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Survive the Term Sheet Negotiation and Investor Due Diligence Part 1

Gust

The principal roles of the lead investor was to negotiate the terms of an investment with the founder of the startup. When a corporation is established, its ownership is divided into pieces called shares of common stock. That’s what you as a founder will have, which is why it’s also known as founders’ stock. Here’s why.

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Corporation or LLC? Business Organizations for Tech Startups.

YoungUpstarts

One of the first actions you will take with your startup is to organize your company a separate legal entity to protect yourself from personal liability for the company’s debts. In the tech startup context, you’ll typically choose between a Corporation and a Limited Liability Company (“LLC”).

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4 Deadly Legal Mistakes That Startups Make

Scott Edward Walker

Indeed, you must make sure that all of the shares of common stock issued by the corporation to the founders are subject to vesting restrictions – which means that ownership of the shares would vest over time (instead of all of the shares being owned outright on day one). code, logo, domain name, etc.) Vesting Restrictions.

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Building a new startup hub

Startup Lessons Learned

Lessons Learned by Eric Ries Wednesday, August 26, 2009 Building a new startup hub Last week, I had a unique opportunity to spend some time in Boulder at the behest of TechStars. It was a great experience to see a relatively new startup hub in action - and thriving. Their model looks like a key ingredient in the startup brew there.

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How do startups decide who sits on the board?

Gust

So before a startup receives outside funding, the board is “elected” by—and usually consists of—the founders (although it may exist in name only.). Invested Interests board of directors business entrepreneur founders startup' original post can be found on Quora @ [link] *.

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Venture Capital Q&A Session

Both Sides of the Table

Mike Stern (wasn’t sure which one so leave a comment if it’s you): Q: “is it possible to sell your startup without venture investment if the company has big traction and a large user base?&# The downside is that people need to buy their stock. This question runs from about minute 2 – minute 8. Do it early.

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Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

I told them that True Ventures had stuck to their brand name and submitted a totally clean term sheet. This means that participation truly only applies in downside scenarios and once your exit outcome is above a certain price investors would still be better off converting to common stock and not taking their preference.

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