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Denver Business and Commercial Law Blog

Social media and venture capital

There are multiple financing options for entrepreneurs who have good business ideas. In addition to using their own funds, asking family members and friends to invest or trying to obtain a loan from a financial institution, they can attempt to obtain funds from venture capitalists. Startup entrepreneurs may be able to take advantage of social media to get the desired outcome when seeking venture capital.

Social media can be used to overcome some of the obstacles of obtaining traditional funding. In fact, the results of a recent study by the Wharton School of Business show that the ability to get funded and being active on social media are directly linked.

Discrimination, Experience and the ADA

The Americans With Disabilities Act (ADA) protects people from discrimination in the job market if they happen to have a disability. However, demonstrating this discrimination can sometimes be difficult. Since the ADA doesn’t require that employers give preference to people who have disabilities, how can you prove that’s the reason you were passed over for a job? A recent case in Denver shows how it can play out.

The most important thing startups have to look out for

Entrepreneurs starting a business from scratch have to juggle countless variables simultaneously, which is never an easy task. For instance, someone starting a business in Colorado has to worry about how to optimize their product or service, how to attract top-tier talent and how to market their business as best as possible.

It is worth bearing in mind that not all the variables are equally important; entrepreneurs occasionally overvalue some variables and undervalue others. A case in point is how some people can obsess over their mission statement, the logo of their business or the color of the paint on their office walls rather than focus on the quality of a product or service.

Company, former executive in noncompete dispute

When high-ranking executives walk away from a job in Colorado, they often are bound by noncompete agreements. These contracts attempt to prevent executives from taking trade secrets and other company knowledge to a competitor. One large biotechnology company, Omeros, is engaged in an ongoing legal dispute with its former chief business officer. The company alleges that the executive violated his agreement not to compete with it when he accepted a position with another corporation involved in the development of similar and potentially competitive drugs.

The company took the executive to court in May 2018 in an attempt to block him from taking his new job at the pharmaceutical firm. Omeros alleges that a treatment that the executive's new employer, EyePoint Pharmaceuticals, is working to develop is a competitor of Omeros's only drug on the market. The company alleges that the former employee will not be able to work for this firm without violating his noncompete agreement and that his value to the other company lies in his ability to recruit employees and customers from Omeros to EyePoint.

Why companies choose the reverse merger approach

A reverse merger may be a good idea for some Colorado companies that want to enter the public arena. This shorter and less expensive approach to going public is a popular alternative to the initial public offering approach. In the process, a company can hire an investment banking firm to oversee the underwriting process. The firm issues the shares for the company.

The bank plays multiple roles in the transaction. For example, it plays a pivotal role in generating interest in the stock, reviewing the transaction and overseeing the filing process. Banks also provide insight into the pricing of the stock to be issued.

Sony helps new companies through venture capital fund

Colorado entrepreneurs and others who are looking for venture capital may be able to get it from Sony. The conglomerate corporation has created a $100 million pool called the Sony Innovation Fund. This fund, which was created in 2016, has invested in roughly 25 early stage technology companies in the United States, Europe and Japan. On average, those companies have received millions of dollars each from the fund.

A fund executive said that as these companies grow, they could receive more money if the circumstances are right. The purpose of the fund is to help Sony learn about new technology and business models that could provide current and future benefits. For example, Sony is currently invested in a startup called Fotokite that can fly for hours without a pilot. Another startup it's funding called Shimmer allows musicians and fans to send messages directly to each other.

Puppet murder movie survives lawsuit from 'Sesame Street' makers

People in Colorado who grew up watching "Sesame Street" will get very different content from the upcoming R-rated movie "The Happytime Murders." Comedian Melissa McCarthy stars alongside puppets in the film directed by Brian Henson, son of famed puppeteer Jim Henson who created many well-known Muppet characters for the children's educational television show. Upset by the film's raunchy content, Sesame Workshop, which makes the children's show, sued the film's distributor for its use of the slogan "No Sesame. All Street."

A U.S. district judge ruled that the "Sesame Street" makers did not establish that the marketing message confused people familiar with the children's show. The absence of complaints from sponsors and parents further convinced the judge to allow the distributor to continue using the "Sesame" tagline. The judge accepted that the tagline was meant to differentiate the film's content from that produced for children.

Are you facing gender discrimination at work?

As a proud female, all you want is to be treated equally. All women should have the same rights as men. Unfortunately, women still face obstacles when it comes to discrimination at work. That glass ceiling is a reality for you. You are tired of being devalued in society.

You are not alone.

What to consider when selling a business

Like all big things that require intense preparation, selling a business can be a messy affair filled with intricate details. The process can also be quite emotional, especially for an entrepreneur who started a company from the ground up. Therefore, any business owner in Colorado planning to sell the fruits of their hard labor should take several factors into consideration.

Bearing that in mind, the factors can be broken down into two main categories: Some aspects pertain to the business itself while others relate to the business owner. Starting with the former category, the first thing that should be scrutinized is the business valuation, be it through precedent transaction analysis or discounted cash flow. Additionally, it is important to always question the timing of the sale; businesses are best sold when they are at their prime rather than when they are in a decline. Finally, owners need to be ready to answer numerous questions about their businesses, including how the valuation was performed, why the business is being sold and how sustainable the business will be.

How to align two IT entities

When there are two Colorado businesses being merged, separate IT entities have to be combined. From infrastructure to how resources are being utilized, all functions between the two entities must be properly aligned. The integration process should be approached with caution when dealing with reverse mergers or any transaction involving the sale of a business.

Business owners may learn that anything involving mergers and acquisitions comes with its own share of issues. The two entities don't always merge seamlessly or without conflict. Cost concerns and the pressure to quickly combine two sets of processes may motivate some companies to push forward speedily. In doing so, the transitioning process can be compromised. Careful planning and time minimizes the risks of onboarding and integration challenges that could hinder the transitioning process.