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Dear Founders: Here Are Three IP Mistakes to Watch-Out For

Scott Edward Walker

Over the past six months, my firm has been engaged by a number of startups with significant intellectual property (“IP”) problems. In a couple of cases, the founders played lawyer on their own; in the other cases, the founders either used (i) a Web service that did not address IP issues or (ii) an inexperienced law firm.

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4 Deadly Legal Mistakes That Startups Make

Scott Edward Walker

Vesting Restrictions. The first deadly mistake relates to vesting restrictions. In addition, sometimes a portion of the shares will be deemed to be vested “up front” – meaning that they are not subject to vesting — particularly where a founder has made a significant contribution prior to the company’s incorporation.

Vesting 89
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7 Lessons They Don’t Teach You In Crowdfunding School

Startup Professionals Musings

Keep all IP details close to the vest. Crowdfunding platforms don’t have the facilities to handle non-disclosure agreements that you might expect from every professional investor. With a large number of unknown investors demanding details, you are highly exposed to potential competitors.

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Opinion: It’s a startup world

NZ Entrepreneur

This equity will vest over 2-3 years. In deep tech companies value creation milestones are more likely to be tagged to validating the technology and IP creation. Remuneration will reflect the stage of the startup but it’s generally at a rate of about $500-1000 a meeting or directors might be paid in equity at about 0.5-0.75%

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

Gust

Nevertheless, choosing to defer basic corporate housekeeping items can be disastrous in some circumstances, as when the failure to spend a few thousand dollars on legal fees to clarify IP ownership and equity arrangements comes back to bite a successful company to the tune of millions of dollars on the eve of a liquidity event. Good stuff!

IP 114
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How to Divide Founder Equity: 4 Criteria to Discuss

View from Seed

Co-founder equity should have vesting periods (or lapsing repurchase rights) so if a co-founder departs substantially earlier than others, their stake in the business is accordingly smaller. Ideation/IP. Sometimes, however, there’s an existing code base that one co-founder brings.

Equity 315
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Punch & Pie: How Should Co-Founders Divide Equity?

Agile VC

Co-founder equity should have vesting periods (or lapsing repurchase rights) so if a co-founder departs substantially earlier than others, their stake in the business is accordingly smaller. Sometimes, however, there’s an existing code base that one co-founder brings.

Cofounder 255