Greenberg Traurig Hosts University of Pennsylvania Law School Delegation

Posted in Event

In March a group of 49 University of Pennsylvania (UPenn) law students had the privilege of touring Israel for one week, and conducted meetings with local business, government, and legal leaders, of which Greenberg Traurig was proud to be a part. The group of UPenn students included, 1-L, 2-L, and 3-L law students, as well as international LLMs. The participating students were chosen from dozens of applicants and consisted of student leaders pursuing careers in government, corporate law, litigation, and public interest. One of the components of the trip was to introduce students to local business leaders and expose them to Israel’s innovative business environment.

Being a group of law students, there was special excitement about meetings with legal leaders such as Israeli Supreme Court Justice Esther Hayut, as well as a meeting with both Israeli and Palestinian political negotiators and hearing about the different approaches taken on conflict resolution. Among the many legal and business meetings the students attended was a reception hosted by Greenberg Traurig, where the students had a chance to meet some of the firm’s attorneys and to hear from UPenn Law School alumnus and operating shareholder of the firm’s Tel Aviv office, Joey Shabot, who spoke about the legal environment in Israel, how an international firm operates in Israel, the firm’s international platform, and other related topics. Joey hosted a Q&A session in which the students asked about the different aspects of practicing law and professional life in Israel. The group also kicked off Purim festivities with the GT team with the help of Purim accessories and sweets (with maybe a little something to drink).

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Joey Shabot Joins Israeli Prime Minister on Official China Delegation

Posted in Event

Israeli Prime Minister Benjamin Netanyahu is visiting China on a trip marking 25 years of ties between Israel and China.

A limited number of Israeli businesses were invited to join the Prime Minister and a list of Israeli and Chinese government officials, with the aim of strengthening the already powerful business relations between the two countries.

Among those invited was Joey T. Shabot, operating shareholder of Greenberg Traurig’s Tel Aviv office, who met with both Chinese and Israeli business leaders and government officials.

Dawn Zhang, co- managing shareholder of Greenberg Traurig’s Shanghai office, and Wayne H. Elowe, co-chair of Greenberg Traurig’s Atlanta Corporate & Securities Practice, joined Joey for an opportunity to learn more about the Israeli delegation and the ever developing Israel – China business ties.

Greenberg Traurig is the only major international law firm with registered, multidisciplinary offices in Israel and China.

Israeli Delegation with Israeli Prime Minister, Benjamin Netanyahu. Joey T. Shabot on far right of the third row from the top. Photo credit: Haim Zach GPO

Israeli Delegation with Israeli Prime Minister Benjamin Netanyahu. Joey T. Shabot on far right of the third row from the top.
Photo credit: Haim Zach GPO

 

Joey T. Shabot with Israeli Minister of Health, MK Rabbi Yakov Litzman

Joey T. Shabot with Israeli Minister of Health MK Rabbi Yakov Litzman

 

Joey T. Shabot with Director General to the Office of the Prime Minister of Israel, Eli Groner

Joey T. Shabot with Director General to the Office of the Prime Minister of Israel Eli Groner

 

Left to right: Joey T. Shabot, Wayne H. Elowe and Dawn Zhang

Left to right: Joey T. Shabot, Wayne H. Elowe, and Dawn Zhang

Greenberg Traurig Miami & Tel Aviv Host Three Days of LATAM Focused Events

Posted in Event, Global, Israel, Latin America

The Tel Aviv and Miami offices of global law firm Greenberg Traurig, LLP  hosted three days of events in Israel focusing on doing business in Latin America, including co-hosting a seminar with Mergermarket and the Association of Corporate Counsel (ACC) called “Start-Up Nation to Start-Up Region: Making Your Mark in Latin America” Seminar which took place Jan. 25 in Tel Aviv, Israel.

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Left to right: Yosbel A. Ibarra, Manuel Rajunov, Gary M. Epstein, Patricia Menéndez-Cambó, Gabriel Hayun and Joey T. Shabot


Patricia Menéndez-Cambó
, vice chair of Greenberg Traurig and chair of the firm’s Global PracticeGary M. Epstein, managing shareholder of Greenberg Traurig’s Tel-Aviv office and co-chair of the firm’s Israel PracticeYosbel A. Ibarra, co-managing shareholder of Greenberg Traurig’s Miami office and co-chair of the firm’s Latin American and Iberian Practice, and Manuel Rajunov, shareholder in Greenberg Traurig’s Dallas and Mexico City offices, participated as panelists at the “Start-Up Nation to Start-Up Region” seminar, along with an esteemed panel of experts from leading law firms and local business executives, including: Freddy Fachelr, EY Law International Division, Costa Rica; Carolina Zang, Zang, Bergel y Viñes Abogados, Argentina;  Jonás Bergstein, Bergstein Abogados, Uruguay; and Mauro Berenholc, Pinheiro Neto Advogados, Brazil.

