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Lowenstein Sandler LLP

Ed Zimmerman

Ed Zimmerman

Partner
Chair, The Tech Group

Lowenstein Sandler LLP
New York, U.S.A.

tel: 212.204.8696
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Local Time: Mon. 23:56

Profile

Ed's 80+ columns published on the Accelerators & the Experts pages of The Wall Street Journal. Ed serves on The Wall Street Journal's Panel of Experts. Ed's 35+ columns in Forbes.

Ed co-founded and Chairs Lowenstein Sandler's Tech Group and VentureCrush.

Ed represents growth companies and startups as well as the venture capital, growth, and PE funds that fund them. He joined Lowenstein Sandler as a summer associate in 1991 and co-founded the firm’s Tech Group (1998), which has become one of the nation’s leading practices: Dow Jones ranked Lowenstein among the five most active U.S. law firms for venture capital and private equity (2013).

Chambers USA ranked Ed among the 22 best lawyers in Startups & Emerging Companies–USA–Nationwide; of those, Ed is the only lawyer based in New York (2018). Best Lawyers in America (2017) named Ed the New York City Venture Capital Lawyer of the Year. Chambers USA also ranked Ed among the best lawyers in Corporate/M&A–New York and in Investment Funds: Venture Capital–USA–Nationwide: “‘One of the best venture capital lawyers in the country–period’ is how clients describe Edward Zimmerman; with a practice covering the East and the West Coasts, Zimmerman enjoys a superb reputation across America and has also worked on deals abroad.” 

Ed serves as an Adjunct Professor of Venture Capital at Columbia University's Graduate School of Business (2005-present). From 1994 through 2004, Ed served as an adjunct professor at Rutgers Law School. He has also guest-lectured at Harvard Business School, Sciences Po (Paris), MIT, Wharton, Johns Hopkins, NYU, and the London School of Business, and has published case studies through Columbia's Graduate School of Business.

Ed currently serves as a Wall Street Journal Expert Panelist, publishing 80 columns on tech startups and growth companies (and sometimes wine) on The Wall Street Journal’s Accelerators page and Experts page. Ed has also authored over 35 additional articles in Forbes, the National Law JournalNew York Law Journal, and Wine & Spirits. Ed served as an editor for an M&A chapter in an American Bar Association book and chaired a committee in the National Venture Capital Association’s Model Legal Documents Project.

Ed co-founded and runs VentureCrush, which includes the accelerator VentureCrushFG (f.k.a. FirstGrowthVC, which Pando Daily called "New York's best Accelerator") and a series of gatherings for founders, senior executives, angels, venture capitalists, musicians, and winemakers (VentureCrushAVVentureCrushNYVentureCrushSF, and VentureCrushParis).

Ed was appointed to the Conseil Stratégique de l'Attractivité of France, where he served as part of a 30-member group of international business leaders advising the government and President of France (2014). He has similarly been invited to the White House and the Élysée Palace to meet with senior officials to discuss how America and, separately, France, can enhance their communities of startups and tech investors. He has also been called upon to provide similar input to Luxembourg’s Prime Minister Xavier Bettel and Minister of Finance. Ed has made numerous appearances on television and radio (in the United States and Europe) to comment on the tech and venture markets. Ed is also politically active and was listed among the "50 most powerful people in New York politics working in law,” (2019) in which New York City & State Magazine noted that "The co-founder of Lowenstein Sandler’s tech group – who is also an expert on wine – Zimmerman has been called 'one of the best venture capital lawyers in the country.’”

Ed has spoken at venture fund annual meetings in Stockholm, Berlin, Tel Aviv, and Copenhagen, and he works extensively with European and Israeli startups and venture/growth funds. Ed has angel-invested in 100+ startups (with more than 25 exits) and in numerous venture funds.

Ed advocates on issues concerning race, gender, the LGBTQ community, reproductive rights and gun control. In February 2014, Ed co-organized (with the Obama White House’s Liaison for LGBT matters) a summit of LGBTQ leaders in the tech community at the White House. He separately co-organized an event at the White House on the Future of Work & AI in 2016. In 2014 at VentureCrushNY, Ed announced a pledge against gender bias in tech, which he later published on The Wall Street Journal's Accelerators page, with subsequent coverage in Fortune magazine. In 2013, Ed published a column also on The Wall Street Journal’s Accelerators page, calling out bias in VC, noting a majority “of VCs had degrees from a small cluster of 10 schools … and a staggering 87% were Caucasian.” He published a companion Columbia University case study (2013).

