SAFEs and convertible debt financings broadly accomplish the same goals for early-stage (and even later-stage) emerging companies. The legal and negotiation costs of these instruments are typically an order of magnitude less than a traditional “equity” financing (Series Seed, Series A-Z, etc.), and for the most part […]
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 […]
Augmented reality (AR) and virtual reality (VR) have taken major steps forward this year with the groundbreaking launch of Pokémon GO in July 2016 and the release of several VR headsets. As the startup world convenes in San Francisco this week at TechCrunch Disrupt 2016, Perkins Coie […]
Most entrepreneurs will need to raise a small round of capital very early in their company’s life cycle to get the company off the ground. The amount is typically anywhere from $100K to $500K and is utilized to build the MVP (minimum viable product) and secure initial […]
For entrepreneurs operating in innovation-driven marketplaces, protection of intellectual property is of foremost concern. Accordingly, startups should require each employee and independent contractor they engage to enter into a Proprietary Information and Inventions Agreement. While agreements of this nature go by several different names (e.g., Confidential Information […]
When developing your investor pitch materials, it is important to approach the process as a competition for the investor’s attention. Most companies view their competition as the handful of companies that service their particular market segment. When it comes to raising capital, you are actually competing against […]
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 […]
During its life cycle, a typical company enters into several key transactions. These can include debt and equity financings, an exclusive license of the company’s proprietary technology or an acquisition of the company by a strategic buyer. Before signing the “definitive agreement” for a key transaction, however, […]
Our company clients often come to us at an early stage in their growth process with some variation of the following question: “We were introduced to an amazing resource who can help our team grow the business in a material way. We’re considering putting the person on […]
In this final installment of “I Got You Covered,” we provide a number of risk management tips with a focus on additional insured status. Although this list isn’t comprehensive, it covers the major risks that an additional insured should consider to actively protect its company and its […]
In this installment of “I Got You Covered,” we discuss the benefits and drawbacks of additional insured status. Benefits of Additional Insured Status There are a number of reasons why a company would seek additional insured coverage. These include the following: Accessing Someone Else’s Insurance. At the […]
“I got you, Babe.” It’s not just the title of a 1965 Sonny and Cher hit—it also aptly describes the relationship between a named insured and its additional insured. To clarify, an additional insured may be able to access the coverage provided by the named insured’s liability […]
“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 […]
Many of the benefits of raising a Series A round are obvious—improved team morale, validation from outside investors and, of course, cash. Another benefit may be less obvious—raising a Series A round can open up new sources of capital, including venture debt. “Venture debt” is a type […]
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 […]
Patents are important to startups because they provide a legally sanctioned monopoly that bars entry to competitors. In addition, patents may serve defensive purposes in that competitors may be less likely to sue a startup for patent infringement if there is a risk of a countersuit. Further, […]
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 […]
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 […]
