When Disney suspended Jimmy Kimmel Live! on September 17, 2025, following the host’s monologue about the assassination of political commentator Charlie Kirk, media outlets framed the decision as a free-speech crisis. That framing, though emotionally charged, misses the real story. Disney’s actions were governed not by the First Amendment—which constrains only government actors—but by fiduciary duties, contractual obligations, and regulatory pressures that shape corporate governance in publicly traded media companies. In the private sphere, where broadcast networks answer to shareholders and federal agencies rather than to the Constitution, it is business law—not the First Amendment—that sets the boundaries of what speech survives.

As a Delaware corporation, Disney’s directors are bound by fiduciary duties established under Delaware common law and Title 8 of the Delaware Code. These duties require directors to act in good faith and make informed decisions that advance the corporation’s interests. When controversy threatens reputation or shareholder value, those obligations create a governance imperative: assess risk, act prudently, and protect the enterprise. The business-judgment rule generally shields boards from liability for informed decisions, except when conflicts of interest, bad faith, or improper motives taint their decision-making process.

Within hours of Kimmel’s September 16 monologue, FCC Commissioner Brendan Carr publicly criticized the segment during a podcast, urging ABC affiliates to refuse carriage and referencing the agency’s licensing authority over broadcasters. The pressure worked. Nexstar and Sinclair, together operating nearly a quarter of ABC-affiliated stations, announced that they would preempt the show. For Nexstar, the stakes were particularly high: the company had recently announced a $6.2 billion agreement to acquire TEGNA Inc., a merger still awaiting FCC approval that would make it the nation’s largest local broadcaster. Facing simultaneous pressure from affiliates, advertisers, and regulators, Disney’s leadership executed a calculated duty-of-care maneuver: a temporary suspension meant to contain cascading risk.

This dynamic exemplifies what scholars at Columbia’s Knight First Amendment Institute call “jawboning”—the use of governmental influence to shape private behavior without formal enforcement. The First Amendment strictly limits direct government regulation of speech, but to the law is less clear when government officials use informal means to persuade, cajole, or strong-arm private platforms to change their content practices. These platforms often have strong incentives to yield to government pressure, especially when billion-dollar transactions await regulatory approval.

Carr’s public condemnation was particularly striking because the FCC lacks statutory authority to sanction broadcast content based on viewpoint. Section 326 of the Communications Act explicitly prohibits the Commission from exercising “the power of censorship” and bars any regulation that would “interfere with the right of free speech.” Yet perception often trumps legality in board deliberations. When agency officials signal hostility and companies have pending transactions before them, fiduciary prudence may warrant factoring in potential regulatory retaliation. FCC Commissioner Anna M. Gomez captured Disney’s predicament in her official statement condemning the suspension: “Even the threat to revoke a license is no small matter. It poses an existential risk to a broadcaster, which by definition cannot exist without its license. That makes billion-dollar companies with pending business before the agency all the more vulnerable to pressure to bend to the government’s ideological demands.” The ACLU was even more direct, stating that ABC “gave the Trump FCC chairman exactly what he wanted” by suspending Kimmel indefinitely.

Suspension offered short-term advantages. It signaled responsiveness to stakeholders, bought time to assess contractual rights, and allowed affiliates and sponsors to recalibrate. Yet extending the hiatus created its own liabilities. Protests erupted outside Disney studios, talent guilds condemned the network, and congressional Democrats accused the company of capitulating to political intimidation. By September 23, the board evidently concluded that continuing the suspension would inflict greater reputational harm than benefit. That reversal exemplified Delaware’s requirement that directors continually reassess risk as circumstances evolve.

Shareholder oversight sharpened those pressures. Section 220 of the Delaware General Corporation Law grants investors the right to inspect corporate books and records for any “proper purpose” tied to their interests as stockholders. Several investor groups invoked that right to obtain internal documentation on the Kimmel decision, seeking to determine whether directors acted for legitimate business reasons or to placate political actors. If the latter, the board could face derivative litigation for breaching its duty of loyalty, a uniquely business-law remedy that operates outside constitutional doctrine.

Contract law compounded the complexity. Standard entertainment agreements include morality clauses permitting suspension when talent brings the company into disrepute. Such clauses grant discretion, not command. They remain subject to the implied covenant of good faith and fair dealing, which ensures decisions advance genuine business objectives. Disney, therefore, had legal permission—but not obligation—to act. The suspension reflected a governance calculation, not a moral verdict. The affiliates’ defection exposed deeper structural tensions in broadcast economics. Unlike cable networks that Disney owns outright, ABC depends on licensing contracts with independently owned local stations. Those contracts, regulated by the FCC, grant limited discretion to preempt network content. When affiliates exercised that discretion, Disney’s contractual leverage proved constrained. The result underscored that modern “speech controversies” in media often unfold through overlapping private contracts rather than public censorship.

Ultimately, the controversy exposes where speech regulation truly occurs in the modern media economy. Constitutional law governs the state; corporate law governs the platforms through which most speech is disseminated. Strengthening shareholder oversight of politically influenced decisions, narrowing morality-clause discretion, and increasing transparency around regulatory jawboning are business-law reforms better suited to protecting expressive diversity than abstract appeals to the First Amendment. In a landscape where the market—not the state—sets the boundaries of expression, the future of free speech will depend less on constitutional doctrine than on the integrity of corporate governance.

American antitrust law has recently been at the forefront of the news cycle.  Recent headlines highlight antitrust concerns regarding Google’s digital advertising, Amazon’s alleged tactics to induce Prime subscriptions, and Nvidia’s $100 billion investment in OpenAI. Further, the transition from Former President Biden’s Federal Trade Commission (FTC) Chair Lina Khan to President Trump’s appointees, Gail Slater at the Department of Justice (DOJ) and Andrew Ferguson at the FTC, has demonstrated a vision for “America First Antitrust.” This vision is described as “an inherently patriotic endeavor that defends the liberty of everyday consumers against high prices and fewer purchasing choices.” While a renewed focus on consumer welfare is consistent with President Biden’s agenda, modern policy may still need to adapt to rapidly evolving market trends.