Ed was profiled for his advocacy for gender equality in several books, notably Pulitzer Prize winner Joann S. Lublin's Earning It: Hard-Won Lessons from Trailblazing Women at the Top of the Business World (Harper Business 2016) and Julia Pimsleur’s Million Dollar Women: The Essential Guide for Female Entrepreneurs Who Want to Go Big (Simon & Schuster). Ed’s (non-musical) contribution to the musical (political) collaboration “Put a Woman In Charge” between multi-Grammy winning musicians Keb’ Mo’ and Rosanne Cash was reported in Billboard Magazine (2018). He and his wife Betsy have written about music (Sister Rosetta Tharpe) in Forbes (2016) and published a case study about the Blues (Columbia Business School, 2018).

Ed has written about wine and wine tech and was the host of Radio Uncorked, a wine radio show produced by Infinity Broadcasting and aired on KYOU Radio in San Francisco, Napa, Sonoma and the surrounding area. Ed was inducted as a chevalier in the Confrérie des Chevaliers du Tastevin at the Château du Clos de Vougeot in France and, in May 2018, the Echansonnerie Des Papes inducted Ed as an ambassador to the appellation of Chateauneuf-du-Pape at the Palais des Papes in Avignon. Ed has worked harvest (briefly) in France (2009) and California (2004 & 2008), where he was involved in vinifying a wine that was granted a perfect 100-point score by Robert Parker (2004 vintage). Ed's vinous adventures are the subject of the opening pages of In Search of Bacchus (by James Beard Award Foundation finalist George Taber). He has also been profiled in Wine & Spirits (March 2017) for his obsession with Burgundy. Ed enjoys understanding history through wine via dinners that have been chronicled in Wine Spectator, Vinous, and Forbes.

Ed serves on the Board of Trustees of Harvey Mudd College. He was a board member of and, since 1994, has been pro bono counsel to New York Live Arts (formerly Bill T. Jones/Arnie Zane Dance Company), which named Ed its 2018 Live Ideas Honoree. Ed and his wife, Betsy, co-founded and ran for nearly a decade the HAPI Foundation, a children's charity.

Ed graduated from the University of Pennsylvania School of Law (1992) and Haverford College (1989) (Phi Beta Kappa).

Bar Admissions

    New York
    New Jersey
    District of Columbia

Education

University of Pennsylvania Law School (J.D. 1992), Comment Editor, Journal of International Business Law
Haverford College (B.A. 1989), Phi Beta Kappa, John P. Garrett Prize
Areas of Practice
Professional Career

Significant Accomplishments

Speaking Engagements

The Tech Group will host its next VentureCrushAV featuring a discussion led by Ed Zimmerman with Kamal Ahmad, Founder, Asian University for Women and President & CEO, Asian University for Women Support Foundation; Maria Klawe, President, Harvey Mudd College; and Jake Schwartz, Co-Founder & CEO, General Assembly.  The event will also feature a live musical performance by blues musician Jontavious Willis.


VentureCrushAV is a night time NYC-based gathering of founders, Senior Executives, Angels, and VCs striving to strengthen the community of tech startups and growth companies.  The event also includes live music.


For more information, email [email protected]


 

The Tech Group will host its third VentureCrushFG session of the 10th Vintage in New York City.  The event will feature a panel discussion titled, Developing Brand – Your Company's & Your Own, led by Ed Zimmerman and including panelists Karen Appleton, Angel Investor, Board Member, Startup Mentor, Employee # 7 at Box, Former Senior Director at Apple (Silicon Valley-based); Hayley Barna, Partner, First Round Capital & VentureCrushFG Alum (Co-Founder of BirchBox); Amanda Hesser, Co-Founder & CEO, Food52, Former NYTimes Food Editor, James Beard Award Winning Author & VentureCrushFG Alum; and Jodi Sherman Jahic, Managing Partner, Aligned Partners (SF-based VC).  The panel discussion will be followed by breakout sessions.


VentureCrushFG (formerly known as FirstGrowthVC) was described by Pando Daily as: "New York's best accelerator isn't much of an accelerator at all."  Instead, VentureCrushFG builds a community of founders and strives to avoid engendering competition between the founders within VentureCrushFG.  VentureCrushFG does NOT: (1) take equity, (2) charge, (3) require anyone to do business with anyone else or (4) have a demo day.


