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How to Work with Lawyers at a Startup

Both Sides of the Table

Shame about not getting it in legal writing that you owned the original IP. For a very small fee they can get your Delaware C corp registration, make sure that you have IP protection and ensure you didn’t make an early bumbling mistakes that you’ll pay for dearly in the next 7-10 years of hard work.

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Critical Patent Strategies Startups Can Use From Large Companies

Up and Running

A serious patent claim against a startup’s key product can be severe enough to create an emergency warranting dedicated in-house counsel immediately. However, by adopting the best practices of large and well-established enterprises a start-up protects its most precious asset—IP.

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Revisiting Paul Graham’s “High Resolution” Financing

Both Sides of the Table

People raised rounds with “a discount to the next round&# or “warrant coverage.&# Yes, these give cheaper prices to early angels but potentially not much of a discount if the company becomes hot. The reason I have generally been against convertible debt is that historically it was a mechanism that avoided price.

Finance 286
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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

So money spent should add equity value or create IP that eventually will. If you were able to raise at a $50 million post-money valuation and have $2 million in the bank and the markets turn you better be sure that your valuation warrants raising at at least $50 million even in a tough market or I’d be more cautious about a higher burn.

Burn Rate 383
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What Makes an Entrepreneur? Cojones (7/11)

Both Sides of the Table

If your idea is so amazing that it warrants my hard-earned angel money or the money of my LP investors from our fund then why should I take a risk on you if you won’t take a risk on yourself? But to me if you’re not willing to quit and take a risk on yourself, then you’re not confident enough in your own idea and skills. Why should I be?

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The Importance of Due Diligence in M&A Transactions

Scott Edward Walker

.” Obviously, this is a relatively small transaction; however, it is still imperative that, at a minimum, you conduct financial due diligence (to validate the numbers [Target] has provided to you) and IP diligence to confirm the ownership and functionality of the software. 5) We can discuss the draft and the foregoing on Monday.

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Bad Notes on Venture Capital

Both Sides of the Table

If you want to give them a 50% discount offer them $1 of common-stock warrants (no liquidation preference) for every $1 of stock they buy. If you want to give them a 33% discount you offer them half of a $1 common-stock warrant for every $1 share they purchase. “But how do I offer cheaper prices to early investors?”