Emerging Companies & Venture Capital

Axios interviews John Wayne Horton about his practice in the Emerging Companies & Venture Capital group at Lowenstein Sandler, where he represents startups in venture capital financings, growth and private equity deals, merger and acquisition transactions, and private tender offers. Horton says: "I like being able to shepherd an early-stage client. There's these smart kids, they're really great at what they do—coding or making an app or whatever it is. Their idea is brilliant, but they need help running a business. I like being that point of contact." Regarding the current market, Horton observes: "Tech and emerging companies aren't going away. The world is innovating so quickly, there's so much potential. I think venture is picking up… the low point is behind us. People are learning when to pivot."

In an interview on his recent move to Lowenstein Sandler as a new partner in the firm’s Emerging Companies & Venture Capital group, John Wayne Horton tells Law360: "The Lowenstein brand has been progressing and building reputation in the market.” He adds: "Their focus is on hiring good people and nice people. It's not such a big machine that you don't know all your partners and all your colleagues. I think that's important."

Horton describes his practice representing startups and growth companies as outside general counsel: “I love being a point person, an advisor to startups," he says. "A lot of founders come out of college or incubators and they haven't run a business before. They're just really good coders or they're really good at whatever they've invented. I'm often their first call, 'Hey we want to raise money. We want to attract talent. We want to issue stock options. We have to protect our IP. I'm often just kind of a quarterback for them. I love being that shepherd to our startup clients."

Horton’s move was also reported by Bloomberg Law.

Matt Savare, Chair of Lowenstein’s Commercial Contracts practice and Vice Chair of Lowenstein Crypto, is interviewed on the podcast The Price of Business about the implications of computer-generated content—particularly when it is used to create deep fakes and misappropriate an individual’s persona, as seen in recent controversies where bots were made to sound like Scarlett Johanssen and Tom Hanks. Savare discusses how companies seeking to use AI in their marketing should be mindful of potential pitfalls and liability, and how the United States should take the lead in regulating this transformational technology to ensure it is used responsibly. 

Robert J. Paradiso, partner and Chair of Lowenstein’s Life Sciences and Chemical Patent Practice, comments in IAM that AI will “revolutionize many applications in the life sciences industry,” from initial research and identification of candidates to regulatory approval and marketing.

“The application of AI technology … will also provide enhanced opportunities in the development of intellectual property,” Paradiso says. “Patent-eligible subject matter will likely be available for new molecular entities, clinical trial results and post-marketing analysis, as well as other stages in the developmental and regulatory processes,” he continues, adding that “these opportunities will be invaluable in product-lifecycle management.”

News of Abraham J. Kwon joining Lowenstein Sandler as partner in its Emerging Companies & Venture Capital (ECVC) practice group is reported in Reuters, Financial Times, Bloomberg Law, Politico, and Law360, where Kwon notes that the chance to join the group’s founders, Ed Zimmerman and Raymond P. Thek, as well as his former colleagues Meredith Beuchaw and Brendan J. Koeth, was "too exciting an opportunity to pass up.” He adds: "Lowenstein's VentureCrush platform was another enticement: Both my investor and startup clients will greatly benefit from the opportunities offered by the program to grow their networks and expand their knowledge.” (subscription required to access some articles)

Matt Savare, Chair of Lowenstein’s Commercial Contracts practice and Vice Chair of Lowenstein Crypto, comments in InformationWeek on Scarlett Johansson’s claims that OpenAI used her voice without permission. Noting that current laws governing the right of publicity are inconsistent across jurisdictions, Savare says: “The right of publicity, many decades ago, was described as a haystack in a hurricane, and it hasn’t gotten any better;” adding: “Especially in the U.S., there’s no federal right of publicity statute.” Savare calls the right of publicity— particularly in the context of AI— “a very confusing, complicated and nuanced area of the law…It’s probably one of the more complicated areas that I get asked about quite a bit.”

In Bloomberg Law, Kathleen A. McGee emphasizes the central role of governance in the updated NIST Cybersecurity Framework 2.0, highlighting its importance for regulators and plaintiffs. McGee sees the updated NIST Cybersecurity Framework 2.0 as a crucial tool for companies, noting that if her clients establish standards using NIST guidance, it becomes a "benchmark to something that demonstrates reasonableness" in their security measures. The revised framework expands beyond critical infrastructure, providing guidance for entities ranging from small businesses to those employing artificial intelligence. McGee suggests its adoption can aid companies in regulatory compliance and litigation defense while offering a comprehensive set of cybersecurity best practices.

Bryan Sterba comments in Cointelegraph on the legal battle between the New York Times and OpenAI and Microsoft, in which the newspaper publisher claims the tech companies violated its copyright to its content. Sterba explains that OpenAI is advocating for a broad interpretation of the “fair use” defense, which is “basically a public policy argument” to encourage the development of artificial intelligence. He adds that OpenAI’s argument by OpenAI that it will provide publishers with the option to opt out of being used for data collection “will be cold comfort for NYT and other publishers, as they do not have any insight into what portions of their published copyrighted material have already been scraped by OpenAI.” The article also ran in Financial World. 

Eric Weiner tells Food Business News that the food tech investment outlook appears positive, after last year’s slowdown. “The market was very, very founder favorable for a long time and reached a high point around nine quarters ago… it’s now swung too far in the other direction."

Weiner adds that more rational valuation and less cautious investors makes him “bullish about the market in 2024.”

In a two-part article in Cybersecurity Law Report, Mary J. Hildebrand CIPP/US/E, partner, founder and Chair of Lowenstein’s Privacy & Cybersecurity practice, discusses how companies should adapt their cyber programs in light of the recent amendment to the New York Department of Financial Services’ cybersecurity regulations. First, Hildebrand advises that “the CISO should gather information and begin talking points for leadership as a gap analysis proceeds;” then, she says, the CISO should “take the existing checklist and go through the new rules with the dates of implementation, and slot in the new requirements.” Hildebrand adds that company boards of directors should “make sure the CISO has the money and other resources to develop and implement the cybersecurity program.”

Companies should also consider increasing the frequency of their vulnerability scanning, Hildebrand continues, observing that “centralizing and managing vulnerability reports… an area where companies could do a lot better,” She also suggests that documentation from outside vendors and affiliates be “part of the material that a CEO may need to consult before certifying compliance.” (subscription required to access article)

Anthony W. Raymundo, Office Managing Partner of Lowenstein’s Palo Alto office, is featured in Law.com, describing his career path from associate in the firm’s Tech Group to his current leadership role. He discusses his mission “to expand the Lowenstein brand across the Silicon Valley region and beyond,” and advises junior attorneys to “be as active as possible in establishing and growing your career by constantly expanding your network, learning new skills, exploring new opportunities, and nurturing relationships.”

Raymundo says he is excited “to see tools that leverage Artificial Intelligence (AI) to assist with making common tasks in the legal industry more efficient... I’m excited to see how technology will continue to develop and what new innovations we can’t even imagine today will arise, causing the legal industry to learn and adapt as we service clients in those areas.”

In The Wall Street Journal, Raquel Smith describes the impact of Silicon Valley Bank’s near collapse on venture capital-backed startups seeking loans. Smith says that: “A lot of these companies entered into these [debt] facilities when interest rates were lower and the markets were better.” (subscription required to access article)

Law360 reports that Anthony W. Raymundo has been named managing partner of the firm’s Palo Alto office. Lowenstein Chair and Managing Partner Gary M. Wingens says: "Anthony's experience in tech and venture capital investment make him a natural choice to strengthen the impressive foundation Lowenstein Sandler has built over the last 14 years in the heart of the technology industry.” The story was also reported by Reuters, Bloomberg Law, Daily Journal, and Attorney-at-Law. 

In The Information, Eric Weiner discusses the recent trend of “up rounds in name only:” financing that guarantees investors high rates of return in worst-case scenarios. Weiner counsels startup and emerging growth companies across all industries and stages as well as the angel, venture, and growth equity funds that invest in them.