From the 1930s to the late 1960s, market structure-based understanding of competition, otherwise known as “big is bad,” was the predominant theory of antitrust. The idea was that a market dominated by a small number of large firms would likely be less competitive than one with many smaller competitors. The government claimed that mergers and partnerships involving formidable corporations with rivals or supply chain partners would “foreclose competition.” This approach was rejected in the 1970s by Robert Bork, a proponent of the Chicago School of Economics, who argued that the purpose of antitrust is not to protect the ‘little guys’ (small businesses), but rather to promote competition. Bork became a central figure in the neoliberal antitrust era. In his influential work, The Antitrust Paradox, Bork argues that the sole objective of antitrust should be to maximize “consumer welfare.” Consumer welfare, as viewed through the lens of antitrust, has been interpreted by courts, including the Supreme Court, to refer to the effects of competition on consumer prices.

This standard remained dominant until the Biden administration, when a new school of thought emerged with the appointment of Lina Khan as the Chair of the FTC. The Neo-Brandeisians, named after Justice Louis Brandeis, believe that small groups of industry titans who consolidate power would be detrimental to the democratic process. Justice William O. Douglas wrote, “[p]ower that controls the economy should be in the hands of elected representatives of the people, not in the hands of an industrial oligarchy.” This new approach adapts the existing consumer welfare standard to the current political climate. Lina Khan wrote, “showing antitrust injury requires showing harm to consumer welfare, generally in the form of price increases and output restrictions.” Under Khan’s leadership, the FTC shifted focus to reduced market access, harm to innovation, and decreased product quality, all of which are considered harms to consumer welfare.

Today, “America First Antitrust” focuses on price increases as the central aspect of consumer welfare. Merger review has “migrated towards assessing what is measurable – namely short-term pricing effects… and short-term productive efficiencies.” If the FTC only focuses on what is quickly measurable and demonstrable in court, price becomes the “common denominator in merger review.” However, in an era when Google, Amazon, Meta, and other big tech companies offer “gratis” services, price is not an obvious metric for assessing antitrust harm to consumer welfare. These companies offer free services in exchange for the data they collect from their platforms, which is used for purposes such as future ad revenue, training pricing algorithms, or training artificial intelligence. Courts should consider whether this data has competitive significance when evaluating big tech antitrust cases.

Sivinski et al. provide an example framework for considering the competitive significance of personal data collected by big tech companies in merger analysis. The plaintiff must:

1. Determine which data is owned or controlled by the defendant.
2. Determine whether the data is commercially available as a “product” or an “input” to products of downstream competitors.
3. Determine whether the market participant owns the data or can only access it.
4. Determine whether there are substitutes for the relevant data or if it is unique to the market participant.

Under this example framework, if a plaintiff satisfies these four steps, a court would be justified in finding that the proprietary data is of competitive significance and would indeed affect consumer welfare. Such a finding would allow courts to block mergers or acquisitions that create big tech free-service behemoths (e.g., Google’s search engine).

As competition in big tech increasingly relies on consumer data and “free” services for American consumers, courts struggle to find an impact on consumer prices, which allows companies to evade antitrust scrutiny. As the consumer welfare standard has historically evolved to adapt to changing economic and political conditions, it may be time for it to adopt frameworks suited to a modern tech era.

Coal has recently become a focal point of controversy. It is woven into our history, yet as environmental pressures rise and demand falls, coal’s economics no longer add up. Can it still fit AI-era, energy-hungry future? The data suggest not, even as recent executive actions answer with an emphatic yes.

The administration’s push for coal is built on three main justifications: revitalizing the economy, safeguarding national security, and powering artificial intelligence (AI). As for the economy, the “Unleashing American Energy”executive order is meant to address reduced job creation and high energy costs stemming from regulations and the shift away from domestic energy sources. The order argues that “burdensome and ideologically motivated regulations” have impeded resource development, resulting in high energy costs that harm consumers across transportation, heating, utilities, farming, and manufacturing sectors. To counter this, the order calls for unleashing domestic energy resources to “restore American prosperity.” The mechanism for this is a direct command for all federal agencies to review and eliminate any actions that “impose an undue burden” on domestic energy development, including fossil fuels.

Data backs the administration’s findings on energy cost and coal demand. U.S. coal consumption declined by 17.4% in 2023 and residential electricity bills have increased by almost 10% from January 2025 to August 2025. However, the administration’s interpretations of the data may not align with past studies. The U.S. Bureau of Labor Statistics examined coal and electricity prices from 2004 to 2019 and did not find a clean correspondence—as coal share fell, electricity prices did not necessarily spike. Even if we accept the premise that greater coal availability leads to lower electricity prices and that overregulation is the problem, analysis shows that coal just isn’t as competitive. The American Action Forum found that while recent regulations have played a role in coal’s decline, the decline is a long one, starting in ~2007 and driven more by cheap natural gas and increased competition from renewables. Past deregulation appears to have little effect. The Congressional Research Service shows that despite regulatory rollbacks between 2017 and 2021, there was no improvement in coal plant retirements, coal employment, or production.

The Unleashing American Energy order also establishes that a reliance on foreign energy is a vulnerability “weakening our national security.” It sets a broad policy to protect national security by ensuring an abundant domestic supply of reliable and readily accessible energy, “with particular attention to…coal.” Building directly on this, the newest executive order, “Reinvigorating America’s Beautiful Clean Coal Industry,” places such importance on coal that it designates coal as a “mineral”—entitling coal to priority development on federal lands. According to the “Immediate Measures to Increase American Mineral Production” executive order, this means all relevant federal lands “shall provide for mineral production” through private commercial operations.

