Category Archives: Uncategorized

Preccelerator Alumni UNOMI Accepted into Backstage Capital’s Accelerator

Congratulations to Preccelerator alumni company UNOMI, a SaaS for animators and video game developers, for being accepted into the first class of Backstage Capital’s Accelerator program. Backstage Accelerator is a 3-month program designed to give underrepresented founders the support they need to reach their next critical milestone.

To view the entire cohort and learn more about their program, visit here.

About UNOMI
UNOMI leverages advanced, patent-pending voice recognition and motion capture technology that automates a lot of the most time-consuming aspects of animation production. Their voice recognition software understands human speech in multiple languages. This allows animators to easily create the speech of multiple 2D and 3D animated characters and for some, UNOMI gives them the ability to create content on a daily basis. UNOMI’s motion capture software will give content creators the ability to easily track human movement within their home or studio, which will eliminate the need to rent expensive motion capture studio space and equipment. Large-scale animation studios will be able to drastically reduce costs allowing them to create more content in a significantly shorter amount of time. UNOMI will also be releasing an Augmented Reality and VR, 3D object plugin for Adobe software which will allow users to easily implement and animate 3D objects quickly and easily.

For more information about the Preccelerator, contact Heidi Hubbeling at hhubbeling@stubbsalderton.com

Preccelerator Alumni Company Napkin Finance Partners with UBS

napkin financePreccelerator alumni company Napkin Finance announced this week their new partnership with UBS Equity Plan Advisory Services (EPAS) to provide financial literacy content for investments.

“Collaborating with UBS to bring their vision to life was a great opportunity for us. We appreciated the chance to further our mission of explaining financial concepts in a unique and simple way, and empowering people to take charge of their finances,” said Tina Hay, Founder of Napkin Finance®.

To read the full press release from UBS visit here.

About Napkin Finance
Napkin Finance is a multimedia company that grew out of their own needs for a better way to learn and understand finance. They developed their platform as a quick and easy resource for everything you need to know about money in 30 seconds or less. Their mission is to empower readers to manage their money and understand basic financial concepts in a simple, fun and engaging way. In addition to Napkins, they have grown into a wide range of products and features including:  Videos, Life Events, NapkinGrams, and a Glossary of Terms. Most importantly, Napkin Finance has become a community of ideas and concepts that has empowered their readers to fully understand the complexity of personal finance.

To learn more about the Preccelerator® Program, contact Heidi Hubbeling, COO at hhubbeling@stubbsalderton.com

Preccelerator Alumni Company Napkin Finance Partnered with JP Morgan Chase Bank

 Napkin FinanceCongratulations to Preccelerator alumni company founder Tina Hay on their recent partnership with JP Morgan Chase Bank to provide insight into topics like determining your risk tolerance, diversification, and rebalancing your portfolio.

You can check out the financial literacy campaign here.

We’re very proud of your success!

About Napkin FInance
“Everything about money in 30 seconds or less.”™ Napkin Finance is a multimedia company that grew out of their own needs for a better way to learn and understand finance. They developed their platform as a quick and easy resource on everything you need to know about money in 30 seconds or less. Napkin Finance’s mission is to empower their readers to manage their money and understand basic financial concepts in a simple, fun and engaging way.
For more information about Napkin Finance, visit www.napkinfinance.com

For more about the Preccelerator® Program or to apply,  contact Heidi Hubbeling, COO at (310) 746-9803 or hhubbeling@stubbsalderton.com

Screen Door Labs CEO Kari Wu Featured Speaker at Mobile World Congress Americas

screen door labsCongratulations to Preccelerator company Screen Door Lab’s CEO Kari Wu on her upcoming speaking engagement for Mobile World Congress Americas. Screen Door Labs is a part of class 10 of the Preccelerator and will graduate from the program in January 2019. Mobile World Congress is a production of 4 Years From Now [4YFN.] 4FYN is a startup business platform that enables startups, investors and companies to connect and launch new business ventures together.

To view the speakers and register for the event visit here.

About Screen Door Labs 
Screen Door Labs created ARescue, an Augmented Reality team communication software for “boots on the ground”. Built for first responders, the system organizes and displays data onto AR glasses. First responders have access to 2D and 3D maps, as well as geotags and video, feeds from drone operators and other responders. ARescue allows first responders to work safer, respond faster, and communicate better as a team.
Visit www.screendoorlabs.com for more information.

