Tag Archives: Louis Wharton

Preccelerator Webinar: Equity & Alternative Compensation w/ Louis Wharton

For a company founder, it is easy to understand the benefits of providing stock or stock options to employees. It’s a way of compensating employees that doesn’t drain cash from the business. Employees will feel invested in the future success of the company. Join us to get insights and wisdom about maximizing opportunities and minimizing mistakes in creating equity.

If you did not have a chance to attend this workshop on equity and alternative compensation for startups with Louis Wharton, the entire webinar can be found here.

To view our other webinar events, please visit our events page.

Louis A. Wharton is a Partner of the firm. Louis’ practice focuses on advising venture capital funds and angel networks, along with middle-market, emerging growth, early-stage and public companies in corporate finance, mergers and acquisitions, securities compliance and general corporate matters.

He counsels clients in the technology, e-commerce, and digital media, among others.

Considering a New 409A Valuation in Light of COVID-19

As COVID-19 continues to curtail economic activity, private companies granting equity-based incentive awards should consider whether the pandemic’s impact on their business warrants a new independent 409A valuation of their equity securities.

As a reminder, with limited exceptions Section 409A of the Internal Revenue Code and its associated regulations (“Section 409A” and/or the “regulations”) requires companies to issue equity-based incentive awards at fair market value (“FMV”) to avoid potentially significant tax penalties resulting from a determination that such awards constitute deferred compensation issued under non-qualified deferred compensation plans.

Determining FMV
Section 409A clarifies that a company may determine FMV for stock that is readily tradable on an established securities market (such as the NYSE or Nasdaq) by any reasonable method using actual transactions in such stock as reported by such market. However, determining FMV is more difficult for privately held companies, including early-stage companies, whose stocks are not freely transferrable and/or cannot be readily liquidated.

The regulations provide that such companies may determine FMV for their stock by the reasonable application of a reasonable valuation method, based on facts and circumstances existing as of the valuation date. Fortunately, the regulations also provide that the use of certain methods, including a valuation determined by an independent appraisal that meets the requirements of the regulations (a “409A valuation”), are presumed to be reasonable.

Impact of Material Events
Companies can generally rely on a 409A valuation for a period of 12 months after the valuation date. However, the use of such a valuation may not be reasonable if it fails to reflect information available after the date of the valuation that may materially affect the value of the company. The issue of a 409A valuation not accounting for a material event is more likely to arise when the material event increases the company’s value, since granting equity-based incentive awards at a price above FMV will not trigger the negative tax consequences associated with the issuance of deferred compensation under a nonqualified deferred compensation plan. Nevertheless, obtaining a new 409A valuation where a material event negatively impacts a company’s value merits review, at least from the perspective of the additional incremental value that may accrue to service providers who receive equity-based incentive awards. A lower valuation allows a company to issue options and other equity-based compensation at a lower exercise price, meaning a greater potential upside for recipients.

Factors to Consider
While the recent decrease in the value of indices of publicly traded stocks appears to indicate that the COVID-19 pandemic has materially adversely impacted businesses overall, some businesses and sectors have increased in value. Each company must therefore determine how, and to what extent, the pandemic has impacted its value. Companies should consider the following in assessing the need for a new 409A valuation:

Has the pandemic materially impacted and/or is the pandemic material impacting its business?
Does the company intend to issue equity-based incentive awards in the near future?
Should the company wait for more clarity regarding its business prospects?
How do strategic business initiatives and/or plans factor in?
What are the financial and operational costs associated with a new valuation?

In addition, companies should consult with their 409A valuation provider, along with their tax, financial and legal advisors, to assist in their analysis. The cost of a 409A valuation is generally significantly less than the cost of a full appraisal but the potential benefits for incentive award recipients could be meaningful.

For more information or if you have questions about its effects on your business please contact our COVID-19 Task Force at info@stubbsalderton.com or one of our attorneys at SA&M.