The fourth, and last, VentureCrushFG session of the 10th Vintage will take place on May 9, 2018.


For more information, email [email protected].

VentureCrushSF is an invite-only event created by the Tech Group at Lowenstein Sandler and led by the Tech Group's Chair, Ed Zimmerman, the Palo Alto Managing Partner, Kathi Rawnsley, and colleagues from Lowenstein Sandler's California and New York offices. With the help of some great venture investor co-hosts, VentureCrushSF brings together founders, tech executives and investors for a series of small discussions relevant to the tech community. We then invite even more tech industry insiders to a big party featuring a live performance, incredible wine and food, and some wonderful winemaker guests.

The Tech Group will host its next VentureCrushAV featuring a discussion between Ed Zimmerman and Arlan Hamilton, Founder and Managing Partner of Backstage Capital. The discussion will be followed by a live musical performance by Latin Grammy Award Winner, Gaby Moreno.


VentureCrushAV is a night time NYC-based gathering of founders, Senior Executives, Angels, and VCs striving to strengthen the community of Tech Startups and Growth Companies. The event also includes live music.

Please join us for a chat led by Ed Zimmerman, Lowenstein Sandler LLP with Theresia Gouw, Co-Founder of Aspect Ventures, followed by a performance by Madison Cunnigham.


Time: 6:00 p.m. - 8:30 p.m.


Location: Lowenstein Sandler, 1251 6th Ave 17th floor, New York, NY 10020

Partner and Tech Group Chair Ed Zimmerman co-hosts an invitation-only investor reception as part of the Black Women Talk Tech conference, Roadmap to Billions.


Conference description:


Join us at the only annual tech conference created exclusively by black women founders for black female founders and their supporters.


A conference built from the perspective of women, the goal is to showcase the brilliance of black women in tech, create a stage for our experiences, foster deep connections and create real funding opportunities. We believe in learning from those who are paving the way. Through their successes, (and failures), gain insight and valuable lessons to inspire and guide you on your path to success.


Join over 1000 investors, tech evangelists, founders who are just starting out and those who have been in the game for years at the largest gathering of black women tech founders in the world.


The conference runs February 27-March 1, 2019, at Union West in New York City.


The investor reception takes place 6-9 p.m. on February 28, 2019.










Ed Zimmerman co-leads a roundtable discussion at the UN Global Compact providing perspective and insights about different strategies investors can take to invest in tech through a diversity and inclusion lens, especially, but not exclusively, with respect to gender. The participants include asset managers, pension funds, foundations, and limited partners in funds. The group will discuss and debate key topics related to investing in the tech sector.


This session takes place 8-10:30 a.m. on March 22, 2019. The event is being held in the United Nations Global Compact Offices, 685 Third Avenue, New York, NY 10017.


Note: Attendance is by invitation only and is not open to the public.


Articles

SCOTUS Changes To Sales Tax Will Ripple Through to PE, VC & M&A Deals Involving Retailers
Lowenstein Sandler LLP, October 2018

Retailers have taken note of the dramatic shift in state sales tax law emerging from one of Justice Anthony Kennedy’s last Supreme Court decisions. As different states announce legislative and regulatory changes throughout the summer, retailers are scrambling and we’re now seeing the impact in venture capital, private equity, and merger and acquisition transactions involving commerce companies. On June 21, 2018 the U.S. Supreme Court decided South Dakota v...

Additional Articles

It feels like once or twice a day I speak with a startup that has tripped over a seemingly invisible rule applicable to founder equity: the founders and early employees/advisors in startups really need to get their stock or options BEFORE there’s a term sheet for a venture or angel funding. While not a secret, the law doesn’t come right out and expressly say this. Frankly, to know this you’d have to talk to folks who have an understanding of tax law, corporate law and startup life. That understanding, unfortunately, is in shorter supply than it should be and, for founders, seems to largely have been learned the Sharon Jones & the Dap Kings way:


“I learned the hard way, baby. Now I know about you. I learned the hard way … Not to be your fool.”  I wonder whether Sharon was singing about Section 409A?

This article tackles a very high class problem in the venture capital and startup world: what exercise periods are most appropriate for options following termination of employment.  Over the last several years, startups and growth companies have reevaluated the standard approach to exercise periods for stock options, which typically expire 90 days after departure.  As startups have increasingly become far more valuable pre-IPO, the cost to exercise those options can become prohibitively expensive, and employees who leave before an acquisition or IPO may be leaving millions or even tens of millions of dollars on the table.


