Startup Company Lawyer

MARCH 12, 2009

C corps, LLCs, and S corps differ significantly in the areas of taxation, ownership, fundraising, governance and structure, and employee compensation. Any company that raises venture financing will need to be a C corp in order to issue preferred stock. Such inflexible features are typically unattractive to venture investors.

LLC 61

LLC Stock Options Preferred Stock Stock 61

www.thedailymuse.com

SEPTEMBER 18, 2012

You don’t want a senior partner preparing documents for an incorporation, nor do you want a third-year lawyer negotiating with a seasoned venture capitalist for you. It’s essential to make sure you take reasonable steps to control risk in your interactions with customers, suppliers, users, employees, and the general public.

Hiring 56

Hiring LLC Intellectual Property Private Equity 56

Scalable Startup

AUGUST 9, 2018

There are so many Facebook/Google/Apple multi-millionaires who receive new stock options every quarter, often a few hundred thousand dollars every quarter, that feel they should put something back into the system, plus they like the idea of being an investor. They’re betting on you.

Technical Cofounder 20

Technical Cofounder Silicon Valley Early Stage Cofounder 20

Both Sides of the Table

NOVEMBER 4, 2009

If you never raise another round of venture capital (a big if) and if your company is sold for the normal venture exit ($50 million on average for 200 or so annually that get sold) then what is your stake? Stock options are the icing on the cake. Don’t join for the options.&#.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

Both Sides of the Table

MAY 23, 2010

Often when startups who have raised venture capital need another round of financing they will turn to their existing investors to give them money before raising from outsiders. VC’s money comes from mostly institutional investors called LPs (limited partners). This bonus is often in the form of either a discount (e.g.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Both Sides of the Table

APRIL 27, 2010

Moving on … My second post was directed at employees. If you’ve done it for a long time then I usually advise hiring managers to hire you as contractors and not full-time employees. No employees wanted to join startups – they were all looking for stable jobs. It’s a subjective topic.

Venture Capital 285

Venture Capital Hiring Software Review Stock Options 285

Gust

NOVEMBER 4, 2011

This discussion expands on my Quora answer to a specific question: “ Why were the stock options of MySpace employees worthless even though the company was sold to News Corporation for hundreds of millions? ” The complete story includes a startup-within-a-startup, investments and exits by two VC firms, and some genuine corporate drama.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

infochachkie.com

SEPTEMBER 24, 2011

Basing a consultant’s compensation on the incremental revenue they generate is a great example of a deal that is on The Fringe (for other creative approaches to partnering, see Agreements on The Fringe). The final straw came when I asked the latest 25-year old a simple ‘yes / no’ question related to stock options.

Equity 40

Equity Silicon Valley Cofounder Technical Review 40

Austin Startup

SEPTEMBER 19, 2017

In other cases, they may come from your channel partners or elsewhere. As founders, your job includes selling product to customers, stock to investors, and opportunity to employees. As for compensation, stock options in the range of 0.1% All of these are challenging sales tasks, and advisors are no different.

Advisory Board 48

Advisory Board Sweat Equity Marketing Vertical 48

VC Adventure

DECEMBER 4, 2009

This conclusion is backed up by the National Venture Capital Association which tracks the impact of private companies who receive institutional venture financing. You can read the recent NVCA report on the impact of venture capital on the overall economy here (the quick take-away is that this impact is extremely significant).

Accredited Investor 49

Accredited Investor Venture Capital Stock Options Government 49

Cracking the Code

OCTOBER 12, 2012

If that company had had to comply with the proposed regulation, its founding partners would have faced the following dilemma: either forfeit 60% of their gains in tax, or … ask Electronic Arts to come back later. It enjoyed explosive growth, created 200 jobs in two years, and was acquired in 2009 by the American giant Electronic Arts.

France 71

France Europe Capital Gains Dilution 71

Both Sides of the Table

DECEMBER 2, 2010

I always encourage people to allocate a few extra stock options to those that join super early when your company is risky and they just believed in you. You can also spend time with a newer startup helping them navigate the world of product management, venture capital or team building. I won’t let you down.

Europe 352

Europe France San Francisco Chicago 352

YoungUpstarts

AUGUST 17, 2011

The “benevolent” part means doing the right thing for the right reasons, for all stakeholders — in education, this means your teachers and other school employees, your students, their parents, etc. Schools can’t give stock options, but they can give praise and non-economic rewards to those who uncover a new idea that works.

Cofounder 222

Cofounder Programming Leadership Ohio 222

A Smart Bear: Startups and Marketing for Geeks

MARCH 11, 2014

How many employees would a medium-sized business have in your definition? Jason: If I’m managing my whole business with this tool, I don’t have 100 employees. you can’t have one employee because meetings are just too easy and you don’t really have them formally. You can’t have 5,000 employees.

Technical Cofounder 220

Technical Cofounder Cofounder Software Review Management 220

Pascal's View

JULY 8, 2009

Stock options – once the great wealth builder for employees in start-up companies – have had much of their value striped by regulatory changes.

America 28

America United States Entrepreneur Stock Options 28

www.paulgraham.com

APRIL 28, 2010

The reason is that employees are investors too—oftheir time—and they want just as much to be able to cash out. Ifyour competitors offer employees stock options that might make themrich, while you make it clear you plan to stay private, yourcompetitors will get the best people. Dont be misled by thisoptimism.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Board Effect

MAY 10, 2019

There’s the owner—maybe a partner or two—but unless employees are offered equity from the get-go, there’s typically not a whole lot of dilution. It’s not unusual for owners to offer equity to early employees and advisors, both as a motivator and a form of compensation before the business turns a profit. Why do cap tables matter?

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

techcrunch.com

OCTOBER 23, 2010

The timing is perfect, there is more than a little overlap with Vivek Wadhwa’s guest post on venture capital earlier today. In Meebo’s case, for example, I was lucky enough to partner up with Elaine and Sandy. No looking for partnerships (who’s going to partner with you anyway?). No phone system. No legal muck.

Technical Review 84

Technical Review Cofounder Technical Cofounder Software Review 84

Austin Startup

SEPTEMBER 9, 2018

And all of our employees receive these as well. the press, current and potential consultants, potential employees (to be clear, all current employees are in the arena with you), current and potential clients, current and potential partners, current and potential investors, etc. The spectators are made up of many people?—?the

Advisory Board 48

Advisory Board Balance Sheet Stock Options Email 48