Every startup will eventually have contracts with third-party vendors and suppliers to provide goods and services to the company. Taking proactive steps to ensure that the insurance requirements in your vendor contracts accurately reflect the needs of your company is vital to avoid complicated insurance issues and […]
In the tech startup world, limited liability companies (LLCs) are fairly uncommon, for some very good reasons. However, in certain circumstances startups can utilize the LLC structure at formation to help maximize the potential qualified small business stock (QSBS) gain exclusion upon the sale of stock of […]
“Shadow preferred stock” refers to a series of preferred stock that is created when a SAFE or convertible note converts into stock at a price per share that is less than the price per share for the stock issued in a new equity financing. Shadow preferred stock […]
Here are some important things to keep in mind if you are considering raising capital in a SAFE round. What’s the Difference Between a SAFE Financing and a “Priced Round?” When raising capital, one of the main considerations is whether to (a) use a convertible security, like […]
Businesses face several considerations when onboarding founders or employees who reside in foreign countries. These issues also apply to U.S.-based founders and employees who move to a foreign jurisdiction and work remotely.
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. Why include? As secondary sales of restricted securities become more common, perhaps as a result of blockchain-based digital securities being […]
The difference is in the potential dilutive impact of the SAFE on founders. Post-money SAFEs can dilute founders significantly more than pre-money SAFEs. When SAFEs with a valuation cap convert to equity in a future financing, the price at which they convert is determined as follows: SAFE […]
Should you file a patent application or keep your innovation a trade secret? This question is routinely asked by key decision makers, such as inventors, managers, and legal counsel, when evaluating a new invention. While either choice comes with its own set of advantages and trade-offs, an […]
The purpose of negotiation is to obtain improved transaction terms. Although negotiation is commonly thought of as a series of discussions in which each party advocates for its position, the best results often derive from a structured process that forces multiple parties to compete for the deal. […]
Startups have a long to-do list, and it can be tempting to put off tackling important work around branding until just before launch. Don’t push the pause button on branding considerations. Strategizing around branding in the early days of your business pays dividends. Your branding goal is […]
