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A Business Plan For Your Life (And Your Death)

StartupPercolator
A great estate plan is like a business plan for yourself and those most important to you. Just as a business plan is a road map to long-term success, an estate plan is a road map to achieving peace of mind for your family and perhaps even your business partners. As we have heard many times before, there is no escaping death and taxes, so we might as well plan for both. And yet, when we work with founders, we often find that they are so consumed with running their businesses that their estate plans—their "personal" business plans—are in disarray or nonexistent. Below are a few pointers to help you begin to chart a course in estate planning.

Identifying Employees for Your Startup

StartupPercolator
The right employees help your startup rise to the top. Identifying those employees early can save time and money. The infographic below created by FocusHR points out some of the innovative strategies companies like Zappos and Google employ to find dedicated employees and create a collaborative work environment.

Anatomy of a Startup Cap. Table

StartupPercolator
One of the first steps in forming a startup, even before any documents are drafted or signed, is creating a capitalization or “cap.” table illustrating the ownership of the company. As companies grow and issue more stock to raise capital or compensate employees, their cap. tables can […]

How to Prepare for and Win a Pitch Competition

StartupPercolator
The second annual SXSW V2Venture pitch competition took place on Wednesday, July 16 in Las Vegas. During this no-holds-barred, Vegas-style pitch competition, a live audience, along with a panel of expert judges, discovered advancements in various sectors of emerging technology. Following the competition, the winning companies were […]

Startup Funding 101

Just as an individual founder has their own style when running a company, each has her/his own preferred funding strategy. Check out the infographic below which identifies four funding styles founders typically use to launch and grow their startups.

Seeing the Big Picture

When starting a new company, it’s easy to focus entirely on the business you are building, but it’s also important to make sure that you see the big picture . Here are three areas to keep covered...

The Problem With Percentages

StartupPercolator
Unfortunately, too often I hear founders say things like “I promised her options for 2% of the company,” or worse, we see statements to that effect in employee offer letters or other agreements. In the worst cases, founders will even expressly agree to issue an investor or service provider a “fixed percentage” of the company’s ownership going forward.

A Start-up’s First Office Lease Agreement – Focus on the Economics

StartupPercolator
Nearly every start-up begins in a garage, basement or home office. Some of today’s largest technology companies fall into that category, including Google, Apple, Hewlett-Packard and Amazon. But, at some point hopefully, the start-up outgrows its humble beginnings and needs to lease office, retail or storage space in order to meet consumer demands.

Do I need to file a Section 83(b) election if vesting is imposed on my stock after it has been issued?

In a prior Founder Tip of the Week we discussed how the Internal Revenue Code (the “Tax Code”) characterizes unvested founder stock as not being purchased until it has vested, and that this characterization can have adverse tax consequences for the founder because the Tax Code treats as taxable income the excess, if any, of the fair market value of stock at the time it vests over the purchase price of the stock (the “spread”).

Get to Know the Delaware Public Benefit Corporation

StartupPercolator
A new Delaware law, signed on July 17 by Gov. Jack Markell, allows companies to be formed as public benefit corporations (PBCs), which balance stockholders’ returns, the impact on other people affected by a company's business activities, and the creation of an overall public benefit. Starting on August 1, Delaware companies will be able to form or reincorporate as PBCs, or merge with PBCs.

Include a Capitalization Table in the Term Sheet

Whether a financing, merger or other acquisition, or other major transaction, parties often outline the major provisions in a non-binding term sheet or letter of intent. A principal benefit of this approach it to help the parties identify major areas of disagreement early to avoid wasted expense on additional diligence and drafting of the definitive agreements.

Three Steps to Limit Liability and Avoid Veil Piercing

StartupPercolator
A corporation is a separate entity with its own liabilities for which the individual owners cannot be held personally liable. It is a concept that is old as dirt and right as rain, right? Surely everyone accepts this basic premise of doing business as a corporate entity? Well, perhaps everyone but the plaintiff’s attorney seeking to hold someone with deep pockets financially responsible for his client’s injuries.

Term Sheet Basics – Dilution

Dilution is a term that is frequently discussed in the context of preferred stock financings. However, it is important to understand that there is a difference between dilution in the general sense and the type of dilution with respect to which preferred stockholders receive protection.

Term Sheet Basics – Pre-money Valuation

“Pre-money” or “pre-money valuation” is a term that entrepreneurs will hear and use a lot in the context of securing equity financing, so I thought it would be a good idea to make sure entrepreneurs have a clear understanding of it.

“Backdating” In M&A?

StartupPercolator
The date of an agreement is an important part of most business transactions and M & A is no exception. Many acquisition agreements begin with an “Agreement between” the parties “effective as of” a given date. Does it matter if this effective date is prior to the date the parties actually entered into the agreement? And if so, is this ‘backdating’ problematic or even potentially illegal?

Promising Board Seats to Your Investors the Right Way

StartupPercolator
A commonplace among emerging companies is the need to promise investors seats on the board of directors. For a lot of different reasons, it makes sense to make this promise. It is usually a condition to receiving the investor’s capital, so there’s that.