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New Ventures Strategic Partner Spotlight: Hannah Caldwell

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Hannah is a managing associate in the firm’s Labor &amp; Employment practice group. She counsels employers on a broad range of labor and employment issues and protects their interests in litigation and administrative proceedings. Hannah is experienced in matters involving discrimination, harassment, wrongful discharge, hiring and terminating employees, trade secrets and restrictive covenants. Her practical and timely advice addresses a comprehensive range of business issues and is designed to help employers mitigate risk and ensure compliance with applicable laws and regulations.

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Business Groups Challenging New FTC Rule Banning Noncompete Agreements

On April 23, the Federal Trade Commission (FTC) issued a final rule that is a near total ban on employers’ use of noncompetition agreements. The rule not only bans the use of such agreements in the future, but also voids almost all existing agreements. Thompson Hine published an <a href="https://www.thompsonhine.com/insights/business-groups-challenging-new-ftc-rule-banning-noncompete-agreements/">alert</a> which outlines when the rule is expected to take effect and who may be impacted by this recent decision.

If you are interested in learning more about this unfolding legislation, join our Thompson Hine lawyers for an informative <a href="https://register.gotowebinar.com/register/2710507707480646232">webinar</a> on May 1 which will examine the issues associated with the recently issued rule on noncompetes.

Startups Streamlined – Cleveland Event Recap

Our second Startups Streamlined took place earlier this month at the Thompson Hine LLP office in Cleveland. The panel, led by <a href="https://www.thompsonhine.com/professionals/lindsay-karas-stencel/">Lindsay Karas Stencel</a>, featured <a href="https://jumpstart.vc/team/hardik/">Hardik Desai</a> of JumpStart Ventures and Thompson Hine attorneys, <a href="https://www.thompsonhine.com/professionals/alexis-j-kim/">Alexis Kim</a>, <a href="https://www.thompsonhine.com/professionals/hannah-e-caldwell/">Hannah Caldwell</a> and <a href="https://www.thompsonhine.com/professionals/thomas-r-butchko/">Thom Butchko</a>. The panel talked about the state of vc funding in Cleveland, employment issues given the FTC’s position on noncompetes, 1202(b) QSBS, and the pros and cons of venture debt. The discussion was insightful and addressed several real-time issues impacting startups thanks to the thoughtful Q&amp;A from the packed audience. We had a blast learning, networking and engaging. Our next stop is Cincinnati this summer, and we hope to see you there!

On April 12, the Polsky Center for Entrepreneurship and Innovation hosted Incorporation/Organization Day, where entrepreneurs who have been operating their businesses, as well as developing brand new ideas and ventures, had the opportunity to meet with licensed attorneys to establish their legal Illinois entities. During the 2-hour event, 34 teams/individual entrepreneurs met with eight attorneys, and nine new businesses formed on the spot. We were proud to be represented by New Ventures attorneys <a href="https://www.thompsonhine.com/professionals/aisling-susan-olaoire/">Aisling O’Laoire</a> and <a href="https://www.thompsonhine.com/professionals/daniel-burns/">Danny Burns</a> who met with several of these entrepreneurs.

CTA, ERA, SEC – Oh My! Balancing Disconnected Regulatory Schemas in Venture Capital

By <a href="https://www.thompsonhine.com/professionals/lindsay-karas-stencel/">Lindsay Karas Stencel</a> and <a href="https://www.thompsonhine.com/professionals/jacob-j-denham/">Jacob J. Denham</a>

Venture capital fund advisers (and their funds) that are registered with the SEC are exempt from CTA reporting. However, recent SEC communications indicate that funds with less than $25 million in assets under management cannot register as exempt reporting advisers (ERA), leaving a situation in which the small and emerging funds that can least afford the additional costs of CTA reporting may be the only venture capital funds required to do so, while the large funds have no such burden. <a href="https://www.thompsonhine.com/insights/cta-era-sec-oh-my-balancing-disconnected-regulatory-schemas-in-venture-capital/">Continue reading</a>.

Entering the World of Business Certification

By <a href="https://www.thompsonhine.com/professionals/jasmin-hurley/">Jasmin Hurley</a>, <a href="https://www.thompsonhine.com/professionals/andres-m-vera/">Andrés M. Vera</a> and <a href="https://www.thompsonhine.com/professionals/lindsay-karas-stencel/">Lindsay Karas Stencel</a>

Obtaining business certification can be a vital part of a company’s success in competing for government contracts set aside for small businesses and businesses owned by people from historically underrepresented groups. In this article, we provide an overview of various federal, state/municipal and private sector certification programs and their eligibility requirements. <a href="https://www.thompsonhine.com/insights/entering-the-world-of-business-certification/">Continue reading</a>.

Data Insights: First Quarter Has Ended – What Did We Learn?

Valuations rose—but not for late-stage: Median pre-money valuations ticked upwards for most venture stages but declined (albeit on low round volume) for Series D and E+.

Round sizes grew: The median amount of cash raised was up for seed, Series A, Series B, and Series C, with particularly sharp increases in the priced seed and Series C stages.

Although the final numbers on total rounds and capital raised are not yet available for Q1, it looks like another quarter of modest growth for venture capital activity is likely.

To view the full chart, click <a href="https://carta.com/blog/first-cut-state-of-private-markets-q1-2024/?utm_medium=email&amp;utm_source=blast&amp;utm_campaign=20240404-amer-general-data_newsletter&amp;utm_content=&amp;mkt_tok=MjE0LUJURC0xMDMAAAGSSYKiVhhXOjLmNfC21a4Iutj7MNETb1Z6FKKitz7H8hQQMtMEjKwpylavcJPeiIq-9ZxGf0U1Bfo3VulR5uiQ3-K_Cts_ZGQIVvOojL0E95_eOLAwx0b8KzWwZg">here</a>.

***Data provided by Carta Insights

QuickLaunch: Experienced Guidance for Startups and Investors

Our QuickLaunch program is tailored to entrepreneurs, startups and investors, providing guidance on growth and funding cycles and offering cost-effective counsel on day-to-day legal matters from formation to funding to exits. Our seasoned team helps navigate the confusing waters of growth, funding, expansion and those tricky legal issues that can arise, often at fixed or budgeted pricing by using our firmwide proprietary SmartPaTH™ tool. To learn more about our tailored, value-enhancing solutions, please visit our <a href="https://www.thquicklaunch.com/">QuickLaunch</a> site.

This newsletter may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

New Ventures Update – April 2024