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Left to right, top row: Jonás Bergstein, Gary M. Epstein, Gabriel Hayun, Freddy Fachelr and Mauro Berenholc
Left to right, bottom row: Yosbel A. Ibarra, Liat Tanur, Manuel Rajunov, Patricia Menéndez-Cambó, Carolina Zang and Joey T. Shabot

 

Media coverage:
Greenberg Traurig Hosts Start-Up Nation to Start-Up Region: Making Your Mark in Latin America Seminar, benziga, February 21, 2017
Transitioning successfully from a Startup Nation to a Startup Region (Hebrew), Telecom News, February 20, 2017
Discovering Latin America (Hebrew), Ynet, January 26, 2017

 

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Start-Up Nation to Start-Up Region: Making Your Mark in Latin America Seminar

 

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Law firm seminar: Opportunities for Israeli Lawyers and Their Clients in Latin America

 

 
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Greenberg Traurig Kicks Off Purim 2017 Celebrations

Posted in Event

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Greenberg Traurig’s Tel Aviv office kicked off this year’s Purim holiday celebrations with two memorable and festive events. While the celebrations are far from over, as the holiday commences this coming Sunday, here is a summary of the happenings in the office from this past week.

The associates in the office (Devora Snyder, Aaron Katz and Jonathan Orlinsky) organized a Purim happy hour that was held in the office and hosted associates from leading Israeli law firms in Israel. GT associates introduced their Israeli counterparts to the firm’s Tel Aviv office and its global platform. Associates from over ten leading law firms attended the event.

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The office also celebrated the holiday by having all of the attorneys and staff assemble together and exchange “mishloach manot,” which are celebratory gift baskets that are customarily given on the holiday of Purim. The exchange was conducted along the lines of the familiar “Secret Santa” tradition, with the members being randomly assigned a person to whom they gave the gift.

Members of Greenberg Traurig in Israel and all over the world wish you a happy and festive Purim!

Members of Greenberg Traurig in Israel and all over the world wish you a happy and festive Purim!

צוות גרינברג טראוריג בישראל ובעולם מאחל לכם פורים שמח!  

Convertible Promissory Bridge Notes and Simple Agreements for Future Equity

Posted in Emerging Growth Companies, Investments

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Companies often issue convertible promissory “bridge” notes when they are at an early stage and are in search of capital. A convertible promissory bridge note is a short-term debt instrument that, in addition to the standard terms (such as the principal amount owed, the interest rate, the maturity date, and default provisions), also provides that in certain circumstances, instead of cash payment of the amount owed under such note, the principal and interest accrued under such note may convert into shares of the company, in which case the note will be extinguished. The event that would normally trigger conversion would be the company raising additional equity financing by a certain date (e.g., the note may provide that if the company raises at least $1,000,000 of equity financing within the next 12 months the note will convert). The notes can be structured either as having a mandatory conversion from debt to equity or conversion may be optional and be up to the discretion of the lender. Often, the price per share that the note will convert into will be at a discount. For instance, if shares are issued in the financing at 1 dollar per share, the note may convert into shares at 80 cents per share and the number of shares issuable upon conversion of the note will be determined by dividing the principal and interest outstanding under such note by the discounted per share price. Such notes sometime include a valuation cap as well, which allows the note holders to convert into equity at the lower of the valuation cap or the price in the future financing, and may also contain a “most favored nations” clause which protects the note lender in the event that subsequent notes are issued on more favorable terms. The convertible debt held by the lender will typically convert into the securities that are issued in the future financing (e.g., Series A), although some notes may provide for terms whereby only common securities will be issued.

Companies must carefully track the issuances of notes and make sure to reflect these issuances on their pro forma capitalization tables to insure that any future rounds of financings take into effect the potentially large number of additional shares that will have to be issued as a result of the conversion of the convertible promissory notes then outstanding.

It is important to note that in recent years, one alternative to convertible promissory notes is the Simple Agreement for Future Equity (SAFE) that was created by Y-Combinator, a Silicon Valley incubator. In a SAFE, the investor’s funds are invested in the company in exchange for an agreement promising the investor company stock to be issued at a later date in connection with a specific future event such as an equity financing. The SAFE will typically provide the investor with a discount off of the price per share sold in the equity financing round and will include a valuation cap. In the event that an IPO or exit transaction occurs prior to an equity financing round, the SAFE can be converted into ordinary shares or repaid in cash, as elected by the SAFE holder. The SAFE is not a debt instrument (although the tax treatment is currently unclear), and thus bears no interest and has no maturity. Accordingly, the investor has no legal status as a creditor. On the flip-side, the Company need not reflect the SAFE as debt and does not bear the risk of insolvency attendant to loans.