It has been ‘market’ to have a 90-day post-termination exercise period (PTEP) on stock options, but companies like Quora and Pinterest have, in the last three years, been shifting that practice.  Many employers today, especially in tech, are considering extending beyond that standard three-month post termination exercise deadline.  Typically, startups consider extending PTEP during the growth stage rather than earlier in the startup’s life.


We – a deal lawyer and a compensation and benefits lawyer with more than 50 years of practicing law, almost evenly split between us – intend to cover in this article the current business, tax and legal issues involved as venture-backed startups and growth companies consider whether (or not) to extend PTEP.

“Hey, did we make the filing necessary to have 1202 'QSBS' stock? Now that we have an offer to sell the company, our investors are asking whether QSBS allows them to shelter their gain from taxes.”


“Hold, hold on, hold onto me...” XAmbassadors sang “Unsteady” (which is not about the 5 year holding period for stock under QSBS, but it could be...) and other songs at AngelVineVC, a VentureCrush event in NYC a few years ago. [Disclosure: Ed Zimmerman and his firm co-founded and run AngelVineVC and VentureCrush.] [In the photo, Ed is the one wearing a name tag].


That's a question we field regularly, especially these days when venture-backed M&A has really heated up. The answer, invariably, is no - no filing was made, but not for the reason the person who posed the question may think. Internal Revenue Code section 1202, under which stock of startups can be treated as “Qualified Small Business Stock” (QSBS), has become a high stakes issue for many startups because of the potentially millions of dollars per holder it can shield from taxes. That said, section 1202's complexities make it very difficult to consistently plan ahead. For starters, in the words of the Alabama Shakes, “You got to hold on” for more than Five Years...the rest is more complicated.

Startup and growth company employees in California rest easy knowing that California believes so strongly in the portability of employment that post-termination noncompetes are generally void, except for a few exceptions as referenced below (especially in the context of noncompetes connected to a sale of a business). That comfort has extended to post-employment nonsolicits, which the California courts have viewed as veiled noncompetes. However, just over a week ago, on September 7, a federal district court in California seems to have strayed from this path. This article briefly explores that recent case, Fidelity Brokerage Services LLC v. Rocine, et al.and the seemingly unanswered questions it raises regarding what employers and employees can expect from post-termination nonsolicits in the Golden State.

UPDATE December 4, 2017:


Subsequent to our original article in 2016, Congress has approved amendments increasing the trigger for Rule 701 from $5M to $10M, but the amendments have not yet been enacted. In fact, this very increase has been proposed several times – most recently in a September 2017 SEC Advisory Committee meeting. The bill, entitled “Encouraging Employee Ownership Act,” would -- if the amendments are enacted -- require the SEC, within 60 days after enactment, to raise the $5M threshold to $10M.  We do not undertake any responsibility to further update this article.

On Monday, the United States Supreme Court (“USSC”) will hear arguments in a matter fundamental to how employers and their employees and contractors argue about rights and entitlements. The USSC can, in these matters, equip employers with powerful tools to shut down cases that look like the currently raging Uber class action and the important Microsoft class action (2000), the latter of which resulted in thousands of contractors becoming employees and receiving benefits and equity.


The USSC arguments on Monday in Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and NLRB v. Murphy Oil USA, Inc. will focus on whether arbitration clauses in the employment or independent contractor context result in enforceable waivers of a worker’s right to bring or participate in a class action. These arguments underscore the rift in federal circuit courts of appeals regarding the interpretation of arbitration agreements as class action waivers in employment and other independent contractor agreements.

Last week, in what has become an annual occurrence, I was invited by my friend Jeff Bussgang to speak at Harvard Business School. Jeff, who has written two books about entrepreneurship, lectures on the subject at HBS; in his spare time, he works at Flybridge Capital, a NY and Boston-based venture fund he has co-led for the last 15 years. Jeff asked me to speak about my legal practice (I represent startups, growth companies and their investors from my perch as a partner at the law firm of Lowenstein Sandler) and my angel investing (I’ve invested in more than 100 startups and in several dozen venture capital funds, including - for purposes of disclosure - funds managed by Flybridge Capital).

