Last week we broke news about a new later-stage fund being raised by Union Square Ventures, which also is in market with its third early-stage fund. The fund strategy info came from a source, but the dollar amounts came from an Form D filing with the SEC.
USV, of course, declined to comment sue to regulatory restrictions. Partner Fred Wilson did, however, write a blog post about how Form D filings can catch issuers off guard, since they typically are submitted by outside counsel:
So when you are getting close to finalizing a funding transaction, be sure to talk this issue through with your lawyers so that you are in control of the substance and timing of the message.
Good advice. And here’s an addendum: If you are an attorney representing a Form D issuer, don’t wait for your client to initiate the conversation. Just throwing a bunch of papers in front of a startup CEO of venture capitalist to sign, and assuming they’ll figure out the consequences, is a bit presumptuous. They’ll thank you for it.