Seeing Both Sides

AUGUST 28, 2017

But once entrepreneurs have their initial team and product in place, a few smart advisors around the table and the social proof required to attract great talent, why would they raise additional dilutive equity capital if they can raise non-dilutive capital through the sale of tokens? Shift of value from equity holders to token holders.

Early Stage 20

Early Stage Equity Venture Capital Government 20

Startup Professionals Musings

FEBRUARY 1, 2016

An LLC will work just fine for this, but if you know enough to anticipate more than 100 investors or special classes of stock, I recommend incorporating as a Delaware or Nevada C-Corp or S-Corp. Co-founder and equity negotiations work best if you own all the equity. Founder’s stock may be taxed at time of incorporation.

Intellectual Property 120

Intellectual Property LLC Limited Liability Company Nevada 120

Feld Thoughts

AUGUST 26, 2011

When we were last with our SayAhh cofounders, they had implemented an accounting system and Jane had contributed $50,000 for a 55/45% equity split. Since SayAhh is a C corporation that is incorporated in Delaware, they decided to have a very low non-zero par value for their shares, set at $0.00001, to prevent higher franchise stock taxes.

Balance Sheet 128

Balance Sheet Cofounder Cap Table Delaware 128

Gust

OCTOBER 11, 2012

That is, if all you have is a good idea, the reality is that you are highly unlikely to be able to get funding from anyone at all, even if you are a Delaware C corporation with gilt edge stock certificates.

Delaware 122

Delaware Stock Options Cofounder Stock 122

Scott Edward Walker

NOVEMBER 2, 2011

Incorporate in Delaware and qualify the company to do business in the state in which its principal office is located (see #2 here ). Split the equity based on prior contributions and expectations going forward, not necessarily equally (see post here ). Button-down IP ownership and assignment issues (see post here ).

Accredited Investor 111

Accredited Investor Stock Options Delaware Silicon Valley 111

Gust

DECEMBER 8, 2011

Readers can anticipate my next point in continuing the analogy: It makes no more sense for a non-lawyer to prepare fundamental legal, governance, equity and intellectual property documents than it would for a patient to self-diagnose and begin taking prescription-strength antibiotics or other medications. Newco, Inc.”)

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

The Startup Lawyer

MARCH 17, 2010

2) State of Incorporation: Delaware. (3) 7) Founders Equity Split: Depends on the Team, But Quickly and After the Awkward & Difficult Conversations. (8) Here’s what I’d do in the beginning: Incorporation. (1) 1) Entity Choice: Corporation or Corporation. (2) 3) Authorized Shares in Charter: 10,000,000 Shares. (4)

Accredited Investor 112

Accredited Investor Delaware NDA Vesting 112

The Startup Lawyer

MARCH 17, 2010

2) State of Incorporation: Delaware. (3) 7) Founders Equity Split: Depends on the Team, But Quickly and After the Awkward & Difficult Conversations. (8) Here’s what I’d do in the beginning: Incorporation. (1) 1) Entity Choice: Corporation or Corporation. (2) 3) Authorized Shares in Charter: 10,000,000 Shares. (4)

Accredited Investor 112

Accredited Investor Delaware NDA Vesting 112

Scott Edward Walker

OCTOBER 27, 2015

Incorporate in Delaware and qualify the company to do business in the state in which its principal office is located (see #2 here ). Split the equity based on prior contributions and expectations going forward, not necessarily equally (see post here ). Button-down IP ownership and assignment issues (see post here ).

Intellectual Property 40

Intellectual Property Accredited Investor Vesting Delaware 40

Feld Thoughts

AUGUST 12, 2011

When we were last with Dick and Jane on Finance Fridays, our fearless entrepreneurs were figuring out how to split up their founders equity and account for an investment from Jane. as a C-Corp in Delaware. Tie each round of funding to a set of key milestones in the development of your product/business.

Balance Sheet 136

Balance Sheet Forecast Cap Table Early Stage 136

Up and Running

MAY 23, 2016

For GreenPal, Gene Caballero says, “We knew that if we ever wanted to be looked at seriously by venture capitalists, we would need to be a C-Corp in Delaware.”. In fact, GreenPal wasn’t the only one that figured it was best to go for a Delaware-based C-Corp. presence via a Delaware-based C-Corp also gives non-U.S.

Software Review 74

Software Review Software Delaware Forecast 74

Bryce Dot VC

FEBRUARY 12, 2015

Terms We’ve worked with the team at Cooley to create an investment instrument that has elements of both debt and equity. Debt in that we will not be purchasing equity initially, but, unlike debt, there is no maturity date, no collateralization of assets and no recourse if it’s never paid back. You get to fill that in.

San Francisco 40

San Francisco Distribution Equity Delaware 40

ithacaVC

AUGUST 29, 2011

Let’s assume you want to raise some $$ from outside investors and/or that you think you might want to grant equity interests to employees in the future. Likely it will be a corporation set up in Delaware (typically referred to a DE corp). Any corporation requires shareholders and directors.

