Startup Company Lawyer

APRIL 23, 2009

Adeo Ressi , the founding member of The Funded , recently announced the establishment of The Funded Founder Institute. The program participants, the Founders, receive extensive training in weekly sessions overseen by three Mentors – two seasoned CEOs and one domain expert for each topic. Protective provisions.

Common Stock 33

Common Stock Stock Dividend Delaware 33

Both Sides of the Table

MAY 13, 2013

I’m supposed to believe that my best innovation can only come from scores of startup founders who just made millions and have now become CVOs at my company? If the money comes from professional investors it usually has a “liquidation preference” meaning that their money comes out before the founders or common stock. (If

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

www.inc.com

SEPTEMBER 24, 2011

Naming a Business. Last spring, Dave Graham , founder of software consulting firm Arizona Bay, learned that a major client, Jumpstart Automotive Media, had been acquired for more than $80 million. Kyle retained the right to name the third board member. Tools & Research. Newsletters. Subscriptions. Advisor. ); STARTUP.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Startup Company Lawyer

MARCH 14, 2010

Founders Institute Plain Preferred Term Sheet (by WSGR – disclaimer, I represent the Founders Institute and was involved in drafting this document). Name of security. Pro rata with common. Pro rata with common. Yes for Series Seed holders and founders. Legal fees. Series Seed. Y Combinator. Drag-along.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

www.mattbartus.com

SEPTEMBER 24, 2011

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. First, you’d probably want them to receive common stock, not preferred stock (which is the likely next round). Is it atypical for founders to vest more than 25% of their equity after one year?

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Gust

DECEMBER 8, 2011

Likewise, founders can benefit from understanding basic characteristics of the overall legal structure, formation and governance documents, rights and responsibilities of team members, etc. Pick a name for the new legal entity (e.g., Make escrow arrangements for restricted stock (i.e., Newco, Inc.”)

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

ithacaVC

DECEMBER 13, 2013

They are typically pretty simple: (i) shares owned by founders and (ii) shares authorized for issuance in a stock option pool, some of which may be issued to employees already and some of which will be available for future issuance. If no additional equity is ever granted to Founder X and Founder Y, then Founder Y will ALWAYS own 1.63

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

Startup Lessons Learned

AUGUST 26, 2009

They take common stock, not preferred, a fact that the entrepreneurs mentioned to me many times. Accept that many successful companies are going to want to be backed by big-name firms in other cities. They dont invest a lot of money; just enough to keep them going through the summer.

San Francisco 113

San Francisco Silicon Valley Startup Lean 113

Growthink Blog

APRIL 7, 2010

For those of you who don't understand the term "Series A," the Series A round is the name given to your first significant round of venture financing. The name "Series A" refers to the class of preferred stock that you sell to investors in return for their cash.

Angel Investor 54

Angel Investor Preferred Stock Venture Capital Common Stock 54

www.payne.org

SEPTEMBER 22, 2011

2 Stock Classes: Common and Preferred. 5 Stock vs Options. 6 Founders / Restricted Stock. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers. From Payne.org Wiki.

Equity 56

Equity Employee Vesting Preferred Stock 56

Growthink Blog

MAY 10, 2012

Take the founder of Wrigley's chewing gum, who began selling baking powder and soap door-to-door and giving away gum as a bonus before discovering people wanted it a lot more than soap. The name is derived from the class of preferred stock investors receive in return for their capital.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

The Startup Lawyer

FEBRUARY 4, 2011

But before your startup signs up and cashes that $[XX,000] check, your startup’s co-founders should sit down and evaluate the incubator’s offer. Most incubators take common stock and sit “side-by-side&# with the founders, but some may want some (weak) preferred stock and/or dilution protection.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

Up and Running

NOVEMBER 23, 2010

Rand keeps it anonymous, which is just as well; a piece like this would be really hard to do with specific names and faces. But, tragically, 3 years after their apex, this firm sold for less than their annual revenue, laid off nearly the entire staff, and left common stock shareholders, my friends included, with nothing.

Common Stock 63

Common Stock Stock Options Stock Cofounder 63

The Entrepreneurial Mind

MARCH 10, 2010

In return for this investment, JumpStart Foundry will receive a collective 10% ownership in the Common Stock of the company. According to founding member Scott Kozicki, "the JumpStart Foundry name is meant to be symbolic of our two-fold mission. The fund intends to help launch or "jump-start" emerging new business concepts.

Nashville 53

Nashville Tennessee Early Stage Common Stock 53

Professor VC

JULY 25, 2013

I''m a strong believer in fairness (although my daughters may not agree) and investors and entrepreneurs working together as a team to create something valuable to all stakeholders (customers, employees, founders, investors). Finally, I have to bring up some bad behavior by a name Sand Hill Road firm (SH).

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

www.paulgraham.com

APRIL 28, 2010

I think it would help founders to understand funding better—notjust the mechanics of it, but what investors are thinking. And if trouble withinvestors is one of the biggest threats to a startup, managing themis one of the most important skills founders need to learn. Few startups get it quite right. Many are underfunded.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Up and Running

SEPTEMBER 20, 2021

Furthermore, there are various forms of equity, such as preferred stock, common stock, and convertible notes, which influence the present and potential future investors. Founders can apply the information to instantly ascertain what percentage of the startup they have to propose a new investor. Total share ownership.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Scott Edward Walker

JUNE 9, 2011

As many of you know, VC investors are typically issued shares of preferred stock, not common stock. Indeed, preferred stock, as the name suggests, is preferable to (and more valuable than) common stock because it grants certain key rights to the holders, one of which is a conversion right.

Term Sheet 60

Term Sheet Conversion Rights Venture Capital Liquidation Preference 60

Austin Startup

MAY 17, 2017

Giving someone a seat on your Board of Directors is 100x more consequential to the company than naming them an advisor. The majority of companies we see have Founders only on the Board before closing their Series A. Sometimes it’s just the CEO; other times it’s 2 or 3 founders. Big difference. Take it seriously.

Seed Stage 48

Seed Stage Startup Cap Table Angel Investor 48