For more about the Preccelerator® Program or to apply,  contact Heidi Hubbeling, COO at (310) 746-9803 or hhubbeling@stubbsalderton.com

Now Accepting Applications for Class 11 of the Preccelerator!

PrecceleratorApplications are now open for Class 11 of the Preccelerator ® Program, an early-stage start-up accelerator focused on the technology and digital media space! the Class 11 term begins October 22, 2018.  Deadline for applications is September 15th, 2018.   

Benefits include:

  • 24/7 access to co-working space and a collaborative environment in our Santa Monica co-working space
  • A robust strategic perks program worth over $450,000
  • 100+ strategic mentors that provide regular office hours and are dedicated to each company’s success. Check out our mentor list here.
  • Onsite non-billable non-substantive legal advice
  • Over 50+ educational and networking in-house events per year, plus access to free admission to many sponsored events.  Check out our upcoming events here. 
  • Investment Strategy Sessions and potential introductions to our network of investors
  • With an emphasis on community and collaboration, the Preccelerator alumni continue to participate, give back and help foster the success of current and future Program participants.

For more information about the Preccelerator and its offerings, contact Heidi Hubbeling at hhubbeling@stubbsalderton.com or (310) 746-9803.

Preccelerator Company Checkplis Featured on BuiltinLA

checkplisPreccelerator Company Checkplis was featured this week on BuiltinLA’s Top 5 companies to watch report. The Checkplis app allows users to pay at any time and restaurants can also integrate the app into their point-of-sale systems (POS).  Checkplis is a mobile app integrated into POS systems so customers can pay, tip and split the check themselves, all from their phones. They are strategic partners and experience creators for restaurant, bar and nightclub industry leaders. Checkplis was founded by Abner Flores and is currently headquatered in Santa Monica, CA.

To read the full article visit here.

Visit www.checkplis.com for more information.

For more about the Preccelerator® Program or to apply,  contact Heidi Hubbeling, COO at (310) 746-9803 or hhubbeling@stubbsalderton.com

Preccelerator Company Lumenus Featured in ‘IoT For All’ Article

lumenusPreccelerator Company Lumenus and founder Jeremy Wall were featured this past week on Iot For All in an article discussing how AI takes wearables to the next level. The company started when the founder, Jeremy Wall, was almost killed while riding his bicycle. It was this life-changing event that pushed him to create products that use technology for something meaningful—to save lives. Today, Lumenus designs and produces apparel equipped with wearable LED lights for runners, bicyclists, and motorcyclists.

To read the full article visit here.

About Lumenus
Lumenus is an IoT safety company, building a Smart Lighting Hardware/Software platform using the Internet of Things to provide real-time safety alerts and create actionable insights for both consumers (bike/run/motorcycle) as well as industrial usage (high-risk vocational workers).

Visit www.lumenus.com for more information.

For more about the Preccelerator® Program or to apply,  contact Heidi Hubbeling, COO at (310) 746-9803 or hhubbeling@stubbsalderton.com

Preccelerator Alumni RentSpree Announces Partnership with California Apartment Association

rentspreePreccelerator Alumni Company RentSpree has just announced that they are partnering with the California Apartment Association (CAA). Together they offer a state of the art tenant screening platform to all CAA members.  RentSpree’s standardized process will help CAA’s 15,000+ members work more efficiently with the verification process, while simultaneously reducing exposure to regulatory risks.

Amidst an atmosphere where faxing has been the norm for many, the new service will allow CAA members to seamlessly access a full credit report and score, eviction history report, completed rental application and more with the click of a button on any device.

All CAA members will also be given access to RentSpree PRO, a premium service offering from RentSpree that helps landlords and managers handle the tenant verification process.  As part of the alliance, RentSpree will also be working closely with CAA to unveil a series of groundbreaking new features to provide unparalleled flexibility and convenience to members.

“As an organization that always puts our members’ interests first, we see tremendous value in the services RentSpree will provide for CAA members,” said CAA Senior Vice President Kevin Pellegrino. “Together, we will be able to deliver a platform that exceeds all current and future CAA member screening needs.”

“We are very proud to have CAA as a major partner where our combined efforts will provide CAA members with a technology platform that will significantly enhance their businesses,”  said RentSpree Chief Operating Officer Michael Lucarelli.  “Importantly, our solution makes it effortless for all CAA owners and managers to offer a digital screening process that most tenants expect in 2018.”