With an international Emerging Technology practice consisting of attorneys around the globe, Greenberg Traurig is experienced in handling matters relating to venture capital financing for both entrepreneurs and early stage companies. For more information, please feel free to contact a Greenberg Traurig attorney.

March 27, 2017: Barry Schindler to Co-Chair the Leading IP Conference in Israel

Posted in Event, Intellectual Property

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Greenberg Traurig is proud to be a platinum sponsor of the Best Practices in Intellectual Property conference for the second consecutive year.

Barry Schindler, Co-Chair of Greenberg Traurig’s Global Patent Prosecution Group will co-chair the conference and IP shareholders James DeCarlo (New York and New Jersey offices) and Weisun Rao (Shanghai, Chicago) will address the crowd.

Greenberg Traurig is proud to take an active role in Israel’s IP and technology ecosystem.

Please see below for further details.

Click to register

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Year-End Survey of Investment Transactions in Israel

Posted in Investments, Israel, Mergers & Acquisitions, Technology

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With the 2016 fiscal year behind us, a number of reports that have been released in the past months provide a survey of the 2016 exits involving Israeli companies. The largest deal in 2016 that involved an Israeli company was the purchase of the Israeli tech company Playtika by the Giant Interactive Group from China for $4.4 billion. This was the second time in recent years that Playtika has been sold, as it was sold in 2014 to Caesars Interactive Entertainment, and thus certain surveys exclude the deal from their annual deal reports as there was no significant exit by Israeli shareholders, even though it is an Israeli company with Israeli employees. Some reports addressing capital raising activities consider 2016 to be a high water mark in terms of the dollars invested in Israeli companies.

According to the PwC Israel’s “2016 Hi-Tech Exit Report,” acquisition deals dropped from $7.2 billion in 2015 to only $3.4 billion in 2016 (excluding the Playtika sale). The report noted that many of the 2016 buyers were investors who were new to Israel and had not been active in Israel in 2015, and so it therefore seems likely that many previous buyers may be busy reaping benefits of their previous acquisitions and are not yet ready to make new investments. It also seems likely that the first-time buyers may be back in subsequent years to make additional acquisitions, as has often been the case with previous crops of new multinational companies who make acquisitions in Israel. The report also notes the uptick of Asian investors in the Israeli market, as evidenced by the Playtika deal.

A different recent report by the IVC Research Center valued Israel’s high-tech exits at $10 billion (this time including the Playtika sale), which includes 93 M&A deals and 3 IPOs. In a related press release to the report, Koby Simana, CEO of IVC Research Center, stated:

2016 was by no means sub-par. In fact, it proved better than the previous year in terms of the average exit multiple, and was one of the best multiples overall. This, coupled with the relatively lower volume of deals compared to 2015, suggests to us that entrepreneurs and investors may not be pushing for exits as they once did. Instead, it seems investors are looking closely into other alternatives. An opportunity to sell requires positive returns and substantial multiples, otherwise companies and investors choose to wait patiently, opting for company growth.

The report also focused on three prominent technology clusters that play an important role in the Israeli hi-tech market: adtech, cyber security, and automotive. These sectors have all seen several high-profile deals in recent years and it is expected that these sectors will continue to expand.

IVC Research Center also prepared a summary of capital raisings in 2016 which found that Israeli hi-tech companies raised an all-time high of $4.8 billion, which was an 11 percent increase above the $4.3 billion raised in 2015. The average financing round, which has been constantly rising over the past five years, reached $7.2 million in 2016, and most of the investment deals in 2016 involved later stage companies. In the words of Idan Nishlis, a leading legal marketer in Israel, in his Israel 2016 M&A Report, “the creative expertise and technological prowess in Israel’s high-tech sector once again shines through in recently published data, confirming Israel’s central role as a hub of innovation and a key factor in global M&A trends.”

Greenberg Traurig is the only major international law firm with a multidisciplinary, registered office in Tel Aviv and serves as a gateway for Israeli businesses and entrepreneurs seeking opportunities around the world, as well as for companies exploring opportunities within Israel. The Tel Aviv location offers clients the global reach of Greenberg Traurig’s international network, connecting Israel to major commercial centers across the globe. GT Tel Aviv is deeply involved in the hi-tech world and assists Israeli companies in raising money and increasing operations abroad as well as in connecting U.S., Chinese, and European investors with Israeli companies.

