Startup Company Lawyer

AUGUST 31, 2012

” As a result, Ted introduced the Series Seed preferred stock documents as an alternative to convertible debt for early stage investments. At the maturity date, there is a risk that investors may demand repayment. The problem. Why convertible equity is better than convertible debt. Convertible debt may need to be repaid.

Convertible Security 73

Convertible Security Equity Security Preferred Stock 73

Startup Professionals Musings

JANUARY 29, 2018

Of course, initially these founder’s shares were worth essentially nothing, but it doesn’t take much of an imagination to grasp the possibilities. Now is the time to talk to a qualified attorney, and get some discipline in place for the following strategies: Manage founder’s shares like gold with partners.

Stock 129

Stock Vesting Preferred Stock Cofounder 129

Both Sides of the Table

JULY 29, 2010

I talked also about 409a valuations and why common stock purchases cost less than preferred stock purchases. But most importantly I lectured founders that you can’t avoid the admin of setting up your ESOP. But if you do this early (pre VC) then the price points are pretty low. Do it early.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

K9 Ventures

NOVEMBER 21, 2011

Let’s say you’re the founder (I use a solo-founder in my example to keep things simple, but this could just as well apply to a founding team) of a startup called Blood, Sweat and Tears, Inc. The objective is really to be able to get some risk off the table for the founders and not leave all their eggs in one basket.

Founder 87

Founder Common Stock Preferred Stock Stock 87

K9 Ventures

NOVEMBER 21, 2011

Let’s say you’re the founder (I use a solo-founder in my example to keep things simple, but this could just as well apply to a founding team) of a startup called Blood, Sweat and Tears, Inc. The objective is really to be able to get some risk off the table for the founders and not leave all their eggs in one basket.

Founder 84

Founder Common Stock Preferred Stock Stock 84

Startup Professionals Musings

MAY 18, 2015

Every entrepreneur needs to understand the following basics, to be addressed at company formation, as they engage a qualified attorney to draw up the paperwork: Allocate founder’s stock commensurate with commitment. Key founder vesting should have no cliff. Retain the right to reclaim stock from anyone leaving the startup.

Stock 120

Stock Vesting Common Stock Founder Vesting 120

Startup Company Lawyer

MARCH 14, 2010

Founders Institute Plain Preferred Term Sheet (by WSGR – disclaimer, I represent the Founders Institute and was involved in drafting this document). To differentiate it from typical “Series A&# preferred stock, which comes with certain expectations with regard to rights. Why is it called Series Seed?

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Gust

OCTOBER 21, 2011

In descending order of preference from the founders’ point of view: 1. a) payable upon demand as of the closing of such transaction; or. (b) a mix of cash and stock) received by other equity holders in the transaction. What happens to the outstanding convertible notes?

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Both Sides of the Table

SEPTEMBER 5, 2012

Can you imagine investing in the stock market where your price was determined at a future date and the better that company performed the HIGHER the price you paid for that investment. In fact, most early investor work hard to help their startups get to the next level so it makes no sense for the angel investor and founders to be at odds.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Scott Edward Walker

JULY 27, 2011

Indeed, whether a minority common stockholder is a founder, an advisor or even a friends/family investor, such stockholder will usually not be contractually granted any of the rights that are typically granted to preferred stockholders. The board can either accept or reject the demand. 2) Right to Bring a Derivative Claim.

Delaware 49

Delaware Liquidation Preference Redemption Los Angeles 49

Tim Keane

JANUARY 12, 2010

Term-sheets for preferred stock offerings are designed to protect the investor in case things don’t go as well as planned. These include: ·       Vesting of Founder Stock. These include: ·       Vesting of Founder Stock.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

abovethecrowd.com

MAY 20, 2013

There are common stock, common options, and as many as three to five different layers of preferred stock, each with a specific liquidation preference. 3) Investor/Founder Mindset Challenges. An investor may say “we own 22% of the company”, or a founder may note, “I still own 31% of my company.”

Merger 53

Merger Institutional Investors Liquidation Preference Preferred Stock 53

The Startup Lawyer

MARCH 11, 2010

A variety of model startup seed funding docs have been released in the past year or so: TechStars Series AA Preferred , YCombinator Series AA Preferred , and TheFunded Founder Institute’s Plain Preferred. There will always be demand for good counsel.

Delaware 49

Delaware Hockey Stick Preferred Stock Open Source 49

The Startup Lawyer

MARCH 11, 2010

A variety of model startup seed funding docs have been released in the past year or so: TechStars Series AA Preferred , YCombinator Series AA Preferred , and TheFunded Founder Institute’s Plain Preferred. There will always be demand for good counsel.

Delaware 45

Delaware Hockey Stick Preferred Stock Open Source 45

www.paulgraham.com

APRIL 28, 2010

I think it would help founders to understand funding better—notjust the mechanics of it, but what investors are thinking. And if trouble withinvestors is one of the biggest threats to a startup, managing themis one of the most important skills founders need to learn. Few startups get it quite right. Many are underfunded.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

www.vccafe.com

MARCH 11, 2013

.” Hackernews list of “Tools of the Trade” for startups - includes over 150 SaaS tools used by startups, and over 150 comments with interesting insights from founders. on demand billing and fraud management. Founders Institute Plain Preferred Term Sheet â?? Founder Equity Issues. Co-founder.

Software Review 53

Software Review Technical Review Startup 53