Delaware 49

Delaware Equity LLC Founder 49

Scott Edward Walker

FEBRUARY 1, 2014

you want to form a Delaware corporation. Walker Corporate Law – boutique corporate law firm based in SF. doing this for 18+ years. different perspective as a lawyer (lots of phone calls from founders with problems). purpose of workshop: to discuss some of the significant problems/mistakes I’ve seen in the last six months.

Software Review 111

Software Review Delaware Accredited Investor Due Diligence 111

Scott Edward Walker

FEBRUARY 1, 2014

Introduction SEW/corporate lawyer Walker Corporate Law – boutique corporate law firm based in SF doing this for 18+ years different perspective as a lawyer (lots of phone calls from founders with problems) purpose of workshop: to discuss some of the significant problems/mistakes I’ve seen Mistake #1: Forming the Wrong Entity you want to form a Delaware (..)

Software Review 111

Software Review Delaware Accredited Investor Due Diligence 111

The Startup Lawyer

MARCH 11, 2010

First, most if not all the model seed docs assume your startup is a Delaware corporation. Thus, you are going to have to either edit the docs or reincorporate your startup in Delaware to use them properly. Second, the model seed docs tend to impress upon the entrepreneur that preferred equity is the best angel investment structure.

Delaware 49

Delaware Hockey Stick Preferred Stock Open Source 49

Up and Running

JULY 29, 2015

Equity Crowdfunding. Equity crowdfunding takes the crowdfunding process to the next level. These sites function a lot like the sites listed above, but investors get equity in your startup. See Also Are You Ready for Equity Based Crowdfunding? Here’s the fee structure. See Also Why My Crowdfunding Campaign Failed.

Angel Investor 60

Angel Investor Equity Small Business Delaware 60

The Startup Lawyer

MARCH 11, 2010

First, most if not all the model seed docs assume your startup is a Delaware corporation. Thus, you are going to have to either edit the docs or reincorporate your startup in Delaware to use them properly. Second, the model seed docs tend to impress upon the entrepreneur that preferred equity is the best angel investment structure.

Delaware 45

Delaware Hockey Stick Preferred Stock Open Source 45

Scott Edward Walker

APRIL 9, 2012

Part 3 will cover certain special issues, such as (i) what happens if the startup is acquired prior to the note’s conversion to equity? (ii) ii) what happens if the maturity date is reached prior to the note’s conversion to equity? A convertible note is short-term debt that converts into equity. What is a Convertible Note?

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

www.copelandfirm.com

OCTOBER 21, 2010

Startup Law 24 February 2010 There are a few common ways that founders split up equity and ownership of the company: 1.) Equally: each founder get the same amount of equity. Unequally: each founder gets a different amount of equity/shares depending upon various factors such as: i. Who helped refine the idea?

Intellectual Property 40

Intellectual Property Founder Vesting Bridge Financing 40

Pascal's View

NOVEMBER 14, 2009

Fortunately, responsible legislators who do show leadership, such as Senator Ted Kaufman (D) Delaware , are willing to call out the systemic risks of high frequency trading in publications ranging from the Financial Times to the Delaware News Journal. capital markets for listed equities have been in systemic decline since 1997.

Delaware 37

Delaware IPO Venture Capital Private Equity 37

Pascal's View

MARCH 8, 2010

The Act provides for a specific list of information that LPs are entitled to, and funds historically disclose that same information to their LPs—the top law firms in Silicon Valley model their LP agreement forms to be pretty consistent with Delaware law. entitled to receive from a VC fund? Share and Enjoy:

Limited Partner 28

Limited Partner Government Delaware LP 28

Startup Professionals Musings

FEBRUARY 8, 2017

We incorporate the venture as a Delaware C corporation, serve as its Registered Agent, file for its tax number with the IRS, register with its home state, set up its bank account, credit card, accounting software, cap table.everything!

New York City 120

New York City New York Delaware Silicon Valley 120

Pascal's View

SEPTEMBER 22, 2011

Scarcely 12 months since Apotheker joined HP, the value of the company’s equity has declined by approximately 50%. Duty of Good Faith: A separate duty of good faith has emerged in some jurisdictions such as Delaware where a director has engaged in such egregious behavior as to not have acted in good faith.

Delaware 52

Delaware New York Government Search 52

Pascal's View

OCTOBER 22, 2009

As a nation, our credit and equity markets should be a crown jewel. While we must redress those problems, we must also urgently examine opaque and complex financial practices in other markets, including equities, before new problems arise. Kaufman is a Democratic senator for the state of Delaware. Share and Enjoy:

Equity 28

Equity Securities and Exchange Commission Delaware Technical Review 28

Small Business Force

MARCH 4, 2014

You don't need a Delaware corporation if you're a solopreneur and you don't need three or four different kinds of stock if you never expect to have more than a couple of shareholders. Nowhere is the KISS model more necessary than how you set up your company, both legally and financially.

Delaware 37

Delaware Early Stage Partner Revenue 37