Doreen M. Edelman, Chair of Lowenstein’s Global Trade & National Security, talks to Export Compliance Daily about the Bureau of Industry and Security's shift towards more aggressive enforcement policies, noting that she views this as a “recommitment” to cracking down on illegal technology transfers “especially for exports to China and Russia. “

Edelman further notes that an increase in enforcement may persuade more companies to pursue voluntary self-disclosure, which not only helps with “keeping the company out of the news,” but also demonstrates that “this is not a joke, that the government takes this seriously,.” She doubts the Commerce Department will start publishing charging letters immediately: “[Commerce is] always going to keep their discretion. They're not getting rid of the pre-charging letter discussions, so there's still going to be flexibility.” (subscription required to access)

Numerous media outlets report that Matthew R. VanderGoot has joined Lowenstein as partner in the firm’s Tech Group, based in its Washington, D.C office, including Law360 (April 4, April 8), Bloomberg Law,  and Reuters' The Daily Docket.  Zarema A. Jaramillo, Managing Partner of the D.C. office, notes that the firm is expanding its presence in the tech and VC markets inside the Beltway: “[The] tech market in D.C. is robust and will continue to be," she says. VanderGoot adds that “the opportunity to help build out Lowenstein Sandler's D.C. tech practice served as a main attraction for … joining the firm.” 

Doreen M. Edelman, Chair of the firm’s Global Trade & National Security practice, stresses the need for companies to screen their client lists against government sanctions databases in light of the sanctions against Russia in CNBC’s “Small Business Playbook.” Edelman says the sanctions add to the reasons start-ups in technology and smaller companies, in general, need to have compliance programs in place, though they are less likely to have developed or updated such programs. “If the last time you screened was three years ago, I’m not sure OFAC will give you much credit,” says Edelman.

Ed Zimmerman spoke to Forbes about the increasing trend toward buying secondary interests in venture funds. “‘Investors now raising funds more frequently, as fast as annually, might be multimillionaires on paper, but have not yet received any profits themselves,’ notes Zimmerman, Chair of Emerging Companies & Venture Capital (fka, The Tech Group) at Lowenstein Sandler and an investor in underrepresented fund managers through First Close Partners. ‘There’s no better time to ask your LPs to re-up than once you’ve handed them a check.’” Zimmerman has been involved in thousands of venture fund financings of emerging companies during his thirty years at Lowenstein Sandler, and has invested in more than 150 startups. In addition to his roles at Lowenstein and First Close Partners, Zimmerman has been an Adjunct Professor of Venture Capital at Columbia Business School for more than 15 years.

In Fortune, Ed Zimmerman, Chair of Lowenstein Sandler’s Tech Group, Co-Founder of First Close Partners and Adjunct Professor of Venture Capital at Columbia Business School, discusses trends regarding private equity and venture capital firms majority owned by underrepresented managers. “‘The underfunding in this market segment [for underrepresented VCs] has been so persistent and dramatic—you can’t really put enough dollars into the market to quench the thirst,’ says Zimmerman, the Lowenstein Sandler tech lawyer who co-founded First Close.” The article, which focuses on JoAnn Price of Fairview Capital—a pioneer of diversity-focused investing—speaks to the emergence of more managers focused on ensuring that venture and private equity are more diverse, equitable and inclusive, noting: “Equity Alliance joins several other investors with a similar focus, including First Close Partners and a new fund from Accolade Partners.” Zimmerman also co-founded and Chairs VentureCrush.

In TIME, Doreen M. Edelman, partner and Chair of Lowenstein’s Global Trade & National Security group, and senior counsel Laura Fraedrich discuss the impact of sanctions on Cuba-based organizations and businesses that have been locked out of online services such as file transfer sites, social media managers, cloud services, development apps, video calling, and education platforms. Edelman explains that the complicated trade restrictions and inconsistent history of U.S.-Cuba relations discourages U.S. companies from finding workarounds for clients located there. She says: “I’ve worked with a lot of clients over the years who take a very conservative approach and decide they don’t want to run that risk. [Startups especially are] not going to want to pay for legal fees for stuff like this, so they’ll just follow the embargo and be done with it.” Fraedrich adds that the U.S. Treasury Department’s Office of Foreign Assets has lately been more “targeted at people who are in or have been in the government; …you really wonder why we couldn’t go to something like that for Cuba to mitigate some of these secondary and tertiary effects.”

In Supply Chain Management Review, Doreen M. Edelman, partner and Chair of Lowenstein’s Global Trade & National Security practice, and Laura Fraedrich address the recent rollback of tariffs on steel and aluminum imports, and the potential impact on supply chain challenges. Edelman advises companies “to stay engaged and hands-on. Make sure paperwork and advanced CBP filings are in order. Contact everyone in the import supply chain to ensure your products are a priority known to all parties in the import chain. Ensure your classifications, markings, and country of origins representations are accurate, complete, and don’t trigger CBP questions.”

Fraedrich says that the lifting of these tariffs “will help U.S. manufacturers be more competitive in the world market while at the same time helping the EU steel and aluminum manufacturers maintain their production. The move also reinforces the Biden Administration’s vow to re-engage our allies in bilateral and multilateral negotiations on commercial issues to create a more unified front related to threats from countries such as China and Russia. This deal may be the beginning of similar deals for other countries and deeper negotiations with the EU on trade issues.”

Foreign Investment Watch interviews Doreen M. Edelman, partner and Chair of the firm’s Global Trade & National Security group and number one on the company’s Top Advisors 2021 list, about President Joe Biden’s approach to China, the latest governmental trade appointments, a possible U.S. investigation into Chinese subsidies under Section 301 of the U.S. trade law, and other government actions that target China. “One example is Section 889 of the National Defense Authorization Act, which prohibits any U.S. government agency from buying or doing business with any company that uses telecom equipment that uses components from one of the targeted Chinese companies,” Edelman says. “These are broad provisions with the focus being to ostracize China.” She adds, “I don’t think either side wants … [a trade war] because of the market implications, and Biden has pledged to be more multilateral in his approach. Let’s hope that the ongoing bilateral discussions are substantive, and the new appointees can get engaged quickly.”

Edelman continues: “U.S. business and consumers were, and are, the victims of the Section 301 tariffs. No one thought they would last this long. More tariffs would not be prudent. … The silver lining I see is that trade regulations and tariffs are now issues that senior management can take advantage of to optimize their business if they really understand their options. It is critical to every company’s growth strategy.”

Bloomberg Law includes comments by Valeska Pederson Hintz on Bill Ackman’s new “SPARC” vehicle, or special purpose acquisition rights company. Pederson Hintz says, “SPARCs might only attract a small pool of dealmakers due to financing risks." She adds, "If you’re not a super famous person like Bill Ackman, I don’t see how you convince target companies they should announce a deal with you and spend all the time negotiating it in the hopes you’re going to be able to rally all these rights holders.”

Steven E. Siesser, Chair of the firm’s Private Equity practice and Co-Chair of the Transactions & Advisory Group, comments in Bloomberg Law on the Federal Trade Commission’s recent announcement that it can no longer review mergers and acquisitions within 30 days, as required by the Hart-Scott-Rodino Act; due to the high volume of deals lately, now an investigation may remain open and then subsequently be declared unlawful. “There is no indication of if and when the FTC will tell you the deal is good to go,” Siesser says. “And that leaves you in limbo, which is a real problem because it is an open-ended risk situation.” He adds that this may result in parties being less willing to close deals, requiring contractual changes to mitigate risk of possible future unwinding: “That’s a big deal and a matter of meaningful impact to M&A practitioners already looking to close mergers and acquisitions at a time when activity is so robust, and it’s just such volume in the market.”

Compliance Week and Bloomberg Law include comments by Valeska Pederson Hintz about the Securities and Exchange Commission’s decision to approve rule changes proposed by Nasdaq that require Nasdaq-listed companies to disclose information about their board’s diversity. Pederson Hintz tells Compliance Week: “All U.S. public companies, Nasdaq-listed or otherwise, should be paying attention to what investors do with the data disclosed as a result of Nasdaq’s board diversity rules. If they don’t want to fall behind the curve, they should act to address diversity concerns before that data is used against them.” In Bloomberg, she adds that the new rules will give investors “access to an arsenal of information on board diversity that they can use to analyze the issuer, compare it to peers, and apply pressure.”

Ed Zimmerman, Chair and co-founder of Emerging Companies & Venture Capital (fka, The Tech Group), Adjunct Professor of Venture Capital at Columbia Business School, and a Founding Partner of First Close Partners LLC, comments in Reuters on the trend toward funds like Tiger Global leading pre-IPO “cap table cleanup” rounds in which investors infuse capital solely or largely for secondary (to purchase from existing shareholders). Zimmerman says, “A flood of funds at a time when startups stay private for much longer has led to more buy-back deals on the private market.” For instance, Tiger Global led Gupshup’s $240 million raise to buy back shares in advance of a potential 2022 IPO.

