Introduction to E-Commerce Law

Module 5 - Online Contracting, Commercial Online Laws, and Capital Rules

c. Global Commercial - Capital

NARRATIVE

ASSIGNMENTS

SUPPLEMENTAL DOCUMENTS

IBLS ARTICLES

NARRATIVE

Venture Capital is a short hand term that covers corporate funding of e-commerce during the start-up faze. Venture Capitalism exits in a flurry of “term sheets”, “private placements”, “management team organization” and equity roundup that hopefully will lead to “Going Public” through an IPO (Initial Public Offering). Once beyond the IPO other types of financing may come into play that link bank financing packages and equity partners in Leverage Buy Outs or Takeovers. “Bridge loans” and “mezzanine financing”, are the tools used for interim financing by Investment Bankers in the game of mergers and acquisitions, but I get a little ahead of the picture.

The main concern for the e-commerce entrepreneur is to maintain control of the enterprise throughout the funding rounds of capitalization. Once the enterprise leaves the private financing arena reporting company health becomes a necessity. When embarking on the IPO, the enterprise must rise to a new level of corporate reporting. In the U.S. the main interested party will be the Securities and Exchange Commission. Mandatory disclosure will kick in upon a company going public.

Public Company Reporting Requirements are found principally in the Securities Acts of 1933 and 1934. Reports like the 10K and 10QSB, 8K, 13D and Prospectuses become the bread and butter of investment disclosure requirements. EDGAR filing of documents will become routine. See also: The Securities Lawyer’s Deskbook, from the Center for Corporate Law, University of Cincinnati College of Law.

If that weren’t enough, in October 2000 a new regimen came into effect. The Securities and Exchange Commission's Regulation Fair Disclosure, Reg FD for short. That an the Plain English requirements of the SEC mean a new beginning for disclosure. The goal is to provide transparency in the market and more leverage for investors’ rights, as well as combating insider trading.

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ASSIGNMENTS

Writing Assignment. From Start-up to beyond the IPO.

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SUPPLEMENTAL DOCUMENTS

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IBLS ARTICLES

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