COVID-19 Resource Center
https://preccelerator.com/category/covid-19-resources/

SA&M authors:

Louis Wharton

Michael Shaff

Jonathan Sanabria

Preccelerator Workshop: Employment Contracts & Alternative Compensation for Startups

“Employment Contracts & Alternative Compensation for Startups”
Presented by Louis Wharton

Tuesday, December 10th, 2019
12:00PM – 1:30PM

Featuring:

Louis A. Wharton is a partner of the firm and president of the Preccelerator Program. Louis’ practice focuses on advising venture capital funds and angel networks, along with early-stage, emerging growth, middle-market and public companies in corporate finance, securities compliance, mergers and acquisitions, and general corporate matters.

He counsels clients in the technology, e-commerce, digital media and entertainment industries, among others.

SAM Preccelerator
1316 3rd Street Promenade, Suite 107
Santa Monica, CA 90401

We hope to see you there!

*You must register with your name & email to attend this event.

You’re Invited to a Preccelerator Workshop: Equity and Alternative Compensation w/ Louis Wharton

“Equity and Alternative Compensation”
Presented by Louis Wharton

Tuesday, July 9th, 2019
12:00PM – 1:30PM

Featuring:

Louis Wharton

Louis A. Wharton is a partner of the firm and president of the Preccelerator Program. Louis’ practice focuses on advising venture capital funds and angel networks, along with early stage, emerging growth, middle market and public companies in corporate finance, securities compliance, mergers and acquisitions and general corporate matters.

He counsels clients in the technology, e-commerce, digital media and entertainment industries, among others.

SAM Preccelerator
1316 3rd Street Promenade, Suite 107
Santa Monica, CA 90401

We hope to see you there!

*You must register with your name & email to attend this event.

You’re Invited to a Preccelerator Workshop: Employment Contracts & Alternative Compensation for Startups with Louis Wharton

Tuesday, February 19th, 2019
12:00-1:30 PM

Featuring

Louis A. Wharton is a partner of the firm and president of the Preccelerator Program. Louis’ practice focuses on advising venture capital funds and angel networks, along with early stage, emerging growth, middle market and public companies in corporate finance, securities compliance, mergers and acquisitions and general corporate matters.

He counsels clients in the technology, e-commerce, digital media and entertainment industries, among others.

SAM Preccelerator
1316 3rd Street Promenade, Suite 107
Santa Monica, CA 90401

We hope to see you there!

*You must register with your name & email to attend this event.

Stubbs Alderton & Markiles and CREATV Media Featured in L.A Biz Article Regarding Preccelerator Expansion

Stubbs Alderton & Markiles and CREATV Media were featured in a L.A. Biz Article outlining the two firms’ strategic alignment to grow the Preccelerator Program and seek out potential investments in promising startup companies in the digital media and technology space.

To view the full article, click here.

For more information about the Preccelerator Program, contact Heidi Hubbeling at hhubbeling@100.26.91.60 or (310) 746-9803.

Stubbs Alderton & Markiles LLP Expands Preccelerator® and Brings CREATV Media’s Peter Csathy on Board to Oversee Investments

Peter Csathy to join Board of Directors of Preccelerator®, lead its investment strategy, and oversee anticipated investments

Stubbs Alderton & Markiles and CREATV Media Announce Strategic Alliance to Provide Comprehensive Service Offering to Digital Media and Technology Companies

SANTA MONICA, CA – JANUARY 24, 2017 – Stubbs Alderton & Markiles, LLP, a leading Southern California business, technology and digital media law firm, today announced that it will expand its successful early stage accelerator, the Preccelerator®, to accept a larger group of digital media and technology companies, significantly expand benefits to incoming startups, and look to make strategic investments in these companies and others. Peter Csathy, Chairman of CREATV Media, a leading digital media strategic advisory and business development firm, will join the Board of Directors of the Preccelerator to lead its investment strategy and oversee anticipated investments.

“By partnering with Peter, we will grow the firm’s industry leading Preccelerator® into a full-service platform that not only mentors young companies, but also provides smart venture capital and paths to strategic business development and consulting via CREATV Media,” said Scott Alderton, Chairman of the Preccelerator and Managing Partner of Stubbs Alderton & Markiles, LLP. “While the Preccelerator has seen a lot of success, we want to continue to foster the growth of our early stage companies. By adding more companies, formalizing our class structure, expanding benefits and providing initial seed capital, we will give them a greater shot at success. With Peter’s vast experience and industry leadership, he will lead the investment strategy for these companies.”