Agencies have repeatedly shown that the nation’s security does not hinge on coal. The North American Electric Reliability Corporation finds grid reliability depends on diverse resources and adequate reserves, not on preserving aging coal plants. The DoD itself has begun shifting the military toward microgrids, renewables, and on-site storage to harden bases against attack or blackout—precisely because centralized coal plants are a liability. This initiative would even allow DoD installations to “phase out fossil fuels in the energy mix over time” and “sever themselves completely from the national grid.”

Finally, the Reinvigorating America’s Beautiful Clean Coal Industry order directly links the need for coal to AI. The nation’s “beautiful clean coal resources will be critical to meeting the rise in electricity demand due to…the construction of artificial intelligence data processing centers.” The order further directs the Secretaries of the Interior, Commerce, and Energy to identify regions where “coal-powered infrastructure is available and suitable for supporting AI data centers” and to assess the potential for “expanding coal-based infrastructure to power” them.

While AI’s energy footprint is undeniably growing, current trends show that clean energy, not coal, is the remedy for this increased demand. The U.S. Energy Information Administration (EIA) shows that clean energy is already meeting this extra demand as it accounted for over 80% of total growth in electricity generation in 2024. The EIA goes as far as to say that low-emissions sources are “expected to meet all of the world’s additional electricity demand over the next three years.” AI technology companies themselves are already moving away from coal to meet their electricity needs with the S&P Global report showing a 66.4 percent increase in contracted clean energy capacity between its 2024 and 2025 updates.

Although the administration’s goals of growing the economy, ensuring security, and supporting the electricity needs of new technology are valid, empirical evidence and market realities show that its chosen policy instruments may not be. The central question is not whether coal will, or should, remain dominant; rather, it is how much longer the U.S. can sustain a declining industry. When the data indicate a lost battle, policymakers need to explore forward-looking solutions, not just extend special protection for the past.

The venture capital (VC) landscape is a high-pressure, high-risk environment where founders must navigate fierce competition, complex negotiations, and intense scrutiny to secure funding. For many women founders, these challenges are often amplified by systemic barriers that influence who receives funding and how deals are structured.

Women-founded startups account for only 2% of venture capital funding in the United States. Research has found that there is investor bias towards women during the pitching stage, as demonstrated by the differences in questioning. Women were asked questions highlighting potential losses and risk mitigation, whereas their male counterparts were asked questions highlighting upside and potential gains. Entrepreneurs asked the latter questions raised six times more funding than the former. Combined with limited mentorship networks available to women founders, there is an unleveled playing field within the venture capital landscape.

Yet the challenge extends far beyond unequal funding. Studies highlight women founders often face lengthier term sheets with more protective provisions, less board representation and 35% lower median personal wealth, compared to their male counterparts, impacting access to self-funding or legal counsel.

While lawyers are indispensable, founders need a baseline to strengthen their position at the negotiation table. AI offers accessible guidance, helping empower prospective venture founders to decode contracts, identify governance risks like voting or control restrictions, and negotiate confidently. Studies suggest that women-only founding teams are more likely than mixed-gender teams to see AI as opening doors to more opportunities. Why might this be? Outlined below are ways woman can stand to benefit from employing AI in understanding potential risks:

Leveling the Playing Field: Understanding Term Sheets

Research shows that women founders receive term sheets—which dictate how equity, voting rights, and control are distributed—that are more detailed and packed with protective clauses about 2.3 times more than men. In addition, the due diligence process for women lasts about 1.7 times longer than for their male counterparts, reflecting biases that falsely assume they are higher-risk or less aggressive negotiators. Clauses like liquidation preferences (which decide who gets paid first in a sale) or anti-dilution provisions (which shield investors if share prices drop) can quietly erode a founder’s stake and influence.

The AI advantage: There is a rise of tools on the market specifically designed for term sheets. Tools such as Simulfund, uses natural-language processing to analyze term sheets and highlight potentially one-sided clauses. Simulfund and other similar tools simulate the impact of these terms on equity and control, proving useful for women founders who often face more intricate term sheets.

Guarding Governance: Protecting a Seat at the Table

Ambiguous governance clauses on voting rights, board composition, and fiduciary obligations risk founders from being sidelined from key decisions. Women founders hold only 16% of board seats in venture-backed startups, and nearly one-third of such companies have no women on their boards. Under Delaware law, where most VC-backed startups incorporate, board members owe fiduciary duties of care and loyalty. Poorly drafted governance provisions can weaken these protections and limit female founders’ influence.

The AI advantage: Tools such as Captable.Ai and Energent.Ai help founders build their capitalization tables, simulate future funding rounds or dilution scenarios, and project how board seats or voting control will shift over time. This benefits women founders because these tools enable them to model and negotiate governance terms—anticipating board seat dilution, voting power loss, or investor veto dominance—to maintain equitable control within Delaware’s fiduciary framework.

Decoding Investment Instruments: SAFEs and Convertible Notes

Complex contractual clauses: SAFEs (Simple Agreements for Future Equity) and convertible notes are common instruments that allow investors to contribute capital to a startup in exchange for shares once the company raises a priced funding round. Unlike traditional equity investments, SAFEs (Simple Agreements for Future Equity) defer ownership determination to a future funding round. Convertible notes, however, accrue interest and include a maturity date, introducing a different complexity.

Women founders, with 53% less access to personal networks and mentorship compared to their male counterparts, can face heightened challenges navigating these complex terms, risking unfavorable deals.

The AI advantage: AI contract review tools like Hypestart and LawGeex help scan contracts for unusual or high-risk clauses, compliance gaps, and flags unfavorable terms. This benefits women founders by reducing the decoding challenges due to limited network access and lack of industry guidance.