About RentSpree
RentSpree is a Los Angeles-based real estate tech company that has created a proprietary platform allowing landlords and property managers to seamlessly screen and verify tenants. The award-winning tool automates the lease application process for property representatives by providing a 24/7, one-stop system for screening applicants.

Visit www.rentspree.com for more information.

For more about the Preccelerator® Program or to apply,  contact Heidi Hubbeling, COO at (310) 746-9803 or hhubbeling@stubbsalderton.com

Startup Superhero Video Series! – This Week Featuring Marc Kenny on “Selling Your Business”

Stubbs Aderton & Markilstartup superhero series marc kennyes and the Preccelerator Program are proud to announce the launch of their Startup Superhero Video Series – featuring SA&M Attorneys, Preccelerator Mentors, and entrepreneurs on topics specific to entrepreneurship and lessons learned throughout the journey.

This week we’re featuring Stubbs Alderton & Markiles attorney Marc Kenny on “Selling Your Business.”

Marc Kenny is a partner at Stubbs Alderton & Markiles, LLP. Marc’s practice focuses on mergers and acquisitions, joint ventures, private securities offerings, cross-border transactions, and other strategic transactions representing private equity funds, independent sponsors, family offices as well as public and private corporations.

 

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Speaker: Marc Kenny

Moderator: Heidi Hubbeling

Heidi: Talk to me a little bit about your background, how you got to be in mergers and acquisitions and private equity. Also, how you came to be with the firm.

Marc: Sure, I have been practicing for a little over twenty years, specializing in mergers and acquisitions, representing private equity funds, financial sponsors, family offices, corporate strategic and a range of transactions, both here in LA, London and in Silicon Valley. I came to the firm recently after working at another large firm over the years.

Heidi: One of the things we are going to talk about today is with mergers and acquisitions on the seller side, we are going to talk about the ins and outs of that. What are some of the preliminary considerations that a business needs to think about when they go to sell their business.

Marc: I usually start when I meet with an owner who’s interested in selling. I usually start with a series of questions to understand a little more about how they are approaching the process. I ask them “why are you interested in selling?”  “Do you intend to stay with the business after the sale?” “Can the business operate efficiently without you? If not, why not?” “What gaps do you have in managing the team?” “Are there family members or members of the management team who want to continue in the business after the sale?” On the operational side I also ask them, the financial history of the firm over the past 3-5 years of what their growth prospects are going forward. If there is customer concentration, I ask them about that. If they are in a regulated space I ask them regulatory issues they have had over the past few years. Going forward, what kind of regulatory issues they see having in their horizon.

Heidi: It’s a complicated process, a lot of people don’t quite understand. It’s not like selling personal property or your home.  Can a business do this alone? Or do they need a team to back them up?

Marc: Yes, selling your company is a process that is complicated and intense – I often say it’s a marathon that feels like a sprint. The challenge for a business owner is to run an effective sales process and at the same time managing its business. Don’t jeopardize the business because you have been distracted on the sales process. A way for them to do that is two things: one is they have to assemble an internal team at the company – a small group that you can rely on and have confidence in to work with you on the sales process and at the same time.  The goal is for you to keep running your business. The better your business grows during this process the more leverage you have with the buyers. In order to do that, you have to hire outside business advisors. Particularly, outside advisors that have done lots of M&A  transactions. Second, you’d be well advised to hire external advisors who regularly work on M&A transactions. You need an investment banker, accounting firm, wealth management advisor.  For all involved in a sale, it’s important to seek the advice of a wealth management advisor, investment banker – not only will a great banker get you in front of the right prospective buyers (strategic or financial), they’ll also be able to create a story that corresponds with your historical financial performance with your potential for future growth.  And then law firms again, you may have used law firms for real estate, company contracts, but you need to have lawyers who are adept in M&A transactions.

Heidi: Internally what should these businesses do to prepare themselves. Both the owners as well as the team to prepare themselves for this kind of transaction.

Marc: The goal is to become “transaction ready” before engaging with the buyers. By “transaction ready” I mean you have looked both at the good, the bad, the ugly with your business. You should be very honest with yourself about the business, as financial, then as legal, etc. Really the reason for that is if you provide accurate information, to position correctly with your buyer, you will increase the confidence with your prospective buyers and increase the value of your company.  We recommend “sell side” due diligence to basically start as if you were the buyer and you start with your management team and the external counsel or advisors, you start going through the due diligence list. Make sure that all the intellectual property in the business you own, that material customers contracts are all in order and they are not due to be terminated soon, that all regulatory issues have been resolved, confirm you have proper documentation for all stock issuances and equity grants. Again, it is a very exhausting process and that is the reason why you need to have external advisors to help you through the process to help you focus on your business.