To date, the Preccelerator Program has graduated five classes with the majority of the twenty-two companies being accepted into larger accelerator programs and incubators or successfully raising their seed funding round. Stubbs Alderton & Markiles launched the first-of-its kind program to provide select start-ups with co-working space, education, networking, mentorship and sophisticated legal services, with the objective of helping grow a founder’s idea from business concept to a funded company. To apply to the Preccelerator, visit www.www.sparkxyz.io/competitions/152.

“Stubbs Alderton’s reputation, entrepreneurial approach and shared vision in growing today’s digital media and technology market, what I call “Media 2.0”, is one of the many reasons we made this happen,” said Peter Csathy, Chairman of CREATV Media. “We deeply believe the growing convergence of content and technology is a worldwide addressable market that requires leading business and legal advisors who think “outside the box”, are deeply connected, move at entrepreneurial speed, and provide access to respected thought leaders and ultimately to smart capital. We aim to bring all of this to our collective client base, and to build CREATV Media and the Preccelerator as launchpad platforms for the world’s next digital media and technology stars.”

The partnership will also look to expand the overall service offering to clients – making available CREATV Media’s deep network of relationships and suite of business development and strategic advisory services and Stubbs Alderton’s deeply-rooted and expanding scope of legal services, led by Greg Akselrud, Chairman of the firm’s Internet, Digital Media and Entertainment practice, and Scott Alderton, Chairman of the Firm’s Venture Capital and Emerging Growth practice.

Stubbs Alderton also announced that Greg Akselrud would join the Board of Directors of the Preccelerator, that Louis Wharton, a law firm partner and current Director of the Preccelerator, would be appointed to President of the Preccelerator, and that Heidi Hubbeling, the law firm’s Director of Marketing and current Director of Operations for the Preccelerator, would be appointed to Chief Operating Officer of the Preccelerator.

About Stubbs Alderton & Markiles, LLP

Stubbs Alderton & Markiles, LLP is a Southern California based business law firm with robust corporate, public securities, mergers and acquisitions, entertainment, intellectual property, brand protection and business litigation practice groups focusing on the representation of, among others, venture backed emerging growth companies, middle market public companies, large technology companies, entertainment and digital media companies, investors, venture capital funds, investment bankers and underwriters. The firm’s clients represent a broad range of industries with a concentration in the technology, entertainment, videogame, apparel and medical device sectors. The firm’s mission is to provide technically excellent legal services in a consistent, highly-responsive and service-oriented manner with an entrepreneurial and practical business perspective. These principles are the hallmarks of the firm. For more information, visit https://preccelerator.com.

About the Preccelerator® Program

The Preccelerator® is a novel platform offered to select start-up companies out of the Stubbs Alderton & Markiles, LLP Santa Monica office that provides interim office space, sophisticated legal services, education, networking, mentorship and $250,000 in usable perks from Google Cloud for Startups, Amazon Web Services, and HubSpot among others, with the objective of helping grow a founder’s idea from business concept to funded startup. The program also retains more than 50 active strategic mentors providing free office hours and discounted services, and provides over 50+ educational workshops and networking events each year. The expanded program will accept a greater number of companies in more formalized classes, depending upon where the companies are in their evolutionary growth, expand benefits to accepted companies, and will look to make strategic investments backed by strategic angel investors. To apply to the Preccelerator, visit www.www.sparkxyz.io/competitions/152.

About CREATV Media

CREATV Media is a leading digital media and technology focused advisory, consulting and business development firm with offices in Los Angeles, San Francisco, San Diego, New York City, Austin and Germany. The firm’s clients span the digital media and tech ecosystems – from the most innovative startups, to the most storied media companies and brands. The firm uses proven, proprietary methodologies – together with exclusive insights, access and market intelligence – to accelerate Media 2.0-related opportunities and transformational growth. The firm also frequently works with buyers and sellers to maximize M&A – positioning them to achieve the best possible outcomes, identifying potential targets and connecting them to key decision-makers, helping to structure and diligence potential transactions, and advising them every step of the way both pre and post transaction. The firm also organizes, programs and leads customized workshops, live events, pilot programs and start-up innovation labs and demo days. The firm’s ethos of fearless innovation is best summed up by its slogan “Media. Unboxed.” For more information, visit .

