Expanding the Tribe of Accredited Investors

Slowly but surely, the U.S. government is steadily expanding the opportunity for more and more Americans to participate in private capital markets.  Since the end of the Great Depression, U.S. regulations have generally barred individual investors (i.e. natural persons) from participating in the nation’s private markets unless they were “accredited … Read more

The Positive Side of a Pandemic

This blog entry deviates from my normal discussion regarding legal developments in entrepreneurialism and in venture capital and private equity sectors. With the COVID-19 pandemic, we are not living in normal times. Instead, it is my hope that this entry simply encourages you, by reminding you, the reader, that you … Read more

Corporate Transparency Act of 2019

On October 22, 2019, the U.S. House of Representatives passed the Corporate Transparency Act of 2019 (H.R. 2513) (the “Act”). H.R. 2513 was sponsored by Rep. Carolyn B. Maloney (D-NY). If it becomes law, the Act requires U.S. corporations and LLCs (“Covered Companies”) to file a form with the Treasury … Read more

LLCs are not always Bullet Proof (Part II)

As discussed in our previous post, LLCs are statutorily designed to protect its members from personal liability for the business entity’s debts and obligations. So long as the LLC has been properly formed and properly maintained, that protection will remain in place.  But when not properly formed or maintained, it … Read more

Equal Access and Opportunity Initiative

Investment in venture capital and private equity (vc/pe) sectors is singularly the most fluid path to the creation and growth of generational wealth in the United States. Last year, buyout volume in private equity alone exceeded $380 billion. (Source: Harvard Law School’s 2018 Private Equity Year in Review). Yet, many … Read more

Portfolio Company Litigation Risk Assessment

Despite the limited liability and organizational protections of a limited partnership structure, private equity firms are routinely sued for acts and omissions committed by its portfolio companies. Mitigating that risk can mean the difference between a company making a profit or experiencing a loss, and, as such, affects a private equity firm’s ability to generate a return on its investment in that company.

There have been a number of cases[1] where private equity firms have been included as defendants in lawsuits, for having its managers or directors serve on a portfolio company’s board, playing a role in the selection of portfolio company management, and implementing policy—all tasks routinely engaged in by private equity firms.

Zhemian Ventures can assist your firm and its portfolio companies to develop strategies and management structures minimizing the risk of liability through our Litigation Risk Assessment. Through this assessment, Zhemian Ventures will do a deep dive into each one of the areas below, provide a detailed written analysis to your firm, and make recommendations to minimize and mitigate your firm and portfolio company’s exposure to liability.

We examine the following areas of your portfolio companies:

Labor and Employment—reviewing harassment policy, compliance with state and federal labor regulations (FLSA, ADA, ADEA, FMLA, ERISA, etc.), employer social media policy, employer drug policy, and independent contractor vs. employee classification;

State and Federal Regulatory Compliance—FCPA, data privacy law (GDPR, HIPAA, COPPA, etc.), trade regulations, and, if applicable, FDA and EPA compliance;

Intellectual Property—patents and trademarks, goodwill, domain registrations, social media sites (Facebook, LinkedIn, Instagram, Twitter, etc.), works for hire;

Vendor Relationships—contract administration and compliance and billing and collection practices;

Insurance Coverage—review portfolio company’s general commercial liability, errors and omissions, and other insurance coverages; and

Board Governance—review ethics, executive compensation, talent retention, and level of private equity firm’s involvement in day-to-day operations.

Please email us at m.a.brown@zhemian.com for more information.

[1]See, e.g. In re: Heparin Product Liability Litigation (MDL Docket No. 1953) (Maryland-based private equity firm sued as a co-defendant in action for negligence, strict liability/manufacturing defect, breach of implied and expressed warranty, statutory wrongful death and statutory survival against firm’s pharmaceutical portfolio company), Ex rel Medrano Diabetic Care RX, LLC, No. 15 Civ. 62617 (S.D. Fla.) (Department of Justice intervenes in a civil suit in order to include a California-based private equity firm as a defendant on False Claims Act violation), Guippone v. BH S&B Holds., LLC, 737 F.3d 221 (2d Cir. 2013) (allowing claim to proceed against parent holding company for closely held subsidiary’s alleged violations of WARN Act); and Sun Capital Partners III, LP v. N.E. Teamsters & Trucking Indus. Pension Fund, 724 F.3d 129 (1st Cir. 2013) (discussing potential “trade or business” status of private equity firm for ERISA purposes).

LLCs are not always Bullet Proof (Part I)

When setting up a new business, many entrepreneurs have been advised to use a limited liability company (“LLC”) as the formation entity of choice because of its limited liability and asset protection features. I’ve heard some business owners even go so far as to refer to LLCs as some kind … Read more


The information in Entrepreneur Law Guru Blog (“Blog”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this Blog should be construed as legal or consulting advice from Zhemian Ventures, LLC or the individual author, nor is it … Read more


Welcome to the Entrepreneur Law Guru Blog (ELGB).  This Blog offers light-hearted, interesting, and insightful discussion regarding the law and how it relates to entrepreneurs and building and running a business.  ELGB focuses on matters dealing with business formation, capitalization, compliance and regulation, labor, etc.  We post to ELGB on … Read more