Trending Sources

How to Divide Founder Equity: 4 Criteria to Discuss

View from Seed

Below, Lee Hower offers advice for approaching these equity discussions objectively and properly. Capital Investment & Sweat Equity.

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Punch & Pie: How Should Co-Founders Divide Equity?

Agile VC

Sometimes co-founders put off the equity split question for some time. Both of these are typically reflected in the founder equity split.

Protecting IP in Crowdfunded Deals

Angel Investing News

Investors will eventually want to validate the intellectual property (IP) prior to investing but not just to hear about the opportunity.  During this phase of the investment process, representatives of the investor group may agree to a non-disclosure agreement as part of their validation of the IP.

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Legal Checklist for Startups

Scott Edward Walker

Button-down IP ownership and assignment issues (see post here ). 5.  None of this is rocket science. 

How Do Angel Investors Make Decisions?

Early Growth Financial Services

They’ll want to know what’s unique about your IP and … Continue reading → Investment Capital: Equity / Debt / VC Funding

Crowdfunding: Ways to Boost Your Campaign Success

Early Growth Financial Services

Before you go public with your campaign, you need to identify and protect your IP. Some things, like putting simple copyrights in place, are straightforward enough … Continue reading → Investment Capital: Equity / Debt / VC Funding

IP 9

IPO? IP-no!

EIN News

billion through IPOs. "A lot of private equity funds and venture capitalists have been holding their investments for a have gone on sale yet. By mid-June, U.S. firms had raised $22.7

If I Launched a Startup

The Startup Lawyer

Hell Yes. (9) Vesting Schedule for Founders Shares: 4 years with a One Year Cliff. (10) Consideration for Founders Shares: Cash & IP. (11) Handling of “Lost Founders&# : Lock Down the IP (then Wish Them Well).

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Lockdown Lost-Founder IP

The Startup Lawyer

Thus, it’s wise to lock down your startup’s IP early to prevent the lost founder problem. How to Lock Down the IP. Consideration for services rendered should be given to all developers and consultants that work on anything IP-related at your startup. Lost Founders. Consideration can also be cash. Conclusion.

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


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. The risk is simply too great. 

When Should A Company Be Formed Around an Idea?

Ask The VC

We’d suggest that you form a company (LLC or S-Corp is fine at this point), divide up the equity and make sure it is subject to vesting. That way, if someone does decide to leave, they will not leave with all of their equity. Or should we continue working on the product and see what happens?

IP 75

Are Universities The New VCs?

A VC : Venture Capital and Technology

It isn't the IP and patents that are held by Universities that interest me. think capital gains from equity investments in startups that are birthed inside universities is an interesting idea and I am glad to see Stanford and some other schools trying it out.  The New Yorker has a piece on Stanford's StartX.

IP 60

Should a Founder License IP to a Startup?

The Startup Lawyer

Founder IP License Problem. Even if the founder offers the startup a completely startup-favorable license, the founder IP license scenario should be a non-starter for most startups. The problem is that even a free and exclusive license to the startup falls short of vesting IP ownership with the startup. This is a bad idea.

Do It Right The First Time: Avoiding “Janitorial” Legal Work


There are countless related subjects, such as what type of entity to form and in what jurisdiction, how to handle equity compensation and vesting arrangements, determining titles and Board membership, and so on.  I’ve written extensively on these subjects, as have other lawyers, notably Yokum Taku and Scott Edward Walker.  Good stuff!

IP 9

4 Deadly Legal Mistakes That Startups Make

Scott Edward Walker

IP Ownership.  Any IP created or acquired by a founder (e.g., You need to make sure that any IP created by outside developers (i.e.,

IP 4

Corporate Bad Activity Against Innovators

Feld Thoughts

Virtual Legality: Legal Letters Claim Oculus VR Made The Oculus Rift Using ZeniMax IP. That’s how they create the fast lane and the slow lane.

The 5 Biggest Legal Mistakes That Startups Make

Scott Edward Walker

Mistake #2 :  not buttoning-down IP ownership issues (at 10:20). Mistake #2:  Not Buttoning-Down IP Ownership Issues. Cheers, Scott.

The risks of being a small investor in a private company

Chris Dixon

Small investors invest in entity 1 that licenses IP from entity 2. Value of IP increases and entity 2 is sold and eventually cancels entity 1′s license, making entity 1 worthless. 4) Pay-to-play or artificially low downrounds. Here are a few examples. 1) Issuing of senior securities with multiple liquidation preferences.

Some Career Advice for Aspiring Tech CEOs

Both Sides of the Table

He wants a chance at changing life’s circumstances with building equity value that might free him and his family from the rat-race of 529 accounts, property taxes, summer-school tuitions and even spending some cash on aging parents. There is often money to be made in finding places with under-valued IP. But how? She joined Yahoo!

Top Legal Mistakes Entrepreneurs Make


Finally, completely understand who owns what as the relationship persists, especially in the case of intellectual property (IP).

Dear elizy: How should I split equity with my co-founders?  And how will that affect raising a seed round?


Ada is my professor, and we are using her lab, and the company is based on her research, though the IP is assigned to the company. But, Ada wants to split the equity 50% her, 20% Bob and 20% me with a 10% option pool. Dear elizy : I started a company in school with two co-founders. Let’s call them Ada and Bob. Good luck!