____________________

Contact:

Stubbs Alderton & Markiles, LLP
Heidi Hubbeling
(310) 746-9803
hhubbeling@100.26.91.60

CREATV Media
Andrea Nunn
(323) 363-9932
andrea@creatv.media

Stubbs Alderton & Markiles, LLP Announces New Class of Preccelerator® Program Companies

Los Angeles, CA, November 7, 2016 (Newswire.com) – Stubbs Alderton & Markiles, LLP is pleased to announce the admission of a new group of companies to join the fifth class of its Preccelerator® Program. The Preccelerator® is a novel platform offered to select start-up companies out of the Stubbs Alderton & Markiles, LLP Santa Monica office that provides interim office space, sophisticated legal services, education, networking, mentorship and access to a strategic perks portfolio worth over $200,000 with the objective of helping grow a founder’s idea from business concept to funded startup.

The new participants include:

Ballerz World is the single largest marketplace that is dedicated to all things basketball. Their worldwide market of 500 million ballerz, and 30 million in the US, can connect and play basketball with one another using our geo-location technology, and their 12,000 pre-loaded courts in every country. They have successfully aggregated the top basketball content on the web allowing our users to share and watch content, in addition to buying discounted basketball gear via the in-app store portal. Ballerz World will feature courts, players, leagues, training, multimedia, and e-commerce all through our digital platform. During its beta phase, the Ballerz World app received more than 10 awards, including the People’s Choice Award at the CES Mobile Apps Showdown, and the Best GPS-Enabled App at the Mobile App Awards. Available in the iOS App Store.

StyleMD is the smartest way to find a fashion stylist that will help you look and feel more confident on any budget. They curate talented stylists from across the country that help you save time and money to achieve your style goals. Whether you’re looking for a simple consultation, an online shopper, or closet assessment StyleMD has got you covered. Available in the iOS App Store.

Virtual Reality represents a creative revolution. Humans have always told stories with words and pictures. Now PlayspaceVR is creating the next generation of graphic storytelling by bringing comic books to Virtual Reality. Their team has domain expertise in VR/AR, media/entertainment, intense work ethic, and a true love for what they do. http://playspacevr.com/

“The Stubbs Alderton & Markiles Preccelerator® Program is committed to continuing to support the Los Angeles technology scene and provide a platform for early stage companies to gain momentum and secure a solid foundation to build their businesses,” says Heidi Hubbeling, Co-Director of the Program.

Led by Stubbs Alderton Partner Louis Wharton and Heidi Hubbeling, the Preccelerator® Program has had great success with its classes, which has resulted in a majority of the companies being accepted into larger accelerator programs and incubators or successfully raising their seed funding round.

About Stubbs Alderton & Markiles, LLP

Stubbs Alderton is a business law firm with robust corporate, public securities, mergers and acquisitions, business litigation and intellectual property practice groups focusing on the representation of venture backed emerging growth companies, middle market public companies, large technology companies, entertainment and digital media companies, investors, venture capital funds, investment bankers and underwriters. The firm’s clients represent the full spectrum of Southern California business with a concentration in the technology, entertainment, videogame, apparel and medical device sectors. Their mission is to provide technically excellent legal services in a consistent, highly-responsive and service-oriented manner with an entrepreneurial and practical business perspective. These principles are the hallmarks of their Firm.

For more information about the Preccelerator® Program and to fill out an application, visit www.preccelerator.com or contact Heidi Hubbeling at (310) 746-9803.

SAM Preccelerator® Program Featured in San Fernando Valley Business Journal

Trouble viewing the article? Click SFVBJ – Stubbs Alderton Article.

For more information about the Preccelerator® Program, contact Heidi Hubbeling at hhubbeling@100.26.91.60 or (310) 746-9803.

Preccelerator Program Event: Accelerators, Incubators & Co-Working Spaces: Which One is Right For You?

This panel, hosted by the SAM Preccelerator Program, discusses the differences and benefits of accelerator, incubator and co-working spaces from the accelerator, legal and entrepreneur viewpoints.

For more information about the Preccelerator Program, contact Heidi Hubbeling at (310) 746-9803 or hhubbeling@100.26.91.60