In Foreign Investment Watch, Doreen M. Edelman, Chair of the firm’s Global Trade & National Security group, and Christian C. Contardo discuss a recent report by the Defense Critical Supply Chain Task Force and its recommendations for building U.S. supply chain resilience, including the possibility of requiring companies to disclose foreign capital they receive from adversaries. Edelman says, “I am advising companies, not just technology and defense providers, to focus on their supply chain.” Regarding the possibility of creating an inclusionary process that exempts “trusted partners” from CFIUS requirements, Edelman predicts “a formal or informal loosening of the requirements for trusted partners,” despite the fact that these relationships are always subject to “a fact specific transaction review.” Contardo observes that these recommendations “are in addition to voluntary incentive-based supply-chain security programs such as the Department of Defense Trusted Capital program, [which] matches vetted capital providers to U.S. businesses working with the DoD in key technology sectors as a way for the businesses to raise necessary funding to grow without risking investment from countries of concern to the DoD.”

Zarema A. Jaramillo, Managing Partner of Lowenstein’s Washington, D.C. office, is featured in Northern Virginia Technology Council’s (NVTC) member spotlight, where she discusses the firm’s growth and how it is serving technology clients in the Washington area. Jaramillo says, “The synergy of our core practices here in D.C. seamlessly complements the firm’s wide range of transactional work in technology, private equity, and life sciences, as well as others, and enables us to offer a multidimensional, global perspective to businesses operating around the world.” She adds that the D.C. office is rapidly growing “because we are attracting the highest caliber of attorneys who are able to collaborate in a great culture that encourages an entrepreneurial mindset. … As a woman-led office, we are focusing our efforts on making it a place where all lawyers can grow and succeed and shape their practices in a way that allows them to be all that they can be.”

In an HFM article on the increasing popularity of hybrid public/private funds, partner Benjamin Kozinn of the Investment Management group discusses how to structure these funds and their fees, as well as how to mitigate compliance risks. “One approach is to have opt-in opt-out structures where the investor elects whether they want to allocate a portion of their capital (e.g., 10%, 20%) to privates. In the opt-in/out model, whether you actually invest in privates becomes a function of how many people opted in or opted out,” Kozinn says. He adds that one common approach with these funds is to charge a lower management fee and a higher incentive fee: “Maybe you don’t have to worry about portfolio risk management every day as you would with public markets, but the costs and the complexity of private investments can be higher than public investments.” Kozinn also warns of possible MNPI (Material Nonpublic Information) issues with these structures: “If a private company you are invested in is getting bought by a public company, or it is entering into a significant commercial arrangement with a public company, the manager is potentially walking into MNPI problems if you don’t have a physical separation and appropriate information barriers between the private and public investment teams.” (subscription required to access article)

Doreen M. Edelman, Chair of the firm’s Global Trade & National Security group, speaks to Foreign Investment Watch about preemptive disclosures of non­notified CFIUS transactions involving SPACs, where companies state that they will not be submitting a declaration with CFIUS unless they are requested to do so. Edelman calls this approach “a proactive, low risk way to let regulators know that the CFIUS process was not ignored or flouted.” She adds that “by making this statement to the SEC, at least it’s on record somewhere that the parties carefully reviewed the transaction for national security concerns” (subscription required to access article).

Foreign Investment Watch recently ranked Edelman as number one on its Top Advisors 2021 list of lawyers who provide legal advice concerning national security reviews of foreign investments in the United States and abroad

In an interview with Authority Magazine, Meredith Beuchaw and Chandra Shih talk about their work in the technology sector, what has influenced them, and why it is important to increase the number of women founders in this field. Beuchaw says, “We’re missing half the great ideas if women are not founding companies and getting funded. We need women because we are missing out on innovation if we do not have women-founded companies.” Shih adds: “Getting more women funded and seeing more women succeed will create a domino effect — it’s the whole idea that representation matters.”

Both Shih and Beuchaw are members of Lowenstein Sandler’s Tech Group, known for representing the underrepresented. Shih, who works with growth stage and early stage startups as well as venture firms and other angel and strategic investors, talks about having been recruited and mentored by her former law school professor and managing partner of the firm’s Palo Alto office, Kathi Rawnsley: “In addition to enjoying the work we do and the people I get to work with, it has been so fantastic to start and grow my career at a place where I could see women had a seat at the table at the highest levels of the firm."

When asked to name her influences, Beuchaw, who leads M&A transactions and has counseled clients both on the buy and sell side through hundreds of deals for over 15 years, cites Michelle Obama’s quote, “When they go low, we go high.” “It is about not letting others’ poor behavior be an excuse for our own,” she says. “This is especially important as we see more women on boards and in decision-making positions. Sadly, most of us have been at the received end of bad behavior along the way, but it is important not to let that be the standard for our behavior now and realize we can bring our moral high ground with us."

Shih references Stacey Abrams’ book, Lead from the Outside, as a helpful guide that "focuses on the challenges that women, people of color and those in the LGBTQ community might have in starting their career, as they are told, ‘to advance you must be a leader,’ but may not know where to begin because the system they’re trying to advance in was not built for them.”

Zarema A. Jaramillo is featured in a recent Lowenstein video that describes the ways in which our Washington, D.C., office serves the technology community in the greater D.C. metro area. The video appears in Potomac Tech Wire, a e-newsletter that provides a daily summary of the area's most important technology news.

Ed Zimmerman, Chair and co-founder of Emerging Companies & Venture Capital (fka, The Tech Group), Adjunct Professor of Venture Capital at Columbia Business School, and a Founding Partner of First Close Partners LLC, speaks about The Diversity Dividend (#ElDividendodelaDiversidad) as part of a panel, “The Return on Investing in Diverse Fund Managers,” presented by Promoting Venture Capital in Peru (PECAP). The panel, including Susana Garcia-Robles of Capria/LAVCA, Anita Fiori of IDB Lab, Jose Fernandez of StepStone Group, and moderator Luis Narro of PECAP, addresses why it is important and lucrative to invest in underrepresented venture capital fund managers. “Diversity is not only an imperative from a human rights, civil rights, and justice perspective, … it is a financial imperative,” Zimmerman says. “There are unbelievable missed economic opportunities as a result of the myopia that comes from having only people who look the same, went to the same schools, and live in the same communities.” He encourages LPs to speak up by asking GPs to diversify their reference list in order to expose the flaws in their networks. Zimmerman notes that a lack of diversity in the VC world results in “massive costs and causes exclusion, discomfort, and inequity in the workplace.”

Nicholas San Filippo IV is interviewed on the Deep Wealth: The Sell My Business Podcast, where he discusses proven strategies for achieving successful M&A deals. San Filippo talks about common mistakes business owners make, the impact of the COVID-19 pandemic, and why trust is the currency in mergers and acquisitions. San Filippo also explains why he became an M&A lawyer: “I feel like Superman when I come in and I'm able to help entrepreneurs go from paper wealth to liquid wealth."

The arrival to Lowenstein of partners Edmund S. Cohen and Rachel Ingwer and counsel Scott Malone to the firm's Tax practice is noted in CPA Practice Advisor, General Counsel News, The Daily Docket, Law Fuel, Bloomberg Law, The American Lawyer, and the New York Law Journal. The lawyers will work closely with the firm’s Investment Management, Family Office, Private Equity, and Mergers & Acquisitions teams on sophisticated transactions and disputes. View Lowenstein's news announcement about these lawyers' arrival to the firm.

The Wall Street Journal reported on First Close Partners (tweet below from reporter Yuliya Chernova):

"Ed Zimmerman, chair of the tech practice at the law firm Lowenstein Sandler, says he texted Theresia Gouw, founding partner at Acrew Capital, in November about the idea of teaming up to invest in underrepresented fund managers.

The newly formed firm, First Close Partners, has already backed about two dozen venture funds and expects to invest in more than 60 by the end of the year, Mr. Zimmerman said. These include Avid Ventures, Base Ventures, Cleo Capital, Marcy Venture Partners and Slauson & Co., among many others. The majority of fund managers that First Close has committed to are Black and a majority are women, Mr. Zimmerman said. Some contacted First Close cold, with no prior introductions.

Founding partners in First Close also include Regina Benjamin, a former U.S. Surgeon General, as well as Josh Kopelman, co-founder of First Round Capital, and Betsy Zimmerman, partner at GrapeArbor Ventures and Mr. Zimmerman’s wife.

