Leasing Your Office Or Facility – What Are You Getting?

Negotiating a lease for your company’s office or facility can be precarious. Real estate is not your core business, and you do not want to spend tremendous time (or expense) finalizing the lease document. In addition, start-ups and emerging companies without strong financials do not enjoy significant leverage in strong real estate markets.

Delaware Franchise Taxes 101

Sometimes, about January, I get an urgent call from a founder telling me that his or her corporation has received a franchise tax bill from the State of Delaware for tens of thousands of dollars.

Special Classes of Founders Stock

The vast majority of technology startups are capitalized in the same manner: common stock to the founders, common stock reserved in an option pool for employees and consultants, and preferred stock (Series A, Series B, etc.) sold to investors. However, a small but probably growing percentage of startups consider a more complicated stock structure that includes, in addition to the types of equity above, a special class of common stock reserved for founders.

Fund GENEROUSLY to Milestones

Founders often seek advice regarding the amount of capital to be raised. The conventional wisdom is to raise sufficient capital to permit the company to achieve a milestone that will result in a material increase in the company’s value. The milestone might be…

Post-Employment Noncompetition Obligations Are Generally Unenforceable In California

For a start-up company, noncompetition agreements typically arise in one of the following contexts; a founder or new employee entered into a confidential information and inventions assignment agreement (or similar agreement) with his or her former employer that prohibits competing with the former employer, the start-up company wants to prohibit a terminated employee from competing with the company, or in an acquisition, the buyer demands a founder and/or key employee sign a noncompetition agreement.

Maintaining Good Corporate Hygiene

As a founder of a start-up company, you will likely be spending the bulk of your time refining your business plan, pitching your ideas to VCs and looking for talented and experienced employees to fill out your team. Admittedly, in the early days, you probably won’t have much time for anything else, including attending to corporate formalities. However, giving some early attention to establishing and maintaining good corporate hygiene will pay dividends down the road that far exceed the fairly nominal investment required up front, especially when it comes to raising money or gearing up for an ultimate exit, such as a sale of the company or IPO. Here are a few fairly simple things that every start-up should do early in its lifecycle.

83(b) Election Basics

We find ourselves explaining 83(b) elections several times a week, so we thought it would be a good blog topic.
In the start-up world, the opportunity to file of an 83(b) election generally arises in the context of a founder purchasing low-priced “founder” common stock of a start-up company that is subject to vesting, or an employee, director or other service provider of such a company “early exercising” an option for stock that is subject to vesting. Such stock is sometimes also referred to as “unvested” stock or stock subject to “reverse vesting.” All this means is that…

Take A Step Back To Take A Leap Forward

The introduction of a disruptive technology leads to the collapse of sales of recorded music. Does this refer to the impact of legal and illegal digital music downloads on CD sales? Certainly.

How to Use an Advisory Board

Advisory boards are powerful tools used by companies at all stages of development. Advisory boards are generally comprised of business leaders, scientists, professionals or other persons of influence. Advisory boards can have general duties, such as providing critical advice and introductions, or they can be more issue-focused, such as advising on specific industry sectors or particular products, transactions or other critical strategic decisions.