Founder Tip Of The Week

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"I do not think there is any thrill that can go through the human heart like that felt by the inventor as he sees some creation of the brain unfolding to success." - Nikola Tesla

Patents Are Important to Startups

Patents are important to startups because they provide a legally sanctioned monopoly that bars entry to competitors. In addition, patents may serve defensive purposes in that competitors may be less likely to sue a startup for patent infringement if there is a risk of a countersuit. Further, a startup can use the

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Securities Law Exemptions to Consider

We often find our clients puzzled by the registration requirements of the Securities Act of 1933 and the various state-specific “blue sky” laws applicable to their private placement offerings.  This week’s tip reviews two exemptions—one federal and one specific to California—that are commonly relied on to avoid these onerous registration requirements. Rule

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Privacy and Advertising: Self-Regulation 101

A couple of months ago, we gave you five privacy tips relevant to startups and told you about the consequences startups face from regulators if they fail to protect their users’ privacy. Regulators like the Federal Trade Commission (FTC), the Federal Communications Commission (FCC), the Consumer Financial Protection Bureau (CFPB), state Attorneys

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Five Steps for Collecting Stockholder Consents by Email

Collecting stockholder consent by email can be more complicated than collecting director consent by email. If your company is incorporated in a state that permits stockholders to consent by electronic transmission, developing a process for collecting these consents is key to ensuring that the stockholder action is effective. Generally, the stockholders of

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Options – Structural Elements

Stock options – the right to purchase stock in the Company at a fixed price (“exercise price”) for set period of time-generate many of the questions facing a startup lawyer.  This relates to the popularity of options as a way to compensate employees and contractors. Benefits: Properly structured options are not taxable on grant.  Companies

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Top 5 Insurance Products for Startups

Q:  How should I invest in insurance for my startup? What types of insurance do I need? What can I expect from the claim process? A:  A full risk assessment of your company’s developing business requires an audit of your potential liabilities.  However, as a general rule for startups, the following

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Protect Your Earnout

The most common exit for early-stage companies is acquisition by another company.  Because early-stage companies by definition do not have a long history of revenue and earnings performance, it can be difficult for the buyer and seller to agree on valuation.  The seller will argue for a high valuation based on

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Top 5 Privacy Tips for Startups

Startups have bigger concerns than privacy, or so they think. Many startups have learned that being young and small does not keep them off the radar screens of privacy regulators, and they can be vulnerable to costly investigations.  Privacy issues that come to light in the course of the due diligence process

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