AI is a Compass, Not a Map: The Indispensable Role of Attorneys:

Women founders continue to make strides despite systemic hurdles; accounting for 24.3% of VC exits and delivering twice the revenue per dollar invested compared to their male counterparts. The ability to leverage technology alongside strong legal guidance can help unlock the full potential of women-led innovation.

While AI tools can clarify terms, reduce information asymmetry, and empower informed negotiations, they cannot replace attorneys’ judgment in weighing trade-offs or guard a founder’s long-term interests. For women founders conquering the VC labyrinth, AI serves as a compass that points toward opportunity while attorneys remain the map that ensures the journey ends in ownership.

e.l.f. Beauty recently announced its $1 billion acquisition of Rhode—one of the largest beauty deals of the decade and the company’s  biggest acquisition to date. Founded in 2022 by Hailey Bieber, Rhode quickly became profitable and generated $212 million in net sales with a substantial margins in the twelve-month period ending March 31, 2025. Product launches frequently sold out within hours, creating a whirlwind of momentum that garnered the attention of industry insiders and investors keen on capitalizing on its success, Beyond its headline value, the transaction stands out for its complexity and potential to reshape the competitive landscape of the beauty industry.

e.l.f. is both cautious and ambitious in this transaction, structuring the deal to balance immediate value with trust in long-term growth potential. At closing, e.l.f. will pay $800 million—$600 million in cash and $200 million in stock—with up to $200 million is contingent on Rhode’s performance over the next three years. Earnout provisions like these are common in fast-growth acquisitions, but they are also among the most litigated deal terms, as disputes often arise over how performance is defined, which accounting standards apply, or whether post-closing actions affect results. Consequently, these provisions typically include explicit language that outlines unambiguous metrics for performance evaluations and dispute resolution.

Beyond financial terms, the transaction also highlights the legal mechanisms used to preserve a target’s brand identity. Hailey Bieber will remain a fundamental part of Rhode’s future as Founder retention provisions of this kind are legally significant: they may include non-compete clauses, incentive compensation, and intellectual property protections to secure the very authenticity that underpins brand value. Rhode has faced trademark disputes in the past, underscoring why IP due diligence is a cornerstone of acquisitions in consumer brands.

From a market perspective, this deal marks e.l.f.’s largest acquisition to date, surpassing its 2023 purchase of Naturium. Rhode has built a solid relationship with Gen Z consumers, and its management has proven their ability to generate excitement with product launches that emphasize scarcity and exclusivity. Now, the brand is preparing to expand beyond its online-first model, with its products entering Sephora stores across North America and the UK. This expansion will test whether Rhode can keep its cult-like appeal even as it shifts from a limited, exclusive model to wider retail distribution.

As Rhode prepares to expand its distribution footprint, the acquisition’s success will depend as much on its legal framework as on market strategy. e.l.f. received advice from Latham & Watkins, which assigned a multidisciplinary team spanning corporate, securities, tax, intellectual property, employment, and antitrust law. Transactions of this scale require coordination across multiple regulatory, contractual, and compliance fronts, not only to integrate physical assets and operations, but also align compliance and governance structures.

Moreover, such large-scale, multidimensional deals also have broader market ramifications. The acquisition underscores e.l.f.’s ambition to extend its reach in the beauty market while maintaining its reputation for affordability. At the same time, concerns have been raised about whether macroeconomic pressures such as tariffs, inflation, and supply-chain costs will impact margins and the success of integration.

The risks are apparent: Rhode could lose its identity within a larger entity, the earn-out could lead to disputes over performance criteria, and uncertainties in global conditions may threaten scaling (at least in the timeframe and approach set forth by current conversations). However, the opportunity is equally significant. If e.l.f. manages the transition carefully, it gains not only a billion-dollar skincare line, but an engaged community, a cultural aesthetic, and enduring consumer loyalty.

Ultimately, the Rhode deal highlights more than a billion-dollar valuation: it illustrates reveals how modern acquisitions blend law, business, and culture. The earn-out provision functions as a contract law mechanism to harmonize risk between buyer and seller, reflecting how agreements attempt to balance ambition with protection. At their core, contracts in transactions like this are tools of trust and alignment, structuring the terms that allow companies to capture both tangible assets and intangible value.

The Rhode deal demonstrates how today’s M&A in consumer industries merges legal structure with cultural relevance. Earn-out provisions, retention clauses, intellectual property protections, fiduciary duties, and regulatory approvals together make up the legal architecture that determines whether this $1 billion investment pays off over time. The outcome of the Rhode deal will show whether contracts and corporate governance can capture something as abstract as brand authenticity.

They say “necessity is the mother of invention,” and in Latin America, necessity runs deep. Over one‑quarter of the population still lives outside the formal financial system; families in remote Andean and Amazonian towns are hemmed in by their sheer distance away from nearby cities, with mountains breaking up supply chains and denying them vital access to medication or counseling. Nevertheless, these gaps have become canvases for entrepreneurs. Rappi’s yellow backpacks coursing through Bogotá alleys and Nubank’s purple cards in Brazilian favelas are proof that creativity plus code can turn structural pain points into billion‑dollar solutions. Investors have followed this energy, betting that the next global platforms can rise from places where the need for change is visceral, everyday, and impossible to ignore.

A decade and a half ago Latin American founders confronted three almost‑universal headwinds: venture capital (VC) was scarce, incorporation and exit rules were labyrinthine, and the most skilled engineers were lured abroad by higher salaries and deeper capital pools. A World Bank review of the period notes that foreign funds—when they showed up at all—dominated the largest deals because few domestic financial institutions were willing or even allowed to back VC vehicles. Local startups were left under‑financed and over‑regulated.

Even so, a handful of breakout companies began to prove that scale and liquidity events were possible. Mercado Libre’s 2007 Nasdaq IPO, which raised USD 289 million, demonstrated regional e‑commerce could be both profitable and investor‑friendly. Globant’s 2014 debut on the New York Stock Exchange signaled that a home‑grown software firm could compete globally and tap U.S. public markets. Despegar’s 2017 listing extended that narrative into online travel. This milestone excited capital and talent back into the ecosystem and, just as importantly, reassured international investors that Latin America offered real paths to liquidity.

