When Should I Form a Legal Entity?

As startup lawyers, we often receive inquiries from passionate entrepreneurs and founders seeking guidance on when they should consider taking their side projects to the next step by forming a legal entity. Forming a company is a “crossing the Rubicon” moment for any startup. It’s an essential step […]

Hot Tax Deal: Qualified Small Business Stock

Startup founders and investors could miss out on huge tax savings if they fail to consider the potentially significant tax benefits of holding qualified small business stock (QSBS). Why it Matters Stockholders may potentially exclude from income all or a portion of any gain recognized on the […]

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 […]

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 […]

Surprise! Interns are Likely Employees.

As the summer quickly approaches, it’s the time of year that many employers consider hiring an intern for the summer.  Start-up companies may view this as an opportunity to hire students as “cheap” or “free” labor.  Unfortunately, there are a lot of misconceptions about unpaid interns.  The […]

The Delaware Franchise Tax: Don’t Freak Out

Within the next few weeks, corporations incorporated under the law of Delaware will receive ominous notices from their registered agents or the Delaware Divisions of Corporations advising such corporations of their annual obligation pay the their Delaware Franchise Tax. Save for “83(b) elections,” “scalability” and “valuation”, no […]

Perfecting the Pitch – Solve Big Problems with Unique Solutions

When developing your investor pitch materials, it is important to approach the process as a competition for the investor’s attention. Most companies view their competition as the handful of companies that service their particular market segment. When it comes to raising capital, you are actually competing against […]

Startup Operations – Identifying & Navigating Legal Risks

Many entrepreneurs have a good understanding of statutory limitations and regulatory constraints on the operations of the businesses they are starting.  That understanding often comes as a result of familiarity gained from years of experience operating in an industry.  Other entrepreneurs may be newer to an industry, […]

Maintain the Limited Liability Shield

Entrepreneurs should form a business entity as soon as they embark on a new startup venture.  A key feature of business entities (e.g., corporations or limited liability companies) is limited liability, meaning that the assets of the owner of the business available to satisfy claims against the […]

Board Advice: Adding Advisors Versus Adding Directors

Our company clients often come to us at an early stage in their growth process with some variation of the following question: “We were introduced to an amazing resource who can help our team grow the business in a material way.  We’re considering putting the person on […]