ensure that you fully understand the complexities of equity dilution, so you can structure funding arrangements that don’t leave you and your inventors with a shrunken stake and a big faculty relations problem. Mike Drzal is a veteran attorney who chairs his firm’s venture capital practice and handles equity deals from the corporate side of the table, and Zach Shulman is a Cornell business school professor, attorney, and managing partner of a successful venture fund. Both understand the importance of addressing equity dilution in your funding strategy, as well as the key strategies you must follow to ensure you don’t get burned. Now, in this hour-long session, they are ready to share their expertise with you. Here’s a quick look at what they’ll cover:

• Who owns University IP
  • Corporate structure/corporate ownership
  • Faculty (employee) to University (employer) relationship
  • Assignment agreements
• University Spinout Creation
  • Having the right team
  • Faculty involvement in management
  • Managing conflicts with faculty
• Key licensing terms that impact financing
  • Royalty rates
  • Exclusivity and minimum royalty payments
  • Scope of license
  • University equity position
  • Milestone payments and sublicensing fees/restrictions
• Protecting the University from future dilution
  • The “Future Funding” clause
    • Appropriate thresholds for change in equity percentage
    • How dilution affects valuation and pricing
    • Avoiding “us versus them” with founders
    • Simple terms that assure fairness
  • University’s rights to further investment
• Protecting founders from dilution
  • Terms to carefully consider:
    • cumulative dividends
    • full ratchet
    • multiple LPs (keep it 1X if you can)
    • participating PS (often hard to avoid)
    • too large and too early distributions
    • funding milestones tied to valuations
    • stock option plans