• Director Liability in the Age of Venture Capital Down Rounds
  • November 10, 2006 | Author: David Burton
  • Law Firms: Haynes and Boone, LLP - Richardson Office; Haynes and Boone, LLP - Dallas Office
  • Due to the current economic climate, many venture-backed companies seeking subsequent rounds of financing are seeing decreased valuations, often referred to as "down rounds." If investors in a down round are venture capitalists who are already stockholders of a corporation and who have placed their own representative on the corporation's board of directors, they have created fertile ground for a divergence of interests and an interested director transaction.