“We are trying to have an impact that exceeds our dollars, and also to make money with the underrepresented managers that we are backing,” Mr. Zimmerman said. “We’ve seen instances of our money being dramatically multiplied by other [limited partners] coming in, either where we introduced them or served as a reference,” he added.

He declined to state how much capital First Close Partners has in total, but said that his family is investing $1 million into it.

Well-connected people in the venture industry can act on diversifying who gets to play in the market. While there’s an aspect of social good in the effort, Mr. Zimmerman says that it’s also about financial benefit: “When a fund has been successful, it’s hard to get into fund three or fund four. Being an early backer enables you to follow on.”

In Bloomberg Wealth, partner Steven E. Siesser, Chair of Lowenstein’s Private Equity practice and Co-chair of its Transactions & Advisory Group, cautions about the unpredictable future of now-popular special purpose acquisition companies (SPACS): “Whatever stops this bull market will lay its first sights on SPACs,” he says. “They'll be the first casualty.”

Lowenstein's representation of Avid Ventures in the launch of its $68 million-plus debut venture capital fund founded by Addie Lerner, decade-long investor at General Catalyst, General Atlantic, and Goldman Sachs, is noted in the Global Legal Chronicle. The Lowenstein deal team included Ed Zimmerman, Marie T. DeFalco, Max Karpel, Robert J. Menendez, Joseph F. Hendricks, and Bettina C. Elstroth. View Lowenstein's news announcement about this transaction.

In The American Lawyer, Chair and Managing Partner Gary M. Wingens discusses how the firm performed “shockingly well given what was going on in the world” in 2020. Wingens credits the firm’s investment funds, tech, life sciences, bankruptcy, and capital markets practices, in addition to engagements in venture capital and private equity. “People need lawyers as things change,” he says. Wingens is optimistic about 2021: “I do feel that we are at the beginning of a whole new economic cycle,” he says. “I think there’s going to be an enormous amount of investment activity.”

Ed Zimmerman, Chair and co-founder of Emerging Companies & Venture Capital (fka, The Tech Group) and Adjunct Professor of Venture Capital at Columbia Business School, teamed up with Marie T. DeFalco (Vice Chair of Lowenstein’s Investment Management Group) to represent Avid Ventures in its $68 million-plus debut. Zimmerman tells Business Wire that managing partner Addie Lerner is “a brilliant, hard-charging, and charismatic force within the venture community. She will win deals by force of intellect, personality, and the reputation for excellence and integrity that she has already developed here in the States, in the UK, and in Israel. Having been opposite Addie in my role as counsel to startups, I’ve been impressed to see, more than once, founders rapidly transition from meeting Addie to making room for her in oversubscribed venture rounds.”

In Pitchbook, Zimmerman says: "LPs back the person in a solo GP fund. … I'm excited to see how people react … [to Avid], and whether others say this strategy is different and I'd like to copy it, or at least pivot into it a little bit more.”

Zimmerman tells TechCrunch that Lerner has a reputation for being “extraordinarily thoughtful about deals” and that one entrepreneur called her “one of the smartest people she has met in a decade-plus in venture.” He adds: “I’ve seen it myself in deals and then I’ve seen founders turn down very well branded funds to work with Addie. … Addie will find and win and be invited into great deals because she makes an indelible impression on the people who’ve worked with her and the data is remarkably consistent.”

In Crunchbase, Zarema A. Jaramillo, Managing Partner of Lowenstein’s D.C. office and partner in the firm’s Antitrust/Competition practice, discusses the possible chilling effect on venture capital investments due to increased regulatory scrutiny under the new administration. Jaramillo observes that “additional scrutiny is being brought on by agencies operating under the general idea that technology companies have too much power.” She adds that regulators may be influenced by their prior reluctance to act against large acquisitions by companies such as Facebook and Google. “[T[he government says ‘we got it wrong with larger companies, we don’t want to get it wrong again. … They can’t predict if there is harm to competition, so they are erring on the side of ‘challenge it now’ rather than later. We see the new administration taking a stronger approach to these.”

On GGV Capital’s Unscripted, Ed Zimmerman, Chair and co-founder of Emerging Companies & Venture Capital (fka, The Tech Group) and Adjunct Professor of Venture Capital at Columbia Business School, talks to GGV’s Jeff Richards about the importance of QSBS for founders, diversity on your startup’s board, the leverage shift in term sheet negotiations, and the impact of SPACs v. IPOs for VC-backed growth companies.

Benjamin Kozinn recently participated in a webinar on valuation presented by the Hedge Fund Law Report; its points are summarized in this article. Kozinn comments on valuation challenges; valuation frequency, processes, and governance; valuation committees and third-party valuation agents; and the impacts of the coronavirus pandemic on valuation. He notes that “the effect of the coronavirus pandemic has been relatively mild [on asset valuation]. … Market disruptions have been fairly short-lived. Advisers have been revisiting their valuation policies and speaking with their auditors.”

Jeffrey Cohen, Chair of Lowenstein’s Bankruptcy & Restructuring Department, is interviewed on the podcast Debtwired! on the future of emerging company restructurings (including VC-backed tech companies), what to expect from the distressed market in 2021, and the Chapter 11 cases of Modell’s and Century 21 Department Stores.

Laura Fraedrich is interviewed in Foreign Investment Watch about foreign direct investment requirements, CFIUS filings, and mitigation negotiations. Regarding the incoming administration, she says, “I anticipate that the United States will return to a more multilateral approach. … Specifically, I think we will see a return to a cooperative effort to restoring the dispute settlement arrangement at the WTO and to the negotiation of multilateral trade agreements.” Fraedrich notes that “during the past five years, the majority of mitigation agreements have related to preventing access to data or technology by the foreign investors,” and she advises companies to “carefully consider where the national security concerns may lie and determine the cost of potential mitigation arrangements when negotiating. This is because certain mitigation requirements might impact the benefit of the bargain and thus valuation. Finding this out after the deal has been struck can create a difficult situation.”

Fraedrich encourages companies to consider foreign investment and ownership implications early in the transaction: “A company organized in the United States might be a foreign entity if there is foreign ownership and control. A joint venture that is organized in a foreign country might be subject to CFIUS jurisdiction if a U.S. business has been contributed. The new rules for private equity funds are complicated, and if fund managers are not careful, a U.S.-organized fund can be a foreign person.”

Doreen M. Edelman is interviewed on the podcast FCPA Compliance Report on why every compliance professional needs to be ready to comply with CFIUS and where CFIUS may be headed under the Biden administration. Edelman urges parties to a transaction to consider‒long before closing‒any factors that could trigger CFUIS scrutiny, such as how the technology in question will be classified for exports, who are the ultimate beneficiaries, and possible exit strategies.

Ed Zimmerman, Chair and co-founder of Emerging Companies & Venture Capital (fka, The Tech Group) and Adjunct Professor of Venture Capital at Columbia Business School, is interviewed by CEO/Founder Mazy Dar on the podcast Openfin MVP. Entitled “Our Whole Selves at Work with Ed Zimmerman,” Zimmerman discusses his career as a lawyer, investor, and co-founder of VentureCrush, as well as his social/political advocacy efforts. Topics include Zimmerman and Dar having had lunch with Vice President-Elect Kamala Harris years ago (before the duo hosted her for a fundraiser for her successful 2016 Senate bid), as well as discussing common legal mistakes founders make and the more than 100 angel investments Zimmerman has made. The conversation also focuses on efforts to improve #Diversity in tech and venture, with reference to company culture and initiatives in which Zimmerman has personally been involved, including his Wall Street Journal Accelerators columns in 2013 (asserting that #VentureCapital was too white, too male, and too homogenous) and 2014 (Zimmerman published one of the earliest pledges against #GenderBias in Tech, a pledge he still follows).

In an article in Tax Notes Federal discussing the Biden administration’s likely approach to trade issues, Doreen M. Edelman says she does not foresee any immediate removal of section 301 tariffs against China in the near future: “I think … [President Biden is] … going to look at them. I don’t think he’s going to come in and immediately remove them in an executive order.” Regarding the ongoing dispute between the United States and the EU about Boeing-Airbus, Edelman state that “the administration will likely push for negotiations to get ‘back on track with the EU’ as part of a move toward multilateralism.”

Doreen M. Edelman, Chair of the firm’s Global Trade & National Security group, discusses in Law360 anticipated trade issues for the incoming administration, such as the digital service tax programs increasingly imposed in Europe that are stirring controversy among Silicon Valley companies. "Digital taxes will also be discussed [with the EU], and the Biden administration will want to be part of a multilateral deal," Edelman predicts. "Biden likes to make all sides appreciate the deal, which may be difficult."

