article thumbnail

Corporation or LLC? Business Organizations for Tech Startups.

YoungUpstarts

Stocks are issued at the time the company is formed, and more can be issued over time. You can control the power of your company’s stock by issuing different classes. The LLC can have any ownership structure, but by issuing different classes of stock, corporations have almost as much flexibility, just with more paperwork).

LLC 100
article thumbnail

Startup Funding – A Comprehensive Guide for Entrepreneurs

ReadWriteStart

Reasons for funding. ? Scale up your operations. One of the most prominent reasons for funding is to scale up your operations, for expansion and achieve economies of scale. Now you may want to scale up your operations or expand your presence. The third reason is to fund your short term operational expenses or working capital.

Startup 150
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

How to Scale a Venture Capital (or Private Equity) Fund

David Teten

I’ve listed them below in *very* roughly descending order of efficiency, measured by increased dollars one can put to work, divided by the operational dollars required to implement each strategy. . Sophisticated VC and private equity funds have a wide array of options for leveraging outside operating executives. – Go public.

article thumbnail

5 Keys To Mitigating New Venture Tax And Legal Issues

Startup Professionals Musings

You may start as an LLC but find that a potentially high-value investor insists on having preferred stock, which is only available with a C-Corp. Also, mergers, acquisitions, and alliances with other companies almost always drive the need to modify your organizational entity for legal or operational purposes.

LLC 210
article thumbnail

Why Uber is The Revenge of the Founders

Steve Blank

Replacing the founder when the company needed to scale was almost standard operating procedure. However, there was no way for founders to share this information with other founders (this was life before the Internet, incubators and accelerators). Founders can now outvote the preferred stock holders (the investors).

Founder 263
article thumbnail

Investors Beware: Today’s $100M+ Late-stage Private Rounds Are Very Different from an IPO

abovethecrowd.com

The very act of dumping hundreds of millions of dollars into an immature private company can also have perverse effects on a company’s operating discipline. The only way to use the proceeds of such a large round is to take on massive operating losses. These liquidation preferences give the investor a debt-like downside protection.

IPO 40
article thumbnail

Startup Resources

www.vccafe.com

Likelihood of Confusion -trademark, copyright and Internet Law. In addition, TheFunded.com allows entrepreneurs to view and share term sheets, to assist one other finding good investor, and to discuss the many facets of operating a business. Internet trends. Internet TV. Preferred Stock Purchase Agreement.