As these companies flourished, regional policymakers began launching reforms that rewired the startup ecosystem’s legal plumbing. Recent statutory overhauls have made it far easier—and safer—for capital to flow into young companies. Brazil led the charge with the Marco Legal das Startups (Law 182/2021) created explicit limited-liability shields for passive angel and VC investors, opened a regulatory sandbox for testing new technologies, and streamlined public-procurement rules so startups can sell to government without prohibitive red tape. Mexico matched that spirit with its S.A.P.I. corporate form—a venture-friendly shell that allows for active and passive investors to take on different corporate governance roles—and then layered on the Fintech Law of 2018, which complements the corporate S.A.P.I. shell by giving two clear National Banking and Securities Commission licence tracks: IFPE (electronic-payment institutions, i.e., e-wallets) and IFC (crowdfunding platforms). Startups now have clarity on compliance requirements and predictable approval timelines, significantly easing fundraising and regulatory processes. Colombia’s earlier SAS model (Law 1258/2008) cut incorporation times from months to days; Argentina (2017) and Uruguay (2019) later copied this template, creating a near‑uniform playbook for cross‑border deals. Collectively, these reforms have given global investors the safety they were missing fifteen years ago.

Against this backdrop of regulatory progress and early successes, Latin America was perfectly positioned when global liquidity surged in 2021: Brazil and Mexico captured more than half of the total USD 16 billion that startups raised that year. Cheap money, pandemic‑driven digitization and a fear of missing out pulled megafunds like SoftBank and Tiger Global into ten‑figure rounds for Nubank, Kavak and Rappi.

Global macro conditions flipped in 2022. Rapid U.S. interest-rate hikes and recession fears drove investors toward safer assets, pulling Latin-American venture funding down from USD $7.9 billion in 2022 to about USD $4 billion in 2023. Yet LAVCA characterises this pull-back as a consolidation, not a collapse: 2023 deal counts still outpaced pre-pandemic norms, and early-stage rounds captured 42 % of all VC dollars, signalling that appetite for new bets remains healthy. Meanwhile, LatAm-focused fund managers raised roughly US $2.1 billion for new vehicles in 2023—the region’s third-largest haul ever—adding home-grown dry powder to the ecosystem. Analysts at Crunchbase and TechCrunch note that the tighter market has pushed founders to prioritise unit economics and a clear path to profitability over “growth at any cost,” a shift many believe will make the next cycle more resilient.

Despite this significant progress, some critical headwinds remain strong enough to threaten the region’s growth momentum. First is macro volatility: inflation spikes and rate hikes in the market have led regional VC firms to shy away from making major investments, with the USD 16 billion raised in 2021 dropping to just USD 4 billion in 2023. Second, a late‑stage capital gap has opened; with crossover funds on the sidelines, many scale‑ups turned to venture debt, which still topped USD 1.2 billion across 47 Latin deals in 2022. Third, fragmented regulation and patchy infrastructure raise the cost of regional expansion; rural broadband penetration in some countries is less than half the urban rate, capping digital‑services growth. Finally, a relentless talent drain—fueled by dollar‑denominated remote offers from U.S. and EU firms—forces local startups to compete on salary before equity culture is fully accepted.

Looking ahead, the path forward is clear. First, broadening the late-stage investor base by inviting local pension funds and insurers to invest in startups will create a stable capital foundation, reducing dependence on unpredictable international funding. Second, achieving regulatory harmonization, especially in fintech, will allow startups to scale seamlessly across Latin America’s diverse markets. Third, clarifying and codifying equity-compensation rules will transform stock options into a compelling retention tool, anchoring talent locally. Finally, strategic investments in digital infrastructure, combined with simplifying bureaucratic procedures, will dramatically expand market reach and accelerate growth, ensuring ideas swiftly translate into real-world impact. If these milestones are met, the next generation of Latin American founders will secure both the funding and the talent they need—without ever needing to book a ticket to Silicon Valley.

Ultimately, Latin America’s strength lies in its people—the entrepreneurs who know firsthand the challenges they seek to overcome. Time and again, they’ve transformed adversity into innovation, turning everyday obstacles into global opportunities. With continued support, strategic reforms, and a shared commitment to progress, there’s every reason to believe the coming decade will witness unprecedented growth, propelled by the spirit, ingenuity, and unwavering resilience of those who proudly call this region home.

Investor money constantly flows into the tech industry, especially emerging AI companies. Recently, corporate investors have funded top startups in the AI space far more often than they have in other sectors. As of 2021, corporate investors have comprised 16 percent of all investment in the AI industry. Big investment banks have even created investment companies that specialize in these technologies, helping customers invest in companies specialized in market infrastructure, information services, security software, mobile technology, big data analysis, payments, and more. For example, Goldman Sachs’s Principal Strategic Investments Group serves customers worldwide.

As per Goldman’s 2024 investment commentary, despite macroeconomic concerns, the tech sector continues to show resilience due to improving fundamentals, AI advancements, and easing rate expectations. Specifically, as AI opportunities grow, companies under $100 billion in market cap have become increasingly optimistic. AI infrastructure has been a key return driver, and despite slower-than-expected AI adoption, market enthusiasm for AI remains strong. However, it is essential to note that even as businesses sign and negotiate longer contracts to shield themselves from prospective AI risks, there is little certainty in determining what laws apply to these emerging technologies. Moreover, AI systems are not entirely accurate and are vulnerable to making arbitrary mistakes, leaving an open question around whether it is possible to build AI models that comply with potential regulation at all.

