Welcome to the Teacher’s Manual materials for Business Planning: Financing the Start-Up Business and Venture Capital Financing (2d Ed. 2014) by Therese H. Maynard, William G. Coskran Professor of Law, Loyola Law School, Los Angeles, and Dana M. Warren, Patrick J. McDonough Director – Business Law Practicum, and Clinical Professor of Law, Loyola Law School, Los Angeles.
Our casebook uses a client simulation to lead students through a series of key issues in representing an entrepreneurial client, with a primary focus on financing transactions. We provide the basis for students to begin to develop the broad substantive knowledge foundation needed by a general business lawyer, as well as fundamental practice skills your students will need to be successful counsel to early stage businesses – whether they practice in Silicon Valley or on Main Street.
Now in its second edition, this casebook continues to emphasize the real world of an entrepreneurial start-up business by progressing through a sequence of problems and transactions that require students to review and analyze the details of LLC Operating Agreements and corporate Certificates of Incorporation, financing transaction documents, and the relevant state and federal statutes that are implicated in financing a growing company. Further, through the homework assignments provided in Appendix A of the casebook and the graded writing assignments included in the Teacher’s Manual materials, your students must use their analysis to actually advise the client, to revise the document, or to draft the agreement. The text and Teacher’s Manual materials also highlight the ethical responsibilities of lawyers in a transactional setting as the constituencies that make up the client change and evolve.
The casebook introduces the client and the special issues presented in the practice of transaction law. In the first unit of the course, the students work through entity selection for the new client, providing context to the entity characteristics they learned in their prior Business Associations (or its equivalent) class. A financing proposal is presented to the client using an LLC as a joint venture vehicle. We examine the LLC form not with a focus on tax benefits, but rather to understand its management, operations, and fiduciary duty issues. The students review and comment on a draft LLC Operating Agreement provided by the joint venture partner.
After rejecting financing through the joint venture, we move to the second unit, when the client determines to incorporate and the students are tasked with drafting (from precedent) the founders’ stock purchase agreements, including a company repurchase right that lapses over time. In this unit, we introduce your students to contractual terms related to securities exemptions, the mechanics of equity incentives, and the basics of intellectual property law.
Finally the client receives a venture capital investment term sheet. In the third unit, we use venture capital as a proxy for any sophisticated private investment in a small business, with a focus on the rights, preferences and privileges built into a venture capital preferred stock. We also examine the private investment process and the document package that makes up the typical venture capital financing. The final writing assignment requires the students to review and comment on drafts of a Preferred Stock Purchase Agreement and an Amended and Restated Certificate of Incorporation.
We invite you to request the credentials to examine our faculty-only, password-protected casebook webpage, which includes sample lecture notes, sample graded writing assignments (together with grading rubrics for each variation of each assignment), a sample syllabus and semester calendar, as well as additional supplemental materials.