The Text of New Section 4(a)(7)
If you are looking for the complete text of new Section 4(a)(7) of the Securities Act of 1933, as amended, I have quoted it in full below.
Startup Law
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Stock Options: Don't Forget Board Approval
If you are in the process of awarding stock options to employees or service providers, do not forget that you need (among other things) board approval of all stock option grants.
Deferred Salary: A Trap
Deferred salary or deferring salaries is an alluring trap in startup land. A company's runway gets shorter.
ISOs: Annual Tax Reporting Requirement
If your company has had employees exercise incentive stock options ("ISOs"), you are required to report certain information to the IRS and the optionee about the exercise.
Immediately Exercisable ISOs: The Problems
A lot of companies, including a large portion of Silicon Valley startups, grant new hires immediately exercisable ISOs (incentive stock options) with the expectation that many will exercise their...
The "Pre-Existing, Substantive Relationship"
The SEC recently issued guidance on what constitutes a "pre-existing, substantive relationship." The guidance is helpful for companies raising money for a number of reasons.