One of the solutions to potential AI noncompliance discussed in proposed legislation is what’s called “system shutdown.” System shutdown is a method of mitigating the harms that might be caused by noncompliant AI being used to engage in illegal activity. Proposed legislation, such as California’s SB 1047, floated the idea of forcing all large-scale, “high-risk” AI models to include a “kill switch” that would unilaterally shut down the AI model if it was detected to pose “serious risks to humanity.”

Governor Newsom ultimately vetoed SB 1047. As the bill was being debated, Silicon Valley companies (including OpenAI) emphasized how this controversial AI bill would stifle innovation. It is unclear whether this push stemmed from general inefficiencies regarding these “system shutdown” solutions or these companies’ broader fears of business shutdown. Noncompliance with a system shutdown policy could certainly lead to (i) breach of covenants with investors and (ii) prolonged legal battles between investors and founders. However, for emerging AI companies, system shutdowns could also fatally disrupt day-to-day operations and growth. Generally, AI models are developed (i) with certain reliance on third-party platforms like OpenAI’s API and/or (ii) in-house entirely. Hypothetically, a shutdown affecting a key partner like OpenAI could sabotage dependent companies, while regulatory action could derail companies ignoring compliance from the start. Therefore, in both situations, the compliance risks are significant.

That said, other alternative solutions to potentially risky AI face similar dilemmas. The EU AI Act talks about the “withdrawal of non-compliant AI systems from the market,” which ultimately raises investor concerns about whether a company’s stance towards the incredibly complex issue of AI product compliance could lead to the loss of their investment entirely. The Colorado AI Act creates strict rules and standards for developers and deployers of high-risk AI systems to follow, adding more responsibility to AI model developers and giving investors a potentially critical due diligence question to seek answers for. This approach runs into a similar barrier as California’s vetoed SB 1047 did: Is it possible to fully capture all “high-risk AI systems” in a single regulation, especially as technologies change so quickly and companies are looking for newer ways to innovate in such a lucrative field?

At the 2024 Seoul AI Safety Summit, major players like Microsoft, Amazon, and OpenAI, amongst others from the U.S., China, Canada, the U.K., France, South Korea, and the UAE, agreed to set up voluntary commitments concerning AI safety and ethics advancements. The participants pledged to create safety frameworks for mitigating the challenges associated with their frontier AI models, while addressing potential risks caused by the progress of AI, such as cyberattacks, the development of bioweapons, and the misuse of technology by malicious actors. While these are important commitments to make as AI becomes more prevalent, there are still open questions about the potential ineffectiveness of expensive penalties like system shutdowns and whether different regulatory policies might create more effective enforcement actions in their place.

With the fast pace of technological growth and the trial-and-error approach to regulation, navigating contractual obligations in commercial and transactional spaces remains a key strategic focus area. Given how risky developing AI models can be and how investors lack significant certainty in the safety of their investments when they put money into AI startups, legal compliance will increasingly play a crucial role in navigating investor expectations. With proposed legislation potentially implementing product withdrawal or shutdown requirements, investors and companies face huge risks and financial burdens in this growing field. Therefore, closely monitoring compliance requirements as they arise, adhering to them promptly, and building stronger corporate strategies in collaboration with key stakeholders, including investors, are essential to keeping the business running smoothly.

The New York Climate Change Superfund Act, signed into law on December 26, 2024, is a legislative measure designed to address the financial impacts of greenhouse gas emissions from specific industry actors. The Act mandates that businesses engaged in fossil fuel extraction or crude oil refinement, with a documented emission history of one billion metric tons or more between 2000 and 2018, be obligated to pay for climate change-related damages. The fee is calculated based on the business’s proportional share of greenhouse gas emissions within the designated time frame. The businesses will pay upwards of $3 billion annually for up to 25 years. The collected funds are to be deposited into a designated “Climate Superfund” and allocated towards the restoration and protection of New York wetlands and infrastructure, as well as the support of public health programs addressing climate change-related illnesses and injuries. This landmark Act not only confronts the environmental and public health costs of fossil fuel emissions but also sets the stage for an important legal battle that could redefine the boundaries of corporate accountability in climate policymaking.

The Act has sparked intense legal and political debate, drawing both profound support and disapproval from various stakeholders across the country. One of the many parties in opposition to the Act is a coalition led by the U.S. Chamber of Commerce, which has filed a lawsuit in federal court to block its enforcement. They argue that the Act is unconstitutional, asserting that New York has exceeded their outreach by attempting to regulate interstate pollution and energy policy, traditionally reserved for the federal government. Furthermore, the coalition alleges that the Act imposes unlawful retroactive liability on businesses by penalizing them for actions that occurred over the preceding 25 years. They also suggest that the Act will have ripple effects across various stakeholder groups beyond the direct financial implications for fossil fuel companies. It is inevitable that the financial burden placed on fossil fuel companies by this legislation will be passed down to consumers through raised oil and gas prices. The coalition does not stand alone in any of its allegations in this legal battle, as 22 states have also joined in filing suit against New York for this Act.

Conversely, those in support of the Act, such as Senator Liz Kruger, offer a contrasting perspective. They posit that the legislation is a necessary and equitable measure to address the costs and damages of climate change, arguing that those entities most responsible for, and profiting from, activities contributing to these damages should bear the associated financial responsibility. They further assert that the Act is a deterrent, incentivizing the fossil fuel industry to pursue emissions reduction strategies. In response to constitutional challenges, they contend that the Act represents a valid exercise of the state’s police power to safeguard the environment and public health, rather than an overreach into interstate commerce. Finally, they argue that the opposition’s suggestion that the Act will increase oil and gas prices is fundamentally flawed, asserting that global market dynamics control these prices, not state legislation. Many environmental justice advocates are in support of this Act as well, characterizing it as a crucial step towards addressing the historical injustices faced by communities, including low-income neighborhoods and communities of color, which have disproportionately borne the brunt of pollution from the fossil fuel industry. The Act acknowledges the need to rectify these past harms by directing funds towards remediation and public health.