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To learn more about the Preccelerator Program, contact Heidi Hubbeling at hhubbeling@stubbsalderton.com

Startup Superhero Video Series! – This Week Featuring Caroline Cherkassky on “Convertible Notes vs. SAFES vs. Priced Round”

startup superhero - caroline cherkassky Stubbs Aderton & Markiles and the Preccelerator Program are proud to announce the launch of their Startup Superhero Video Series – featuring SA&M Attorneys, Preccelerator Mentors, and entrepreneurs on topics specific to entrepreneurship and lessons learned throughout the journey.

This week we’re featuring Stubbs Alderton & Markiles attorney Caroline Cherkassky on “Convertible Notes vs. SAFES vs. Priced Round.”

Caroline Cherkassky is senior counsel of the Firm. Caroline’s practice focuses on advising emerging growth, development stage, and middle market companies on a variety of matters, including venture capital and other financings, employee compensation, securities laws compliance, technology transactions, corporate governance, and other general corporate matters. She also advises the funds and other investors that invest in these types of companies.

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Speaker: Caroline Cherkassky

Moderator: Heidi Hubbeling

Caroline: I started my practice up in Silicon Valley, where there is lots of emerging growth work and I spent a lot of time there in Big Law. I moved to LA a couple of years ago and really enjoy being part of the boutique law scene here. My practice focuses on emerging growth companies from start-up, incorporation, documents for employees, commercial agreements, fundraising and exit and the Venture Capitals and other people who invest in these early growth companies.

Heidi: On the deal side?

Caroline: Yes, exactly.

Heidi:  Okay. Let’s talk a little bit about the fundraising process one of the major lack of education for a lot of startups is the type of vehicle they should use. The type of instrument they should use, when going for funding. There’s a priced round, there’s a convertible note and there is S.A.F.E They are the standard ones for early stage companies, so talk a little bit about the differences and how each is applied.

Caroline: Sure! So, the priced round is really what most people think about when they think about venture financing. The investors in a company agree on a price, the investors write a check, the company gives them shares and they are now equity holders in the company. The investor owns a certain percentage of the company’s capitalization. They also typically get specific investor rights, company applications and lots of negotiation round specific obligations. The convertible note on the other hand is a debt instrument. It means that the investor does not get equity in the company to start with, they get a note which is an obligation that has to be repaid at maturity, but there are certain triggers in there set forth in which the note will convert into equity. Usually some sort of discount to the next round or a cap at evaluation. Last, we have the S.A.F.E which is an acronym for simple agreement for future equity and that’s exactly what it is. It’s document that sets forth the terms on which the investor will get equity in the company in the future. It’s very similar to a note in that it has typically a discount to the next round or some sort of cap in the evaluation in which the S.A.F.E will convert, but its different from a note in the sense that there is no maturity date. There’s no debt obligation and there’s no repayment. So, it is more flexible in that regard.

Heidi: Is one instrument preferred over the other?

Caroline: It really depends on the company and the circumstances. Typically, it comes down to timing and size of the round. The priced round provides a lot of certainty. The investors in the company know exactly how much equity is being exchanged and the amount of money that is being invested. Which is nice for everybody to have that certainty. On the flip side the convertible notes and S.A.F.Es can be really fast. The priced round requires a lot of documentation and often takes much higher fees and timing to negotiate. The notes and the S.A.F.Es on the other hand are pretty quick, but you lose that certainty. So, often we see that there is no hard fast number, but we often see a fluctuation point of around 1 million dollars on the side of financing where it makes sense to do that priced round.

Heidi: Are there certain pit falls that entrepreneurs should look out for each of those?

Caroline: Definitely! One of the big things is the S.A.F.Es and convertible notes they offer a lot of flexibility, but you have these caps and discounts that are negotiated and the investors and the companies don’t do the calculations to figure out how much of the company is being given around. Especially if you do multiple S.A.F.Es or convertible notes and succession, by the time you get to that priced round you may not realize how much equity has been given up. There are some founders who unfortunately, have realized too late that there has been a lot more equity. A lot of dilution.

Heidi: So, this is all important information for start-up companies as they get through their fundraising process so we appreciate you being here.

Caroline: Thanks.

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To learn more about the Preccelerator Program, contact Heidi Hubbeling at hhubbeling@stubbsalderton.com