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…

Live by Series A Representations from the Time of Formation

“All outstanding shares of the Company’s Common Stock . . . are subject to (i) a right of first refusal in favor of the Company upon any proposed transfer . . .; and (ii) a lock-up or market standoff agreement . . . .” –National Venture Capital…

How to Save Time and Money When Working With Lawyers

New founders often approach service providers generally, and lawyers in particular, with a degree of caution.  They’re typically aware that they need advice, but they’re concerned that obtaining such advice will come at a cost, which most startups would prefer to avoid given the need to focus…

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…