Should We Include Transfer Restrictions in Our Bylaws?

Transfer restrictions are one of the principal tools that startups use to prevent secondary transfers of their capital stock and maintain tight control over their cap tables. The majority view in the market is that it is best to omit transfer restrictions from the bylaws because future…

Five Steps for Collecting Stockholder Consents by Email

Collecting stockholder consent by email can be more complicated than collecting director consent by email. If your company is incorporated in a state that permits stockholders to consent by electronic transmission, developing a process for collecting these consents is key to ensuring that the stockholder action is…

The Trouble with Using Finders to Raise Funds

Sometimes a company will engage a “finder” to help it find financing. I always tell founders that they should confer with the company’s legal counsel when considering whether to engage a finder.

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.

Conduct Research on Potential Investors

Raising capital for a new startup can be a daunting task for the founders. There are several types of investors and capital sources for startup projects, including friends and family members, angel investors (high net worth individuals), venture capital funds, corporate/strategic investors, and government grants. Each of these capital sources has different investment criteria and expectations.