass on the business partner, and she was so thankful for me talking her out of a potentially bad situation, that she ended up sending me a referral to someone else for whom a taking on a business partner was a necessary and prudent decision.

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Lessons Learned case studies

Forced Out of $1.5 Million Business By Greedy Partners

Greedy partners forced one client out of his business once the business became profitable. The client did not seek the advice of counsel prior to starting the business and never entered into a written agreement with his partners. The client ultimately had to sue his partners. The litigation is still pending six months later.

Cost of a basic contract with his partners:

Approximately $2,500

Cost of not doing it right from the beginning:

$25,000 in litigation costs;
$250,000 in lost equity;

Stress in his personal life due to fighting with partners, litigation, and having to find a new job… incalculable.

The Right Way to Do It: We would have made sure that our client had an iron-clad partnership agreement signed before he left his job to work in the start-up.

How we helped: We negotiated a favorable buyout settlement that was several hundred thousand dollars more, and on better payout terms, than what his partners initially offered him. We had to resort to litigation, however, to force their hand.

Lost $1,000,000 of Angel Financing

To “save money” on legal fees, one of our clients failed to consult with an attorney while raising the initial capital for his business. The client sold shares of his company’s common stock without first increasing the company’s authorized shares, essentially, selling stock that didn’t exist--which is fraud. The client was close to closing a critical financing with an angel investor that was worth up to $1 million in funding. When the investor discovered the problem, he got cold feet and took the offer off the table.

Cost to amend the company’s certificate of incorporation, including legal fees:


Cost of not doing it right from the beginning:

$1,000,000 in lost funding;
$10,000 to make a rescission offer to remedy the problem;

The anxiety of not closing critical funding and scrambling to keep the company’s doors open…incalculable.

$45,000 Personal Debt to Vendor

The owner of a distribution business organized his business as a sole proprietorship. He purchased $45,000 in supplies from a vendor and, when the business took a turn for the worst, he was unable to pay the debt. The vendor obtained a personal judgment against the business owner, which prevented him from refinancing his home, obtaining additional credit, and jeopardized his ability to obtain a job. If the client had organized his business as a corporation, the vendor would never have been able to seek payment from the business owners’ personal assets.

Cost to incorporate a business, plus legal fees:


Cost of not doing it right from the beginning:


The stress of potentially losing your home because you made a legal mistake that could have been easily avoided…incalculable.


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