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Do It Right The First Time, Part II: Visit the Doctor or House Call?

Gust

Form a legal entity to operate the business (we’ll use a Delaware corporation as an example for Newco). Consummate the stock issuances, make any necessary securities filings and issue the corresponding stock certificates. Determine who will serve on the Board of Directors and in executive officer positions (usually founders).

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The 5 Biggest Legal Mistakes That Startups Make

Scott Edward Walker

Mistake #2 : not buttoning-down IP ownership issues (at 10:20). Mistake #4 : not complying with applicable securities laws (at 29:21). you want to form a Delaware corporation. Mistake #2: Not Buttoning-Down IP Ownership Issues. Mistake #4: Not Complying with Securities Laws. doing this for 18+ years.

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The 5 Biggest Legal Mistakes That Startups Make

Scott Edward Walker

i) Rule 506 preempts State law, which means all you have to do is file a Form D and pay a filing fee; and (ii) no disclosure requirement/PPM Possible to sell to “friends and family” (e.g., issues to address include: How have they treated their other portfolio companies?