Laura Fraedrich's arrival to Lowenstein Sandler's Washington, D.C., office as senior counsel in the firm's Global Trade & Policy practice is noted in Bloomberg Law, General Counsel News, The American Lawyer, and The Washington Post. View Lowenstein's news announcement about Fraedrich's arrival to the firm.

Ed Zimmerman comments to Nasdaq in an article on the booming stock market and VC-backed growth companies going public via IPO and SPAC. Ed, who chairs Emerging Companies & Venture Capital (fka, The Tech Group) at Lowenstein Sandler and, for the last 16 years, has been an Adjunct Professor of Venture Capital at Columbia Business School notes: “One of the things we’re seeing is a lot of performance – companies are actually performing. … They weren’t necessarily performing in the 90’s and during the dot com crisis.”

On the popularity of SPACs as a means of going public, Zimmerman tells Nasdaq, “When you have people who have made lots of money who are doing [SPACs], that enhances the credibility. They’re not in a cordoned off section of the market.” Zimmerman also remarks that more mature companies are turning to SPACs rather than IPOs: “These are companies that could IPO and are choosing a different path – that’s a meaningful difference as compared to SPACs we saw five to six years ago.” 

Lowenstein's news announcement, Anticipated Spike in Deal Activity in 2021 Makes Customized R&W Insurance Critical, Finds Lowenstein Sandler, is noted in Business Wire, About You, Asia Insurance Review, Benzinga, Financial Content, Insurance Daily News, Mainframe Consulting, MarketWatch, Morningstar, Seeking Alpha, StreetInsider.com, Yahoo! Finance, Pharma Trend, and Craft.

Rossie E. Turman III explains to The American Lawyer his reasons for moving from Skadden to Lowenstein Sandler as partner and Chair of Lowenstein Sandler’s International Finance group, with seats in the firm’s Debt Finance group and Emerging Companies & Venture Capital (fka, The Tech Group): “If you’re trying to grow, align yourself with someone else that is trying to grow. … [I]f you’re trying to succeed, align yourself with someone else that is trying to succeed.” The article notes that Turman “will work closely with the firm’s Tech Group in representing companies based in emerging markets that have interests in the U.S.” He will lead Lowenstein’s efforts with respect to companies and funds located in and doing business with Africa. He has also actively engaged in civic endeavors and supported several charities on the African continent for nearly 30 years. 

In Westlaw Today’s story about his joining the firm, Turman says his “move to Lowenstein would facilitate building out the ‘three-legged stool’ of … [my] … practice, incorporating cross-border transactions, finance and technology.” 

Private Equity Wire, Law.com International/Middle East and Africa, Reuters, Bloomberg Law, and ROI-NJ also cover Turman’s transition to Lowenstein. (subscription required to view certain content) View Lowenstein's news announcement about Turman joining the firm.

In Bankrate, Ed Zimmerman and Meredith Beuchaw of Lowenstein Sandler’s Tech Group discuss 2020’s booming tech IPO market and SPAC trend. Contrasting the current IPO market with the over-hyped bubble, Adjunct Professor of Venture Capital at Columbia Business School and Lowenstein Sandler’s Tech Group Chair Zimmerman says: “The companies that we’re seeing going public in the tech world today are performing,” adding that SPACs may be more risky. “SPACs – what happens if they clock out before they can roll out a company? They may close deals, but they may catch falling knives to complete their mandate.”

Both lawyers anticipate an impact from the upcoming election. Zimmerman advises growth equity investors, VCs and management teams that are poised to IPO “to think carefully about the timeframe for their investments and how they might deal with fallout from November.” Beuchaw observes: “Companies are prepping for potential disruptions, even if they don’t come to pass….If capital dries up, that could lead companies to take an alternative path to get into the public markets…– IPOs, SPACs.” She says, “They’re dual-tracking an entry into public markets, perhaps through a merger or acquisition.”

Ed Zimmerman, Chair and co-founder of Emerging Companies & Venture Capital (fka, The Tech Group), and Adjunct Professor of Venture Capital at Columbia Business School, is quoted in The Real Deal, discussing the lawsuit regarding the co-founding of Compass, a real estate tech startup that has raised more than $1.5 billion from investors, including Softbank. The lawsuit pertains to whether plaintiff Avi Dorfman (who, according to the court, was a co-founder of Compass), is entitled to shares of stock in Compass (reportedly recently “valued at $6.4 billion”) or solely cash damages. The case, which has been compared to the “Facebook/ Winkelvoss lawsuit,” is presently pending in New York. Zimmerman’s view: “The brokerage likely wants to avoid a fiduciary relationship with Dorfman. With shares, Dorfman would be empowered to request financial information, and it’s possible his vote would also be needed to approve a company sale. If the court awards him cash, their relationship is contractual and short-lived. They rip the Band-Aid off.”

Crunchbase News, Precision Oncology News, Pulse 2.0, and the Global Legal Chronicle report on the $118 million Series B funding for Lowenstein client MURAL, the leading digital workspace for visual thinking and remote collaboration. The Lowenstein deal team included Ed Zimmerman, Alex D. Leibowitz, Serena Ward, Brian A. Silikovitz, Darren Goodman, Mark P. Kesslen, and Carly S. Penner. View Lowenstein's news announcement about this transaction.

Doreen M. Edelman speaks to The Deal about the national security challenges raised for any American corporation buying TikTok's U.S. business. “The devil will be in all the details, and that will be something important for other companies to watch,” she says, adding that “[w]ith the Trump administration fearful that Beijing mines personal information for espionage, blackmail and stolen identities, a ban on foreign access to user data is likely.” She warns that CFIUS mitigation for this transaction may be necessary: “There will have to be separate servers, locations will not be in China, [and] there will be different policies and procedures that will affect the U.S. company.”

Doreen M. Edelman comments in Business Insider on the risks for venture capital firms under the Trump administration’s increased scrutiny of foreign investment, as illustrated by the executive order banning TikTok in this country and ordering its parent ByteDance to undo a years-old merger that led to the app's expansion around the world. "I don't feel that enough of the venture companies and the [private equity] backed companies in tech and data understand that this ... could be a real issue," she says.

She explains the broad reach of the Committee on Foreign Investment in the United States (CFIUS), which can not only review but also force changes to deals closed long ago. “There’s no time limit,” she says. There is also no requisite size for a company to come under CFIUS review. "There's no de minimis," Edelman continues. "There's no lower threshold." (subscription required to access article)

Law.com reports that mergers and acquisitions attorney Meredith Beuchaw has joined Lowenstein Sandler’s Emerging Companies & Venture Capital (fka, The Tech Group) as partner, noting that “[w]hile laterals for certain practice groups, such as life sciences and bankruptcy and restructuring, have been quite active during the pandemic, M&A attorney pickups have been less common.” Beuchaw says, “Joining Emerging Companies & Venture Capital (fka, The Tech Group) provides the opportunity to participate in a community of lawyers who are renowned for their creative and strategic approaches to uniting visionaries and funders.” The article goes on to note that the firm “has seen significant growth in revenue and head count over the past decade ... [and has] increased revenue by a whopping 43% from its 2011 numbers.”

Beuchaw's arrival to Lowenstein is also noted in Bloomberg Law, General Counsel News, and Westlaw Today. View Lowenstein's news announcement about Beuchaw joining the firm.

Doreen M. Edelman is interviewed by Foreign Investment Watch, a publication focused on the intersection of national security and foreign investment, which recently named her one of its top ten advisors in 2020. Edelman discusses the reasons why a CFIUS review is critical for startups, private equity, and venture fund companies, and she looks at the new real estate provisions of FIRRMA, which cover “not just investment in a U.S. business with real estate but also leases, purchased land, and concessions.” She also addresses the Trusted Capital Program, a Department of Defense program that matches prescreened investors with companies working on technology or products of national security interest. Finally, Edelman looks at reporting obligations under the International Investment and Trade in Services Survey Act, which requires all U.S. businesses to file reports identifying foreign direct investment that results in a foreign entity owning or controlling 10 percent or more of a U.S. business. 

Institutional Investor and The Wealth Advisor reference Lowenstein Sandler’s survey, Alternative Data = Better Investment Strategies, But Not Without Concerns, authored by Peter Greene with contributions from Ben Kozinn, in an article on how asset managers are using alternative data for investment decisions. The articles cite the report’s finding that more than a third of hedge funds surveyed spent more than $1 million on data annually.

