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 […]
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, […]
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 […]
“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 […]
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 […]
So you’ve been hammering away, putting your life savings into your new startup (plus maxing out your credit cards) and now you have investors willing to put money into your company. How should the money you contribute before investors be treated? And how do you to get […]
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 […]
A great estate plan is like a business plan for yourself and those most important to you. Just as a business plan is a road map to long-term success, an estate plan is a road map to achieving peace of mind for your family and perhaps even your business partners. As we have heard many times before, there is no escaping death and taxes, so we might as well plan for both. And yet, when we work with founders, we often find that they are so consumed with running their businesses that their estate plans—their “personal” business plans—are in disarray or nonexistent. Below are a few pointers to help you begin to chart a course in estate planning.
One of the first steps in forming a startup, even before any documents are drafted or signed, is creating a capitalization or “cap.” table illustrating the ownership of the company. As companies grow and issue more stock to raise capital or compensate employees, their cap. tables can […]
In a previous Founder Tip of the Week, I discussed what vesting is. In this Founder Tip of the Week, I will discuss some common vesting schemes. Employees The norm for options granted to employees is that they vest ratably monthly over four years.
