For decades, Delaware has been the go-to jurisdiction for businesses looking to incorporate in the United States. Delaware’s business-friendly laws, well-established legal precedents, and efficient chancery court system have made it a favorite among entrepreneurs and large corporations alike. Notably for tech startups, these same features also […]
Venture capitalists (VCs) play a crucial role in the startup ecosystem by providing the necessary funding to help emerging companies grow and scale. However, before VCs decide to invest, they must determine the value of the company in question. Valuing a startup is a complex process that […]
In contrast to the duties that corporate boards of directors owe to shareholders, LLC fiduciary duties is a topic that often goes under the radar yet holds significant legal and operational implications.
Equity refers to the ownership of a company, typically in the form of stock or the right to acquire stock. While you can’t pay employees solely with equity, startups commonly use equity to incentivize their employees and attract talent.
Choosing the right business structure is a critical decision for any startup. The choice often boils down to two popular options: Limited Liability Companies (LLCs) and C-Corporations (C-Corps). Both have distinct advantages and drawbacks that can significantly impact the growth, management, and taxation of your business.
A common misconception in the startup world is that venture capital (VC) fundraising grinds to a halt during the summer months. However, data from Carta Market Research challenges this notion, revealing that fundraising activities persist year-round, including during the traditionally “slow” summer period.
When hiring employees, a company should ensure it is complying with applicable federal, state, and local laws regarding employee minimum wages, withholdings, and other applicable requirements. To ensure compliance, employers must first determine whether an employee is “exempt” or “nonexempt.” Nonexempt employees are entitled, among other things, […]
We have covered in past FTTWs how to value your startup and how much capital to raise. Once your startup decides to pursue equity financing, you should start to prepare for the investor due diligence process. On the business side, you will need to prepare a business plan and should take steps such as obtaining management references, interviews and background reviews, customer/user references, technical/product reviews, financial statements and business model reviews.
On Wednesday, June 26th, Perkins Coie’s Palo Alto office hosted the startupPerColator event, “What Every Startup Needs to Know.” Lowell Ness, a Perkins Coie partner in the Emerging Companies & Venture Capital (ECVC) practice, moderated a panel which included Herb Stephens of NueHealth, Thomas Huot of VantagePoint Capital, Jennifer Jones of Jennifer Jones and Partners, Yuri Rabinovich of Start-up Monthly, and Olga Rodstein of Shutterfly.
The “Series A Crunch,” which is the significant decline in the number of startup companies per quarter that are completing their first equity financing, appears to be deepening.
Lawyers will tell you it’s important to incorporate your company as soon as you possibly can to avoid personal liability and to settle all outstanding matters among the founders. That’s good advice, but the place to start is with a Term Sheet for the incorporation.
On April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act (aka the JOBS Act), which included the cleverly titled Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act, or "CROWDFUND Act." The CROWDFUND Act established a securities law exemption (codified at Section 4(a)(6) of the Securities Act) allowing startups to raise funds under conditions that would have previously been considered a general solicitation.
On Thursday, April 4th, Perkins Coie’s Palo Alto office hosted the startupPerColator Series event, “Seed Investments: How to Be Attractive to Early Stage Investors and the "Right" Seed Investment Structure for You.”
Summer is often the season when employers consider hiring interns, but there is never a wrong time to brush up on the wage-and-hour laws surrounding paid and unpaid interns. Startup companies may view an internship program as an opportunity to hire students and develop unpaid internship programs. […]
Congratulations! After months of networking, pitch meetings, phone calls, and negotiations, you’ve finally signed a term sheet for your company’s first round of venture financing. What you face next could be one of the biggest hurdles to successfully closing your round—the due diligence process. Read on for […]
October 17, 2023 BBG Ventures & Perkins Coie co-hosted a Term Sheet Tear Down Happy Hour during NY Tech Week, teaching women and diverse founders the intricacies of term sheet negotiation and “founder-friendly terms.” The interactive conversation with BBGV Principal Claire Biernacki and Perkins Coie Counsel Yashreeka […]
“Dead equity” refers to company stock owned by individuals and entities no longer contributing to the company. In general, there are two types of dead equity seen on emerging company cap tables: Departed founders/employees. A co-founder or early employee leaves a company or no longer significantly contributes […]
As startup lawyers, we often receive inquiries from passionate entrepreneurs and founders seeking guidance on when they should consider taking their side projects to the next step by forming a legal entity. Forming a company is a “crossing the Rubicon” moment for any startup. It’s an essential step […]
Given this week’s headlines, many emerging companies may be asking themselves: “Why am I holding so much cash?” The Investment Company Act of 1940 (the 1940 Act) may be to blame. “But I don’t have any intention of being an investment company. Aren’t those mutual funds or […]
Regardless of its financial situation, a corporation’s board of directors owes fiduciary duties to the corporation. Boards of directors of emerging companies, like mature companies, should understand the scope of their fiduciary duties and to whom and what those duties extend as they respond to the corporation’s […]