In Business Insider, Kathleen A. McGee discusses why some companies backed by venture capital or public-equity investors received small-business loans under the PPP. She explains that the rules never explicitly prohibited venture-backed startups from taking part in the program and that startups do not necessarily have access to all of their backers’ capital. “There is a misconception amongst the public that if you have a VC that you are automatically rolling in money,” she says, “And if you talk to any startup, they will tell you that is absolutely not true.”

Kathleen A. McGee is mentioned in Reuters and The New York Times in an article about companies that raised funds in 2020 through private equity or venture capital investments but that also applied for and received government relief through PPP loans during the COVID-19 pandemic. The piece notes that McGee “has advised companies that if they have cash in the bank that will sustain them for a year, then it could be a red flag for regulators later.”

Doreen M. Edelman discusses the increase in CFIUS filing requirements and regulatory scrutiny that private equity firms face for deals involving foreign capital in Fundfire. She notes the reputational impact for companies in addition to the risk of civil and criminal penalties. Edelman says, “[If] you cannot find a way to mitigate with the U.S. government and unwind your deal to a certain extent to reduce the national security issue, you can have to divest, or the foreign party could have to divest from the U.S. business. … It’s just time, money, and embarrassment." (subscription required to access article)

Dealreporter spoke to Doreen M. Edelman about a new Treasury Department proposal that will clarify when inbound investors of U.S. critical technologies need to make a mandatory filing with CFIUS. She says this will narrow the definition of transactions covered by the Foreign Investment Risk Review Modernization Act, making it less “fuzzy” and subjective. She adds that the “same analysis that parties have used to determine whether they are subject to export controls will help them determine whether their CFIUS filings are mandatory or not.” (subscription required to access article)

Lowenstein's representation of PeakSpan Capital in an investment transaction in which PeakSpan, Morgan Stanley Expansion Capital, and others invested more than $42 million in Ecwid is noted in the Global Legal Chronicle. The Lowenstein team was led by Anthony O. Pergola and Juan B. Soto and included Ifat Lipman, Joon Hwan Kim, and Serena Ward, with support from Darren Goodman, Eric Jesse, Leah Satlin, Sophia Mokotoff, and the firm’s Global Trade & National Security team (led by Doreen M. Edelman), among others. View Lowenstein's news announcement about this transaction.

Aircall's $65 million Series C funding round, the result of an international team from Osborne Clark (including Lowenstein Sandler) advising DTCP's Venture and Growth Fund II, is noted in TechCrunch, Inside Intercom, Business VoIP, Venture Capital Journal, SiliconANGLE, Silicon Republic, and VentureBeat. (The Lowenstein team was led by Anthony O. Pergola and Alex D. Leibowitz, along with Matthew W. Stichinsky and Jenna-Marie Tracy, and the firm’s Global Trade & National Security team (led by Doreen M. Edelman), among others.) View Lowenstein's news announcement about this transaction.

Lowenstein's representation of Aspiration Partners, Inc. in its $135 million Series C financing round is noted in the Global Legal Chronicle. The Lowenstein team was led by Anthony O. Pergola and Chandra K. Shih and included Juan B. Soto and Christopher T. Pham. View Lowenstein's news announcement about this transaction.

Fortune reports that Lowenstein client Aspiration Partners, a fast-growing financial firm with a conscience, has secured $135 million Series C financing, bringing total funding raised to date to more than $200 million. The Lowenstein team was led by Anthony O. Pergola and Chandra K. Shih and included Juan B. Soto and Christopher T. Pham.

Ed Zimmerman, partner and Chair of Emerging Companies & Venture Capital (fka, The Tech Group), is quoted in Business Insider discussing the SBA’s issuance of new rules and guidance that may retroactively disqualify many venture-backed startups from receiving small business loans as part of the federal government’s coronavirus relief effort. Zimmerman notes that some companies are already paying back funds they received in response to the new rules after being encouraged to apply for the program by Treasury Secretary Steve Mnuchin. He states that the SBA and Treasury Department have “really muddied the water” with the latest guidelines. (subscription required to access article)

Ed Zimmerman and Kathleen A. McGee of Lowenstein’s Emerging Companies & Venture Capital group are quoted in The New York Times and Reuters on the risks for venture-backed startups seeking government stimulus aid. McGee warns companies with large cash reserves that applying for SBA loans now could “probably … be a flag raised for regulators who are combing through these applications at another time.”  Zimmerman also advises caution: “One thing that I have said to one or two clients is you might not like me very much today or in three months, but I think you’ll like me four years from now when you’re reading about investigations and private lawsuits in the paper and you don’t have this in your background.”

In Built In, Ed Zimmerman, Kathleen A. McGee, and Kimberly E. Lomot discuss the confusion regarding startups' eligibility under PPP for SBA loans, including how venture capital-backed growth companies should consider certifying “need” under the CARES Act. “The reporting in the press was, ‘Startups are totally ineligible or almost totally ineligible,’” says Zimmerman. “But that’s not what the law says. That’s analysis under Section 103, and the proper way to do the analysis is under 301.” He goes on to clarify under what conditions “negative control” by minority owners may constitute affiliation so as to bar PPP loan eligibility, and how to avoid this through irrevocable waivers or amended charters.

Both Zimmerman and McGee emphasize the importance of documentation. McGee, former Bureau Chief at the New York State Attorney General’s Office, explains the potential risk of future prosecution for companies applying for PPP without having properly assessed the “necessity” certification: “If it is demonstrable on the budget in the Excel spreadsheet you’re keeping that things are going to get much tighter because of COVID-19, then I think you’re justified. … But you have to have that good faith justification. If you have a year of bank, it’s probably going to be a flag raised for regulators.”

Lomot, who has years of experience counseling both borrowers and lenders on SBA loans, also urges caution in taking the certifications seriously: “eagerness to claim available funds…could get startups in trouble if they’re not applying in good faith.”

In Inc., Matthew J. Moisan praises the SBA’s clarification of PPP eligibility for VC-backed startups as helping create “a fast, inexpensive process for the companies.” The SBA now defines an affiliate as an investor who can block actions by a startup's board of directors; if the investor relinquishes that right, the business is no longer considered an affiliate and will have a better chance of meeting the headcount requirement and eventual success in its loan application.

Dotan Barnea, Co-chair of the firm’s Israel Practice Group, is quoted in Globes discussing the eligibility of Israeli startups and growth companies for assistance from the United States’ recent $2 trillion-dollar federal program for small and medium-sized businesses. He says, "Israeli startups with significant activity in the United States influenced by the COVID-19 crisis should definitely look at the PPP loans,” although he cautions that applicants must show that the management of the company was done by American citizens or green card holders.

Doreen M. Edelman is quoted in The Wall Street Journal’s article on calls to delay or roll back tariffs during the COVID-19 pandemic, which are currently being determined on a case-by-case basis. She notes: “Having a tariff that is intended to punish China, but is being paid for by middle-America consumers who may currently be out of work, seems unfair at best and counterproductive.” (subscription required to access article)

The arrival of former U.S. Treasury national security lawyer Christian C. Contardo to Lowenstein’s Global Trade & Policy practice in the firm’s Washington, D.C., office is noted in Bloomberg Law, Washington Business Journal, General Counsel News, The Washington Post, Reuters, and The Deal. Contardo has over a decade of experience in federal agencies such the Department of Homeland Security, Immigration and Customs Enforcement, and Treasury, including with the Office of Foreign Assets Control (OFAC) and the Committee on Foreign Investment in the United States (CFIUS). 

In Tax Notes, Doreen M. Edelman comments on requests made by U.S. trade groups asking the Trump administration to remove section 301 tariffs in light of the financial uncertainty surrounding the coronavirus pandemic; she notes that exclusions alone may not be sufficient to help U.S. businesses. “These tariffs were intended to hurt China, but trade policy experts knew when the announcement was made that the administration was mixing apples and oranges," she says. "The companies were to 'take one for the team' and take the long view that the policy to alienate China was a good policy. The effect of the virus on retail companies will put the icing on the cake for retail companies.”

