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 […]

Anatomy of a Startup Cap. Table

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 […]

Vesting Basics – What are typical vesting schemes?

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.

Seeing the Big Picture

When starting a new company, it’s easy to focus entirely on the business you are building, but it’s also important to make sure that you see the big picture . Here are three areas to keep covered…

A Start-up’s First Office Lease Agreement – Focus on the Economics

Nearly every start-up begins in a garage, basement or home office. Some of today’s largest technology companies fall into that category, including Google, Apple, Hewlett-Packard and Amazon. But, at some point hopefully, the start-up outgrows its humble beginnings and needs to lease office, retail or storage space in order to meet consumer demands.

IPO? What You Need to Know: The Organizational Meeting

The market for initial public offerings continues to heat up. Once your company has selected the managing underwriters for the offering and wants to begin the IPO process in earnest, an organizational meeting with management, the underwriters, counsel and possibly the auditors will be scheduled.

Do I need to file a Section 83(b) election if vesting is imposed on my stock after it has been issued?

In a prior Founder Tip of the Week we discussed how the Internal Revenue Code (the “Tax Code”) characterizes unvested founder stock as not being purchased until it has vested, and that this characterization can have adverse tax consequences for the founder because the Tax Code treats as taxable income the excess, if any, of the fair market value of stock at the time it vests over the purchase price of the stock (the “spread”).