In advance of trips to wine regions, I generally ask very knowledgeable wine professionals to direct me to winemakers who might not be on my radar. In late 2011, I was particularly interested in the Les Rugiens vineyard in the Burgundy village of Pommard, which was then the subject of a newly-emerging controversy. Pommard is a village in the Cote de Beaune and while it has spectacular Premier Cru vineyards, it does not have any Grand Cru vineyards. There is a push, however, to elevate to Grand Cru status Pommard’s finest Premier Cru vineyards -- Les Rugiens, Les Epenots and Les Grands-Epenots (or parts of them). Wines from Les Rugiens, in particular, are legendary for their power and longevity.

“Transparent management” is a term used to describe an approach to business leadership that entails being honest and open with team members. In my experience, it is discussed more than it is practiced. But I recently had a conversation on this topic with a founding CEO whom I respect.


(subscription required to access article)

It will come as no surprise that startup founders spend substantial time raising money, jumping through complex hoops every step of the way. As a result, they crave simplicity and low friction in the mechanisms and legal structures they use to bring in that needed capital, especially at the earliest stages of the startup’s life–when the transaction costs are a more material portion of the funding.


It’s little wonder, then that founders have fallen in love with short, easy documents like the SAFE (simple agreement for future equity) and KISS (Keep it Simple Security) or the slightly longer and more timeworn convertible note. Each of those documents is designed to enable investors to fund a startup without agreeing on price today and without taking the time to resolve so many of the open issues.



(subscription required to access article)


Retailers have taken note of the dramatic shift in state sales tax law emerging from one of Justice Anthony Kennedy’s last Supreme Court decisions. As different states announce legislative and regulatory changes throughout the summer, retailers are scrambling and we’re now seeing the impact in venture capital, private equity, and merger and acquisition transactions involving commerce companies.


On June 21, 2018 the U.S. Supreme Court decided South Dakota v. Wayfair, Inc. , in which it upheld a South Dakota law that requires certain sellers to collect sales tax even if those sellers lack “physical presence” in the State. The South Dakota law challenged prior Supreme Court precedent because it required a minimum annual amount of sales to South Dakota customers rather than requiring a seller’s physical presence in South Dakota. As a result, the Supreme Court’s decision reverses longstanding precedent and has sweeping repercussions for online sales and old style mail order sales. In the two months following the Wayfair decision, numerous States have been reacting, including enacting legislation very similar to South Dakota's, and they’re doing so with an eye toward enhancing their collections of sales tax revenues. Consumers will pay and retailers, especially but not solely, online retailers, are concerned that the Wayfair case will adversely impact sales and/or price.

I had the privilege of interviewing both Laura Marling and Space Shuttle Commander Mark Kelly together at our VentureCrushAV event in New York in October 2017. As explained next, the discussion has renewed relevance right now.


In early 2019, Commander Mark Kelly announced he was running for the United States Senate. Two weeks ago, Politico reported that Commander Kelly’s Senate race “will likely be one of the most expensive and closely watched campaigns of the cycle in an emerging presidential battleground.” That same article also reported that Commander Kelly's Republican opponent was “shaking up her campaign team ahead of her 2020 race, turning the page on her disappointing loss last year as she tries to protect a critical battleground Senate seat…” (June 24, 2019)

This column shares the fireside chat I had with Latin Grammy winner/Emmy-nominee, Gaby Moreno at our VentureCrushSF event in June 2019. During our chat, Moreno graciously performed a moving solo acoustic version of “Salvese Quien Pueda” off her Grammy-nominated album, Illusion. You can see that on the video (below) right after she explains why she will never release the official video she filmed for that song.


Since moving to Los Angeles from her native Guatemala, singer-songwriter Gaby Moreno earned a Grammy nomination for her album, Illusion (Best Latin Album of the year, 2017), and an Emmy nomination (the "Parks & Recreation" theme song), and won a Latin Grammy (Best New Artist, 2011). The official video for "Fuiste Tú" (the song she did with Ricardo Arjona) has been viewed on Youtube 775 Million times, charting at number 1 in multiple countries. Gaby is justifiably proud of her role doing the theme song and voicing a character on multi Emmy Award-winning Disney children’s television series, “Elena of Avalor,” which features Disney's first Latina princess. This week, Netflix announced that "Gaby Moreno’s moving version of “Cucurrucucú Paloma” was chosen to play at the end of the emotional” penultimate episode of "Orange Is The New Black,” the multi-Emmy winning show that has become Netflix’s most watched original series. Noting that this season (the show’s final) will contain “timely and disturbing ICE detention scenes,” presumably further cementing the political implications of Moreno’s artistry. 


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