In Corporate Counsel (February 25, 2020), Doreen M. Edelman, Chair of Lowenstein’s Global Trade & National Security group, discusses why GCs of financial services companies focused on cryptocurrency, payment systems, mobile banking, and insurance-related technologies need to understand the new changes in regulations governing reviews by the Committee on Foreign Investment in the United States [CFIUS] of foreign investment transactions. She says, “This is such an expanded group of companies because the way CFIUS looks at this now is like this is an episode of ‘Homeland,’” adding that “something else GCs ought to know is that the risk may be bigger for the buyer than the seller. It depends on how the agreement is written and what the investment is.” Edelman adds, “Also, there is no de minimis on this. If it is a $3 million investment, you still have to consider CFIUS.” She remarks that if she were an in-house lawyer, “I would want to have [the transaction] reviewed initially and get something in writing that I had someone review it and tell me what my risks are if I don’t file, or why I don’t need to file [for a CFIUS review] in case the government comes knocking on the door later.” Furthermore, another Corporate Counsel article (March 10, 2020) by global trade lawyers from Kirkland & Ellis references Edelman and Abbey E. Baker’s piece, “Did ‘Silicon Valley’ Get CFIUS Right? Can It Really Ruin Everything?,” where they observe how the HBO show’s writers misunderstood how CFIUS actually functions.

Pensions & Investments features comments by Ed Zimmerman, partner and Chair of Emerging Companies & Venture Capital (fka, The Tech Group), on how the hunt for potential unicorns by venture capital funds has resulted in a “lack of discipline” and an increase in vanity valuations. He says, “These valuations are not supported by the recent transactions of comparable companies or by any other metric. … [M]oney is being spent by some managers based on the need to deploy capital.” (subscription required to access article)

AltAssets and GlobeNewswire report on Lowenstein’s representation of One Inc. in the company’s recapitalization led by Great Hill Partners. The Lowenstein deal team included Kathi A. Rawnsley, Darren Goodman, Brian A. Silikovitz, Megan Monson, Chandra K. Shih, Sarah Gore, Christopher T. Pham, Kristin V. Taylor, and Chad M. P. Weeks.

Doreen M. Edelman, Chair of the firm’s Global Trade & National Security group, addresses the risks for U.S. dealmakers posed by the new rules implemented by the Committee on Foreign Investment (CFIUS) in an article in The Deal. The February 13^th implementation of the Foreign Investment Risk Review Modernization Act, or FIRRMA, extends the authority of the Committee in ways that will impact “[t]ech startups, private equity firms, hedge funds, C-suite executives and other stakeholders,” says Edelman, warning that “transactions could be jeopardized if parties don’t fully understand the new regulatory regime adopted by the Treasury Department, which oversees the nine-member government panel.” She adds that stakeholders must carefully classify their products and technologies; in “some cases, tech companies may not realize they have Chinese investment that could attract the committee’s attention or may wrongly assume that a small stake isn’t a concern.”

Ed Zimmerman’s comments are featured in The New York Times, Reuters, Deal Street Asia, and Business News World in an article on market conditions for mergers, acquisitions, and financing for late-stage startups and tech growth companies in the wake of WeWork’s failed IPO. Zimmerman, Chair of Lowenstein’s Tech Group, observes that overfunded growth companies could clog the market for venture-backed M&A: "How do you buy a company with $400 million or $800 million of liquidation preference for under a billion dollars?” (subscription required to access The New York Times article)

Doreen M. Edelman contributes her 2020 predictions on potential legal issues in international trade in Law360. She notes that the Commerce Department has still not developed guidance on a rule, announced in 2018, on which “emerging and foundational technologies” are subject to export controls. She warns that, to date, many owners and developers of, and investors, in technology such as artificial intelligence, 3-D printing, quantum computing, and robotics “have not focused on export control requirements for these technologies. … Thus, these companies must quickly learn when export controls apply” to them to ensure compliance. (subscription required to access article)

Max Karpel's arrival at Lowenstein as a partner in the Investment Management group is noted in Bloomberg Law – Big Law Business, General Counsel News, NJBIZ, Reuters, and The Deal. (subscription required to access certain content) View Lowenstein’s news announcement about Karpel joining the firm.

Lowenstein's representation of ACV Auctions in its $150 million late-stage venture capital financing is noted in the Global Legal Chronicle. The Lowenstein team included Anthony O. Pergola, Dotan Barnea, Joon Hwan Kim, and Cecily Larison. View Lowenstein's news announcement about this transaction.

The transition of leadership of Lowenstein Sandler’s D.C. office to Antitrust/Competition partner Zarema A. Jaramillo was covered in Bloomberg Law – Big Law Business, General Counsel News, The Hill, The Deal, and The Washington Post. Jaramillo is set to take over on January 1, 2020, from Jeffrey Blumenfeld, who founded the D.C. office in 2014 and will remain Co-chair of the firm’s Antitrust/Competition practice.

Bloomberg News, Yahoo! Finance, BNN Bloomberg, Financial Advisor Magazine, fin24, MSN Money, The Baltimore Sun, and Daily Herald include comments by Ed Zimmerman, Chair of Emerging Companies & Venture Capital (fka, The Tech Group) and professor of venture capital at Columbia University’s Graduate School of Business, in the article “A Prenup Is the Latest Must-Have for Tech Startup Founders in Love.” “We have companies where the founder is the brand, and trust and credibility are core to the business,” says Zimmerman. ‘“If you are investing in a company because you think the founder is amazing,” news of that individual’s distracting divorce or custody battle can be alarming. Zimmerman further explains other personal difficulties which can impact a startup: “It would be great if we lived in a world where people who had marital problems didn’t manifest those problems by hitting on or dating people who worked at their company…. Those kinds of things tend to be more problematic than who gets the shares.”

Jeffrey Cohen is quoted in The New York Times in an article on the fate of startup companies that do not succeed or fail quickly. Cohen observes that venture capital investors may let a company struggle for years: “They’re willing to let it ride a little longer to see whether it explodes.” (subscription required to access article)

Valeska Pederson Hintz is quoted in Bloomberg Law discussing the $20.8 million valuation of Slack, a work-messaging tech unicorn, prior to its direct listing. She explains that, when a company pursues a direct listing instead of an initial public offering, “you need enough brand recognition and people need to understand what your product is.” She also suggests that Slack should look to the Spotify precedent and disclose stock prices from recent private sales in its registration statement ahead of going public: “You have to really help people with price discovery.” (subscription required to access article)

Lowenstein Sandler’s VentureCrushParis is featured in Forbes. The article discusses the vast differences in raising venture capital in Europe versus the United States, noting a valuation gap and quoting Dataiku’s CEO and co-founder Florian Douetteau. VentureCrush brings together founders and venture capitalists that allow startups to build the right network and gain visibility within the industry. Learn more about our upcoming VentureCrush events here.

Lowenstein’s 2019 promotion of seven lawyers to partner and six to counsel (including three women in each category) is noted in Bloomberg Law – Big Law Business. These promotions are also highlighted in LawFuel, The Deal, and the Commerce and Industry Association of New Jersey’s (CIANJ) Business Beat newsletter, with Lesley P. Adamo, Dmitry Andreev, Marc S. Kurzweil, James B. O’Grady, Eileen Overbaugh, Peter Slocum, and Julie Levinson Werner highlighted as newly elected partners and Brandon Fierro, Joseph G. Jones, Robert Lynn, Brianne Perlman, Nedda N. Salehi, and Leah Satlin listed as promoted to counsel. Gary M. Wingens is quoted regarding the critical role these lawyers will play in the firm’s continued success. Law360 notes our partner elevations in an article highlighting firms' Q1 promotions. (subscription required to access certain content) View Lowenstein’s news announcement about these promotions.

Lowenstein’s representation of Dataiku its $101 million Series C funding round is profiled in the Global Legal Chronicle. The write-up notes the Lowenstein team: Ed Zimmerman, Evan M. Bienstock, Dotan Barnea, and Laura Cicirelli. View Lowenstein’s news announcement about this representation.

Valeska Pederson Hintz is quoted in Forbes in which she discusses Slack, a work-messaging tech unicorn, and the company’s plan to forego a traditional initial public offering (IPO) in favor of a direct listing this year. The article describes this as an unconventional move that could encourage other tech unicorn companies to consider a direct listing in lieu of an IPO, though this isn’t likely to become a mainstream trend. Pederson Hintz suggests that large tech unicorns are uniquely positioned to take advantage of a direct listing for their market debut because they are often well-capitalized and have brand recognition (Wealth Daily also quotes Pederson Hintz on this point). She states that direct listings are faster and cheaper than traditional IPOs. (subscription required to access article)

Lowenstein Sandler is noted as lead counsel to Vesey Street Capital Partners, LLC (VSCP) in their recapitalization of Elite Body Sculpture as published in The PE Hub Network, Cision PR Newswire, and The Business Journals (Lowenstein deal team: Marc B. Kramer, Brooke A. Gillar, Steven E. Siesser, Lowell A. Citron, Michael Walutes, Lesley P. Adamo, Eileen Overbaugh, Elisia M. Klinka, Nicholas Gonski, Darren Goodman, Megan Monson, Eric Jesse, Alanna Sandoval, Jeffrey M. Shapiro, Jack Sidorov, Mark P. Kesslen, Paul M. Krueger, Michael A. Buxbaum, Norman W. Spindel, Mary J. Hildebrand, Bryan Sterba, Manali Joglekar, and Stuart S. Yusem.)

