Showing Andrew Shawbers posts


Use a Term Sheet Before You Incorporate

Lawyers will tell you it’s important to incorporate your company as soon as you possibly can to avoid personal liability and to settle all outstanding matters among the founders. That’s good advice, but the place to start is with a Term Sheet for the incorporation.

Crowdfunding is not what it’s cracked up to be

On April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act (aka the JOBS Act), which included the cleverly titled Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act, or “CROWDFUND Act.” The CROWDFUND Act established a securities law exemption (codified at Section 4(a)(6) of the Securities Act) allowing startups to raise funds under conditions that would have previously been considered a general solicitation.

Founders’ Preferred Stock

What is founders’ preferred stock? Founders’ preferred stock (also called series FF preferred stock) addresses certain tax and accounting issues that can arise when founders decide to get early liquidity by selling shares of their stock to investors at the same price as other preferred stock sold […]

You’ve Got VC Money: The Punchlist

As outside counsel to thousands of VC-backed startups, we are often asked the same questions about what startups need to do after raising their first round of VC financing. Here is a quick and dirty list of those next steps. The action items below are described in […]

You’ve Got VC Money: Board Meetings

Board meetings are your opportunity to check in with and give an update to your bosses and get feedback and guidance from the experienced members of your board. It is common for VC-backed startups to have four to six board meetings per year, though this frequency can […]

You’ve Got VC Money: Board vs Stockholder Approval

While your financing agreements might have other requirements, below is a nonexhaustive list of the types of corporate decisions that typically require board and/or stockholder approval: Board Approval Is Required to: Stockholder Approval Is Required to: Amend the charter or bylaws. Approve significant corporate transactions (e.g., sale […]

You’ve Got VC Money: Review your IP strategy

After raising a significant amount of cash from VC investors, it is time to do a top-to-bottom review of your company’s intellectual property (IP) portfolio. To get started, here’s an overview of the four main types of IP: Patents protect rights regarding inventions and discoveries, such as […]

You’ve Got VC Money: Cap Tables

Get a Cap Table Platform The company’s cap table is a historical record of who owns how many shares of the company’s stock, stock options, warrants, convertibles, and other ownership stakes in the company. As a VC-backed company with a more complicated cap table, you must keep […]

You’ve Got VC Money: Securities Laws

Since you’ve already raised a significant VC round, you should already be familiar with the process for issuing securities to investors. Here is a refresher if you need it. Securities Laws Overview All sales, purchases, and offers to sell or purchase shares of stock or other securities […]