The New York Climate Change Superfund Act serves as a call to action for other states and the federal government to adopt more aggressive climate policies, showing that state governments will be willing to act, even when the federal government will not. The legal challenges to the Act will have significant implications for the future of climate regulation. It is a complex and controversial legislation, and it is unclear whether or not the courts will uphold the Act. A ruling in favor of New York could embolden other states to enact similar legislation, while an adverse decision could limit the scope of state authority in this area. However, regardless of the outcome, the Act has already sparked an important debate about the role of the fossil fuel industry in climate change and the need for states to address this issue.

2020 and 2021 brought one of the largest Initial Public Offering (IPO) booms in US history, brought about by an increased interest in digital technologies during the COVID-19 pandemic. However, in 2022, this market stagnated because of worsening market conditions and a Fed-sponsored contractionary monetary policy. Once inflation slowed down, the stock market rebounded considerably, leading the Federal Reserve to cut interest rates. This resulted in market volatility returning to pre-pandemic levels in 2024. As such, analysts predicted that this company-friendly environment would trigger a resurgence of IPOs by 2025.

However, a disappointing first quarter of 2025 has cooled that excitement. Much of last year’s initial excitement was based on a spike in IPOs in 2024. Additionally, the newly elected administration promised in their campaign to deregulate the IPO market and thus encourage investment growth.

However, this narrative overlooked the importance of the tech sector in the IPO market. In 2024, the healthcare sector led the number of IPOs with 43% of all IPOs, but these IPOs only brought in 26% of the total capital invested. On the other hand, the tech sector accounted for 18% of the total number of IPOs, with 23% of the total capital invested. This disparity highlights that tech firms attract a disproportionate amount of investment – and were the real drivers behind the upswing in IPO capital raised in 2024.

Recently, however, investor confidence in tech startups has wavered, mainly due to the volatility of that market. Investors fear overexcitement in a sector that has brought forward the most significant IPOs (such as Facebook and Alibaba), but also some of the worst (with Rivian and Robinhood). As such, tech startups have remained private longer to consolidate their financial records and wait for the right opportunity to go public.

Additionally, major tech companies such as OpenAI have been able to raise enough capital through private markets instead of being forced into a volatile public market that might reduce their valuation. As a result, the IPO market has lost one of its primary drivers of large, high-profile deals. With a lack of substantial tech listings, the predicted rise in 2025 IPO investment appears uncertain, driven more by traditional sectors offering modest returns than exciting tech debuts.

Not only that, but there was a significant chilling effect on IPOs because of the number of tech IPOs conducted in 2021 that opted to circumvent U.S. Securities and Exchange Commission (SEC) regulations through a special reverse merger structure. Tech companies looking to go public would reverse-merge a private firm with a public shell company incorporated solely for the purposes of the merger (named a “Special-Purpose Acquisition Company,” or SPAC). The lack of regulatory scrutiny created by the SPAC reverse merger structure generated much controversy amongst investors. It effectively created a loophole in the disclosure obligations regulated by the SEC to safeguard investors from potential share pricing fraud. Consequently, fraud accusations (such as Rivian’s IPO) and poor performance on these IPOs (by 2022, 80% of 2021 IPO’s still hadn’t seen positive earnings and 33% were trading below their opening price) led to investors seeking alternative methods of investments. This created further mistrust between public offerors and potential investors. Thus, even before the SEC regulated this loophole, investments in reverse-merger IPOs had dropped by 93%.

Finally, the macroeconomic landscape does not seem inviting for a public offering led by volatile tech firms. Investors expected the new administration officials to remove Biden-era rules and descale what was perceived as overreaching regulations. The new administration still insists they will conduct such deregulation, but until they do, Biden-era regulations are still enforceable. For now, investors are stuck waiting on whether the administration will deliver their deregulation promises and wondering if it’s worth betting on such rollbacks. This hesitation has only grown with the administration’s recent moves, which increase uncertainty in an already volatile market.

A new trade war has sent markets into a tailspin from which it still has not recovered. Economists have been reluctant to predict a recession, but the Fed has rejected further lowering interest rates, fearing that the administration’s trade war would result in higher inflation. As a result, the market volatility index increased by 52% in the last month, meaning that investors are less likely to invest because of high risk and low returns. If a tech startup wanted to conduct an IPO under such conditions, it would have to sacrifice the expected valuation of its shares. Thus, raising capital will become more expensive, discouraging potential investors.

Ultimately, while early signs in 2024 sparked hopes of an IPO resurgence, the reality has proven far more complex. The absence of significant tech listings, lingering regulatory hurdles, and rising geopolitical uncertainty have all combined to dampen investor enthusiasm. For now, the IPO market appears to be entering a more cautious and selective phase—one where traditional sectors lead modest recoveries. However, the explosive tech-driven growth of past years remains out of reach. Until investor confidence returns, and regulatory clarity emerges, the IPO landscape will likely stay sluggish, especially for tech startups that once used IPOs to fuel their most lucrative deals.

As globalization accelerates, effective transfer pricing strategies have become crucial in cross-border mergers and acquisitions (M&A). Transfer pricing sets the prices for transactions between affiliated entities within the same corporate group, aiming to allocate profits based on the arm’s-length principle—treating intercompany transactions as if they were between unrelated parties. Inaccurate transfer pricing can lead to tax investigations, penalties, and significant damage to a company’s financial health and reputation. Proper profit distribution across operations is essential for foreign-owned companies to navigate tax regulations. Non-compliance may lead to tax liabilities, as tax authorities could claim improper profit shifting to low-tax jurisdictions. Effective transfer pricing strategies are therefore essential for multinational corporations involved in cross-border deals.

