Serving Clients Who Innovate

Start-Up Universe: June 2022 Analysis

Public Valuation Drop Finally Trickling Down

Investors are now positioning themselves to seize upon lower public company valuations to grab larger stakes in promising start-ups.

The pressure this will create on emerging companies may finally slow the incredible rate of increase in executive compensation of the past years.

Packages grew so much so quickly that many players became relatively complacent about optimizing their compensation terms for their current rolls.

With the future value of many existing RSU grants now potentially halved, the pain is going to start showing up on those stock portals.

This will be the third "down" cycle I will experience as a member of the tech industry since 1996. My personal predictions are not important, as there are many sources of crystal ball pronouncements available.

I do know that when belts tighten, surprising behavior emerges. My favorite ParanzinoLaw matters involve contentious situations that require real lawyering to obtain the right results.

When you can't believe what "they" did, let's talk it through and determine whether we see a path to success that others may not.

Doing tech deals, we often sing "kumbaya" together, or at least we pretend to.

When times turn bad, the world goes back to there being winners, and losers.

Let's talk real-life war stories and see whether there is a way for you to win without burning the bridge down behind you.

Termination of employment is much more than just severance pay, for executives in emerging growth industries.

The loss of future vesting opportunity (whether stock options or restricted stock units (RSUs)), unpaid bonuses, sales commissions, time to exercise, health benefits and professional reputation and public messaging are just the tip of the iceberg.

As a lawyer in private technology law practice for over twenty years, as General Counsel and Chief Legal Officer of start-ups for five 5 years and 'BigLaw' Wall Street litigator for ten, Gary Paranzino has handled, from all sides, nearly every circumstance in which an executive could find themselves.

Take a moment and review a sampling here -- then compare that to the competition.

If you are in the estimated 95% who prefer to go it alone, I hope this article is of some assistance in your battle.

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© Gary A. Paranzino 2022