How to avoid dilution – or, what is pre-emptive rights?

The entry of a new investor or strategic partner is a significant event in the life of a company, and often marks an important stage in its growth. But as always, a great opportunity also harbors a tangible danger, which must be identified in advance and avoided. Allocating shares to an investor or new partner in the company can lead to the company's owners finding themselves 'diluted', meaning, holding a smaller portion of...

A non-compete or freedom of occupation?

We are all familiar with this clause, commonly known as a 'non-compete clause', which is usually 'hidden' somewhere in the latter part of every employment contract, typically adjacent to clauses regarding confidentiality and general provisions. This clause most commonly includes a prohibition on the employee, usually for a period of 12 months after the termination of their employment, from 'competing' with their employer, and in its accepted wording...

What is an NDA and what is it used for?

You are facing a meeting with a potential investor for your business, and you want to interest them in injecting funds that will allow the business to continue operating and perhaps even expand. Perhaps the meeting is with representatives of another company that wants to partner with you. For example, to jointly produce a product or market a product that you manufacture. You are deliberating. What should you tell them about the business? ...

Your property requires protection.

Does your business have intellectual property? The answer is likely yes. Whether it's a trade secret (e.g., a secret recipe for making a certain product), copyright (e.g., lines of code from a computer program you developed), or even a business name/logo or a product design – it's also likely that this is an asset for which you've worked hard, and its development...

How not to lose control

Is your company experiencing liquidity problems? Does it lack capital to continue operating? Perhaps even to grow? No problem – simply inject immediate capital into the company in exchange for a portion of the company’s shares. The company might be 'a little less yours,' but it won't have cash flow problems. A magic solution? Wait! You've opened the door to the company. Who will enter? Acquiring control of the company is usually accompanied by taking a seat or…

With a contract or without a contract – that is the question?

The CEO of a company wakes up one morning and suddenly notices that some employees, who have been employed for a very long time, have not signed formal fee agreements. Instead, their employment terms are based on verbal agreements or understandings. The CEO is aware that this is an unhealthy and inadvisable situation, or someone tells him so, but he refrains from changing the situation, fearing that the mere fact of...

Technology: A NIS 6 million deal for selling cyber activity to one of Israel's largest security companies

As part of our specialization in commercial contracts, an agreement was recently signed, in which we represented our clients in a complex transaction for the sale of activity in the cyber technology field to one of Israel's largest security companies; the transaction's value stood at approximately NIS 6,000,000.

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