Section 482 of the U.S. Internal Revenue Code mandates that transactions between related companies must occur at market prices. This section establishes the legal framework for making transfer pricing adjustments, requiring U.S. companies to document intercompany transactions thoroughly. In the U.S., transfer pricing documentation is mandatory, placing the burden of proof on companies to demonstrate compliance during tax audits. The Organization for Economic Cooperation and Development (OECD) offers internationally accepted guidelines for transfer pricing, widely used by tax authorities globally. While U.S. regulations align largely with these guidelines, there are subtle differences that foreign companies must be aware of when operating in the U.S.

When a U.S. company is acquired, integrating its operations and supply chain often requires revisiting intercompany transaction prices to reflect changes in business structure. For example, shifting raw material or product prices directly affects transfer pricing, making it essential to reassess prior arrangements post-acquisition. One of the most challenging aspects of transfer pricing in M&A is valuing intangible assets such as brand value, patents, trademarks, and proprietary technology. Inaccurate valuations can lead to adjustments by tax authorities, resulting in additional tax liabilities.

OECD guidelines outline five primary transfer pricing methods used to determine arm’s-length pricing and these form the foundation of international best practices.

U.S. regulations, under Section 482 of the Internal Revenue Code and the associated Treasury Regulations, generally align with these methods, particularly the Comparable Profits Method (CPM), which is widely applied in the U.S.

However, there are important distinctions. For instance, while the OECD treats all five methods as potentially equal in applicability depending on the facts, the U.S. regulations emphasize the “best method rule,” which requires taxpayers to use the most reliable method based on the available data.

Moreover, the U.S. tends to favor methods that rely on publicly available comparable data, like CPM, whereas the OECD may place greater emphasis on methods like the Profit Split Method in cases involving valuable intangibles or highly integrated operations.

Understanding these nuances is critical for foreign multinationals acquiring U.S. targets, as they must ensure that their transfer pricing strategies comply not only with international norms but also with specific U.S. regulatory expectations.

The OECD’s five methods fall into two categories: traditional transaction methods and transactional profit methods. Traditional transaction methods focus on comparing specific terms or prices of transactions between related companies with independent ones, while transactional profit methods focus on comparing the overall profits of related companies with those of independent companies.

Traditional Transaction Methods

• Comparable Uncontrolled Price (CUP) Method
  The CUP method compares prices between related companies with prices between unrelated companies. This method is most effective when there are sufficient comparable transactions between independent entities to establish a benchmark. For example, a U.S. car rental company may price the use of its brand for a Canadian subsidiary by comparing it to an independent deal with a third-party car rental company.
• Resale Price Method (RPM)
  The RPM uses a product’s resale price and subtracts a gross margin based on comparable transactions. It is commonly applied when goods are purchased from a related party and resold to an independent third party. For example, a U.S. shoe distributor may buy from an Irish affiliate and compare the price to that of an unrelated supplier. The gross margin from the unrelated supplier sets the price for the related party.
• Cost Plus Method (CPLM)
  The CPLM adds a market-based profit margin to the cost of producing goods. It is typically used for routine manufacturing or distribution activities. For example, a French company selling goods to its German parent may apply a markup based on comparable market transactions.

Transactional Profit Methods

• Comparable Profits Method (CPM)
  The CPM compares the net profit from a controlled transaction to the net profits from similar transactions between unrelated companies. This method is widely used and relatively easy to apply when financial data is available. For example, a U.S. clothing company with a Canadian distributor may compare the Canadian distributor’s profit margins to those of similar companies in Canada.
• Profit Split Method (PSM)
  The PSM is used when related companies collaborate on a joint project or product and split profits based on their contributions. For instance, a pharmaceutical company and its R&D affiliate may agree to split profits based on the investments each entity made in developing a new drug. While useful for highly integrated businesses, the PSM can be subjective and difficult to apply, potentially leading to disputes with tax authorities.

The case of Coca-Cola Co. v. Commissioner of Internal Revenue highlights the complexities of transfer pricing. Coca-Cola contested the IRS’s retroactive decision to change the transfer pricing method it had been using for years. Initially, the IRS approved the “10-50-50” method for allocating profits between Coca-Cola and its foreign affiliates, allowing affiliates to profit on 10% of gross sales before splitting the remaining profits “50-50” with Coca-Cola. However, the IRS later switched to the Comparable Profits Method (CPM), reallocating a significant portion of income back to Coca-Cola and increasing the royalties owed by affiliates to Coca-Cola. Coca-Cola argued that the change was arbitrary and violated administrative law principles. The IRS, however, emphasized that the affiliates lacked ownership of key intangible assets like trademarks, which Coca-Cola solely owned. The application of CPM, which compared the profitability of Coca-Cola’s affiliates to independent bottlers, aimed to allocate profits more accurately according to the arm’s-length principle. The Tax Court upheld the IRS’s decision, stating that the switch was appropriate. This case underscores the unpredictability in transfer pricing assessments and the challenges multinational corporations face when tax authorities contest established methods.

To mitigate transfer pricing risks in cross-border M&A transactions, companies must establish clear and transparent pricing policies that comply with domestic and international tax regulations. Best practices include maintaining thorough transfer pricing documentation, conducting regular audits, and staying updated on regulatory changes. Additionally, foreign-owned companies should periodically reassess intangible asset valuations and global pricing strategies to ensure compliance with evolving tax laws.

Integrating transfer pricing considerations into the M&A due diligence process is also crucial. This will ensure that any pre-existing transfer pricing risks or issues are identified and addressed before the deal is finalized. By taking proactive measures to manage transfer pricing risks, multinational companies can minimize the likelihood of tax disputes and position themselves for long-term success in the global market.

In conclusion, effective transfer pricing strategies are vital to successful cross-border M&A transactions. By understanding the complexities of international tax regulations and choosing the appropriate transfer pricing methods, companies can navigate the risks, ensure compliance with the arm’s-length principle, and avoid costly disputes. These strategies will ultimately help companies mitigate tax risks and achieve sustainable success in an increasingly interconnected global marketplace.