Showing Andrew Shawbers posts


The Human Capitalist Series P.10: Early Exercise Stock Options

Normally, a stock option can be exercised only with respect to the vested portion. “Early exercise” stock options allow a service provider (employee, contractor, etc.) to exercise a stock option with respect to some or all of the unvested portion. The early exercised shares are shares of…

How Forming Your Startup as an LLC Could Maximize Qsbs Benefits

In the tech startup world, limited liability companies (LLCs) are fairly uncommon, for some very good reasons. However, in certain circumstances startups can utilize the LLC structure at formation to help maximize the potential qualified small business stock (QSBS) gain exclusion upon the sale of stock of…

What Is Shadow Preferred Stock?

“Shadow preferred stock” refers to a series of preferred stock that is created when a SAFE or convertible note converts into stock at a price per share that is less than the price per share for the stock issued in a new equity financing. Shadow preferred stock…

A Crash Course on SAFEs

Here are some important things to keep in mind if you are considering raising capital in a SAFE round. What’s the Difference Between a SAFE Financing and a “Priced Round?” When raising capital, one of the main considerations is whether to (a) use a convertible security, like…

Overseas founders and employees: What do I need to know?

Businesses face several considerations when onboarding founders or employees who reside in foreign countries. These issues also apply to U.S.-based founders and employees who move to a foreign jurisdiction and work remotely.

Should We Include Transfer Restrictions in Our Bylaws?

Transfer restrictions are one of the principal tools that startups use to prevent secondary transfers of their capital stock and maintain tight control over their cap tables. The majority view in the market is that it is best to omit transfer restrictions from the bylaws because future…