CARES Act, PPP & Startups: Important Updates For Founders
Friday, April 3 was supposed to be the orderly launch of the CARES Act Paycheck Protection Program (PPP) providing $349B of urgently needed funding to struggling startups and small businesses. Last Friday was anything but orderly. Our three special guests, a leading banker, attorney, and investor, are all on the front lines helping startups to secure emergency funding. Jim Marshall from Silicon Valley Bank (SVB), Kathryn Hickey from PilieroMazza, and Duncan Davidson from Bullpen Capital share the most up-to-date information and what founders need to know and do to get the assistance outlined in the CARES Act.
In this episode, guests discuss…
Biggest mistakes on applications for the PPP
What if you have a different deposit bank and lender bank?
What are the timelines on loans to be processed?
Will banks run out of funds?
What triggers the SBA “affiliation” rules for venture-backed companies?
How to amend by-laws in shareholder agreements?
Should founders expect the affiliation rules to be amended this week?
Are VCs collaborating to resolve issues related to specific startups?
Will the SBA increase the forgiven amount beyond 2.5 x Average Payroll (and other qualified expenses) if the company guarantees the additional amount will go towards new hires and agrees to be audited on that?
Final thoughts on the idea of necessity and the purpose of the CARES Act
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About The Guests
Jim Marshal, Head of Emerging Manager Practice, Silicon Valley Bank
Jim has been working in the start-up ecosystem in Silicon Valley for over 20 years and has been with Silicon Valley Bank since 2012. As Head of the Emerging Manager Practice at SVB, Jim leads a team that provides general partners with tailored services and strategic guidance-from fundraising to fund operations, to portfolio company support and creative liquidity solutions. Prior to joining SVB, Jim co-founded Selby Venture Partners, a seed and early stage focused VC firm with over $130M in management from a diversified group of Limited Partners, including the US Government. In addition to having the privilege of working with several amazing founders throughout his career, Jim is proud to have been an early investor in Pandora (NYSE:P), BigFix (Acq by IBM for $400M), Coremetrics (Acq by IBM) and Active Semiconductor, Inc. Jim is a native Californian who serves on the Leavey School of Business Advisory Board at Santa Clara University. Jim holds an M.B.A. from Pepperdine University, where he was honored as a Distinguished Alumnus in 2007, and a B.S. in Finance from Santa Clara University.
Duncan Davidson, General Partner, Bullpen Capital
Duncan is a serial entrepreneur who most notably founded Covad Communications (the leading independent DSL provider, went public and reached a market value of $9B) and Sky Pilot Networks (developer of outdoor wireless mesh systems, acquired by Trillium in 2009 for connectivity to smart meters). He served as the SVP of Business Development at InterTrust and led the IPO in 1999 and the secondary in 2000 (InterTrust reached a $9B market value in 2000). He spent four years as a managing director at VantagePoint Venture Partners where he focused on digital media and telecom investments including Widevine (acquired by Google) and Livescribe. Prior to Bullpen, he co-founded one of the first mobile social app companies, Xumii, later sold to Myriad Group and now powering over 200M users in the developing world. At Bullpen he focuses on SaaS, blockchain and IoT investments, and is an advisor to or sits on the boards of Modal, Filament, Hologram, Illumeo, SpaceIQ, Verbling and Wag Labs. He received a Sc.B. in physics/math from Brown University, with Honors, and a J.D. magna cum laude from Michigan Law School, where he was Order of the Coif and a member of the Law Review.
Kathryn Hickey, Partner, Piliero Mazza
Kathryn concentrates her practice primarily in general business, mergers and acquisitions, venture capital investments, and commercial contracting. She regularly counsels companies on a wide range of legal issues, including entity formation and structure, corporate governance, employment issues, commercial leasing, licensing and regulatory compliance. Ms. Hickey also represents companies in the negotiation and implementation of institutional financing and commercial loan transactions with large institutional lenders. As part of her securities practice, Ms. Hickey has counseled clients on compliance with federal securities laws and has represented clients in connection with offerings of debt and equity securities and private placements. Ms. Hickey has represented companies in matters including licensing, acquiring and divesting intellectual property, regulatory compliance, commercialization of intellectual property, joint ventures and business alliance agreements. Ms. Hickey helps businesses with transactions and contracts in the government contracts space as well. Her work includes negotiating and drafting teaming agreements, collaboration agreements, joint venture agreements, and subcontractor agreements for both prime contractors and subcontractors. Ms. Hickey also structures asset and equity transfer deals and coordinates contract novations in the government contracting space. Additionally, she has worked with tribal entities in various acquisitions and corporate structuring transactions. In this context, Ms. Hickey has addressed issues involving waivers of sovereign immunity, tribal entity structure and governance, and asset management.