Benjamin Kozinn points to a confluence of issues present in a cracked economy which led to the 2008 global financial crisis in an interview with the Hedge Fund Law Report. In the first of a two-part series, Kozinn provides an insider’s assessment of the crisis—the causes, the role that hedge funds played, and the regulatory changes in its aftermath (including passage of the Dodd-Frank Act)—and the new focus on counterparty risk. Kozinn also provides insight into the evolution of hedge fund managers as a result of the crisis and the issues behind increased levels of scrutiny. In part two of the series, Kozinn discusses the growing importance of chief compliance and chief operating officers since 2008, growing institutionalization and scrutiny of the hedge fund business, and factors behind a 2018 decrease in fund launches. In addition, Kozinn looks at the state of financial regulation and why the next downturn will reinvigorate hedge funds and spur a search for fresh talent.

The Washington Post, The American Lawyer, Global Trade Review, Bloomberg Law – Big Law Business, Law360, The National Law Journal, the New Jersey Law Journal, International Trade Today, The Deal, TXF, and citybizlist highlight the launch of Lowenstein’s Global Trade & Policy practice in the firm’s Washington, D.C. office and the arrival of Doreen M. Edelman (practice chair), Abbey E. Baker, Andrew Bisbas, and Megan C. Bodie. The Global Trade & Policy practice will provide U.S.-based clients, foreign clients, and foreign-owned U.S. companies with compliance and policy development services. Areas of emphasis will include import tariffs and classifications, OFAC regulations and sanctions, CFIUS review protocols, and export controls. (subscription required to access certain content)

Capacity Media, The PE Hub Network, Fiber Optics Online, TMCNet.com, PR Newswire (May 30, 2018; September 4, 2018), and TeleGeography note Lowenstein Sandler’s representation of Hudson Fiber Network, portfolio company of Tiger Infrastructure Partners, in its all-cash merger agreement with ExteNet Systems, Inc. (Lowenstein deal team: Michael A. Brosse, Justin Gindi, David Leit, Michael Walutes, Megan Monson, Darren Goodman, Alexandra S. Droz, Eric Jesse, Lesley P. Adamo, and Marc S. Kurzweil.)

The Global Legal Chronicle notes Lowenstein Sandler's representation of Safe Banking Systems (SBS) in its acquisition by Accuity. The write-up lists the Lowenstein team: Raymond P. Thek, Alex D. Leibowitz, Pooja Patel, Mitchell McDonald, and Zarema A. Jaramillo. View Lowenstein’s news announcement about this transaction.

The Global Legal Chronicle notes Lowenstein Sandler’s representation of Integral Ad Science in an article discussing Vista Equity Partners’ majority-stake acquisition of the company. The article notes that the Lowenstein deal team was led by Raymond P. Thek and included Peter H. Ehrenberg, Ed Zimmerman, Colin J. Kirby, Shimite Obialo, Sarah Gore, Elias Kwon, Alex Galev, Christina Lee, and Kristen Nicol, as well as support from specialists in Tax: Brian A. Silikovitz and Sophia Mokotoff; Employee Benefits & Executive Compensation: James E. Gregory, Darren Goodman, Megan Monson, and Eric Margulies; Intellectual Property Litigation: Mark P. Kesslen and Lisa A. Harvey; Antitrust & Trade Regulation: Zarema A. Jaramillo; and Privacy & Cybersecurity: Mary J. Hildebrand. View Lowenstein’s news announcement about this transaction.

Bloomberg Law – Big Law Business cites Mark P. Kesslen and his team members for tying in third place at the Diversity in Law Hackathon at Harvard Law School on June 22, 2018. Kesslen’s team proposed In.C—short for “inclusive culture”—which aims to help employers track and measure employee feedback on diversity and inclusion factors such as a sense of belonging and shared trust. Used broadly enough, organizations can cite their In.C score to demonstrate to clients, customers, competitors, and the public that they are serious about diversity and inclusion.

The Global Legal Chronicle profiles Lowenstein's representation of Dreams, a cutting-edge mobile application, in the negotiation of various content licensing agreements with BBC, Discovery, Bloomberg, and other major content licensors. The article also notes our firm's representation of Dreams in its Series A financing. The write-up lists the Lowenstein team: Eric Weiner, Matthew N. Holbreich, and Christopher C. Henry on the Series A financing and Matt Savare on the content licensing transactions. View Lowenstein’s news announcement about this transaction.

The Hedge Fund Law Report conducts an in-depth interview with Peter D. Greene regarding the GDPR’s impact on private funds’ use of alternative data. Issues addressed include how the GDPR might affect how funds buy and use alternative data; how the GDPR may impact funds’ internal generation or gathering of alternative data; funds’ due diligence in data vendor selection; and immediate steps funds can take to ensure GDPR compliance. 

American Banker and PYMNTS.com quote Mark P. Kesslen in an article discussing USAA’s patent infringement lawsuit against Wells Fargo. In both articles, Kesslen notes that this is likely the first time one bank has sued another for patent infringement. In American Banker, he indicates that the suit may pressure other banks to reach a quicker resolution with USAA. (subscription required to access American Banker)

MarTech Series, Markets Insider, 4-traders.com, The PE Hub Network and citybizlist highlight Lowenstein Sandler as legal counsel to global software company Integral Ad Science in its majority-stake acquisition by leading private equity firm Vista Equity Partners.

Cosmetics Technology and Business Wire note Lowenstein Sandler as legal counsel to New Mountain Capital and portfolio company Topix Pharmaceuticals, Inc., in their acquisition of DERMA E. (Lowenstein deal team: Marita A. Makinen, David L. Goret, Matt Savare, Michael Walutes, Darren Goodman, Eric Jesse, Manali Joglekar, Marc S. Kurzweil, Kimberly E. Lomot, Justin Gindi, Tim Janas, Megan Monson, Leah Satlin, and Jacob D. Unger.)

Law360 quotes Ed Zimmerman on the pent-up demand for IPOs by an increasing number of venture-backed technology companies. (subscription required to access article)

WSJ Pro Venture Capital quotes Julie Levinson Werner on how the National Venture Capital Association’s (NVCA) issuing revised model human resources policies to combat sexual harassment in the VC industry is part of a broader trend across sectors to address and prevent harassment. As a member of the NVCA HR Policy Subcommittee, Werner assisted in drafting and reviewing the model policies. (subscription required to access article)

The Wall Street Journal quotes Ed Zimmerman on the challenges of starting new business lines in the context of Airbnb’s efforts to launch their new Experiences offering. (subscription required to access article)

In a three-part article, the Hedge Fund Law Report quotes Peter D. Greene and Benjamin Kozinn regarding fund managers’ collection (often through vendors) and use of big data, liability risks associated with acquisition and use of material nonpublic information, and data privacy issues surrounding access to and use of personally identifiable information.

Technical.ly Philly includes Brittany T. Esser in an exclusive list of 14 lawyers deemed to be made in the mold of Steve Goodman, a Philadelphia lawyer whose longtime dedication to representing technology and emerging growth companies earned him the moniker, “the godfather of Philadelphia startups.” Esser’s listing notes that she was deeply involved in Philadelphia’s startup community, including by helping to organize Philly New Technology Meetup and by working for Robin Hood Ventures, a leading angel investment group.

Jeffrey Cohen comments in Forbes regarding the recent explosion of startup technology companies filing for bankruptcy protection. Cohen points to intellectual property assets and the less-public bankruptcy procedure, assignment for the benefit of creditors (ABC), as catalysts for the increase in Chapter 11 filings.

Bloomberg View cites a Forbes Tech article by Ed Zimmerman, Peter Ehrenberg, and Valeska Pederson Hintz on SEC Rule 701 in its discussion of robot funds and bank regulation.