February 19, 2017: Calcalist Interviews Joey Shabot

Posted in Israel, Media Coverage

Operating shareholder of the Tel Aviv office was recently interviewed for the prominent Israeli economic journal Calcalist:

“Unlike other international law firms which usually have a minor physical presence in Israel, Greenberg Traurig’s local office employs eight attorneys in Israel. ‘Not only did we set up a platform in Israel’, says Shabot, distinguishing between GT and other firms, ‘but we have a whole team providing services to Israeli clients, in their own language and local business hours’.

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How Well Do You Know Your Co-founder?

Posted in Startups

Two co-founders, one CEO and one EVP.  One owned more than the other, got paid better, had bigger bonuses.  How did this happen?

“We were always very clear with each other about who would have what role,” the EVP once told me.  I observed that almost everything between them was consultative, even to a fault.  But for a tough call, if push came to shove, the EVP deferred and the buck stopped with his partner.  “We defined the roles and it has always worked for us.”

Yet, when representing start-ups, I often find that conversations over business fundamentals such as choice of structure, team recruiting, or tweaking a cap table will be greeted by an entrepreneur nervously wondering, “How am I going to break the news to my co-founder?”

The guy wringing his hands across the table didn’t fret while burning the candle at both ends to improve on the start-up business model.  He didn’t squirm when he quit his day job to bootstrap a risky venture.  He didn’t sweat when he and his co-founder shook hands.  But now, he’s afraid of allocating himself more shares of stock.

One such entrepreneur was running the entire operation.  One had made a substantial loan to the company.  One was dealing with unqualified co-founders whose presence would have violated any nepotism policy.  One had declined freelance work and was living with her folks.  One had paid the other a handsome salary in one business while they jointly plotted the spin-off.  But they all sometimes found themselves walking on egg shells when it came to having what they perceived as difficult conversations with their co-founders.

The television showבמטבח מהפכה  is a good example of this phenomenonOn the show, host אסף גרניט is brought in to a failing restaurant to identify the problems, help correct them, and hopefully turn it all around.  Sometimes it is a family member or friend that is somehow harming the business.  Curiously, nobody can quite bring themselves to identify the problems honestly when גרניט does his initial checking.  Finally, after the employees quietly signal what’s really going on, the main players have to go on television so that they can be pushed to have an adult conversation.

Are you nervous about your co-founder?  Will he be tempted by surer paths?  Are your complementary skills being strained? Are you making allowances? Are you hiding annoyances?

Perhaps you’re nervous about yourself?  Do you feel as though you are enjoying an undeserved wide berth?  Afraid your co-founder will bear a grudge?  Have your expectations changed?  Is there some romantic or other non-business alignment?

As seen through personal experience (and on במטבח מהפכה!), for the good of the venture, it is important to be able to talk about these things and your other feelings in an open and trusting way .  For starters, discuss about each person’s strengths and weaknesses.  Identify what actions and reactions he or she views as positive.  Figure out what really gets under her or his skin.  Compare management styles.  Come up with the areas where one person needs a counterweight or could simply benefit from support.

Naturally, it’s ideal to have such talks before deciding to partner with someone.  But it’s never too late to employ candid interactions to take your relationship to the next level.

Important News for Israeli Investors and Entrepreneurs

Posted in Immigration, Israel

In much anticipated news for both the United States and Israeli companies and entrepreneurs, Israeli nationals will soon become eligible for the E-2 Treaty Investor visas. The Israeli authorities have announced that the procedures and rules for the B-5 investor visa for U.S. citizens are expected to be released in March 2017. One of the vital effects of the B-5 visa implementation and availability is that it will enable the reciprocal availability of the E-2 visas for Israeli citizens.

The E-2 Treaty Investor visa aims to provide foreign nationals and corporate entities with a path to invest in the U.S. economy through reciprocal treaties of commerce. Where available, this visa option allows investors and employees of the same nationality to live in the United States and work for the U.S. enterprise.  In addition to the requirement that the majority ownership of the enterprise must be held by nationals of the treaty country, E-2 visa requirements include a substantial investment into the U.S. enterprise, as well as the entity’s growth and expansion.

President Obama first signed the legislation adding Israel to the list of approximately 80 other countries eligible for E-2 treaty investor visas in 2012. However, the implementation of this law was on hold, awaiting Israel to likewise ratify the treaty serving as the basis of E-2 eligibility. The reciprocal terms and conditions included the availability of a reciprocal visa path for U.S. investors to Israel. On Aug. 13, 2014, the Israeli Knesset ratified the necessary legislation to enable E-2 visa availability to Israeli nationals. Subsequent to the ratification, the Israeli authorities took additional time to confirm the details of the legislation and its implementation.

With the recent announcement that the B-5 investor visa procedures and rules are anticipated to be released in March of this year, the much anticipated E-2 Treaty Investor visa availability is expected to be released around the same time. GT will continue to provide updates on this key issue as they become available and is available to answer any questions regarding E-2 visa eligibility.

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