In a challenging venture market, there is significant pressure on valuations and existing investors are increasingly playing a larger role in funding and setting the terms for new rounds. As a result, down-rounds, recaps and pay-to-play financings are once again on the upswing. Such rounds bring unique considerations relating to structuring, fiduciary duties and impacts on existing equity holders.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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