Key Contracts Every Business Must Use


by Tej Prakash, co-founder of It’s these relationships that, more often than not, make a business successful. Employees. Freelancers.

Working with Friends

Non-Linear Growth

Last week I wrote about the value of repeat relationships in the venture capital and private equity business. Well… today, Intel Capital announced a significant investment in Meritage portfolio company IP Commerce. Crisp is better for it. I’m excited that Intel has decided to join us at IP Commerce. On and up!

IP 10

Tahosa’s Summit: 6 Months [Series]

Non-Linear Growth

To my knowledge, no-one has ever done a blog series on the process of building a venture capital or growth equity firm. Hire an IP attorney to help you through the process and some good marketing people if you can afford them. I enjoy reading blog posts of entrepreneurs that chronicle the journey of starting and building a business.

When do I need to incorporate a company?

Startup Company Lawyer

More than one founder.  If there is more than one founder, the likelihood of an argument about how the equity should be split in the new company increases dramatically.  Incorporating a company and issuing stock to the founders will help prevent misunderstandings among the founders about equity splits.  Issuing stock options.  Funding. 

IP 15

Top 120 Startup Posts for 2010


Both Sides of the Table , July 22, 2010 An updated Digital Trends presentation - Jeff Hilimire , June 2, 2010 I do what I hate - Jessica Mah , January 7, 2010 Startup Equity Allocation - , January 11, 2010 When good investment decisions end up backing more women CEOs: Conversation with Cameron Lester at Azure Capital.

CTO 80

The 5 Biggest Legal Mistakes That Startups Make

Scott Edward Walker

Cheers, Scott [link] Below is my personal outline for the workshop. issues to address include: How have they treated their other portfolio companies?

Venture Debt 101

Up and Running

This sometimes even includes your IP assets, though this is negotiable and should be part of your decision on the lender you choose to work with.

What Should You Do with Your Crappy Little Services Business?

Both Sides of the Table

You own the IP you create. In a down market IP can become a huge differentiator. 3. This post originally appeared on TechCrunch. Period.

What is it Like to Negotiate a VC Round?

Both Sides of the Table

Of course investors care about controls (board, protective provisions, IP assignments, non-solicitation) but these are all pretty standard. Over the years I’ve written extensively about the downsides of convertible notes for startups such as here , here and here. In the old days VCs funded off of a “pre-money” valuation.

Zayo Group – One of Boulder’s Amazing Startup Stories

Feld Thoughts

By the time we sold to Level 3, our total proceeds to equity owners and management were $225M. Instead, we sought to provide raw fiber, wavelengths, ethernet, IP, and technical space to those entities that needed a whole lot of bandwidth. We raised $2.7B of debt and $870M in equity in three rounds. ”, he continued.

Startups Need the ‘Why’ Before the ‘What’ to Build

Startup Professionals Musings

Intellectual property (IP). They emphasize that before the “What” should come the “Why?” Position yourself relative to your competitors.

Bad Notes on Venture Capital

Both Sides of the Table

“But lawyers will charge much more for equity.” Try doing THAT with equity. This week. On the phone … Me: So, you raised venture capital? Him: Yeah. We raised a seed round. About $1 million. Me: At what price? Him: It wasn’t priced. We raised a convertible note. Me: With a cap? Him: Yes, $8 million. Him: Huh?

Bad Notes on VC


But lawyers will charge much more for equity.” Try doing THAT with equity. This week. On the phone …. Me: So, you raised venture capital? Him: Yeah. We raised a seed round. About $1 million. Me: At what price? Him: It wasn’t priced. We raised a convertible note. Me: With a cap? Him: Yes, $8 million. Me: Ah. I see. Him: Huh? Last week.

How to Find the Top VCs for the Investment You Need

Up and Running

They invest in strong teams, massive market opportunities, and novel IP. Pacific Northwest. billion invested in 374 startups in that area.

How to Work with Lawyers at a Startup

Both Sides of the Table

Shame about not getting it in legal writing that you owned the original IP.  the link is here. Many people start companies arse backwards. 

Startup Resources

IP Location Tools. YCombinator Series AA Equity Financing Documents. Founder Equity Issues. Venture Hacks equity section.

Why Content Personalization Is Not Web Personalization (and What to Do About It)


Imagine you receive an email from your bank about refinancing and home equity loans. Tweet It!]. Does it actually impact conversion rates?

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Startup Founder Agreements

High Contrast

It outlines key points of agreement between founders around IP ownership, equity ownership, vesting, etc. For example, without a clear vehicle (a company) to contribute intellectual property into, a founder who walks away may mean that the future company won’t own its own IP. Some get common equity for their investment.

Burnham's Beat: Fortune Magazine Fight Fest: Private Equity vs. VC

Burnham's Beat

Fortune Magazine Fight Fest: Private Equity vs. VC. Mortiz took great pains to distance Venture Capital from private equity while Roux tried to argue that the two basically did the same thing, albeit for different stage companies. Fortune Magazine Fight Fest: Private Equity vs. VC. Burnhams Beat. About Bill. Archived Posts.