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The 5 Biggest Legal Mistakes That Startups Make

Scott Edward Walker

Mistake #5 : not doing your due diligence on potential investors (at 38:36). you want to form a Delaware corporation. Moonlighting problem – if you work on your startup while currently employed by another company, your employer may have rights to your intellectual property/invention. 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?

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The Legal Side of Entrepreneurship

YoungUpstarts

” The Cost of Financing. Startups bear the costs of their financing, from the first seed investment to the sale of Series A stock. These costs make it preferable to use a convertible security for a raise of this size and to structure as equity financing if you are raising closer to $2 million. Convertible Securities.