Outsourcing your startup’s early technical development to a dev shop is like riding an elephant in a horseback polo match. You’re on a big beast, but your lack of agility will prevent you from scoring. With the surge in demand for technical co-founders, many startups have no choice but to contract with dev shops to [...]
Here’s a list of the top 5 deal terms that cause harm to startups at the seed financing stage and therefore should be avoided: 5. Control “Control” of a startup can manifest itself in various forms such as equal (or investor-favorable) representation on the board of directors or a requirement of obtaining seed investor approval [...]
While the stereotypical tech startup entrepreneur is 23 years old, single and has no children, the reality is that many tech startup entrepreneurs are married and/or have children. Don’t avoid “big boy” expenses just because you are bootstrapping. That is, make sure you have (or at least look into obtaining) insurance against life’s big risks [...]
I hate non-dilution rights and if you are an entrepreneur you should, too. I’m not talking about price-based anti-dilution protection that is typical in an angel or VC round. What I’m referring to is a right given to a particular stockholder so that such stockholder’s equity in the company is not diluted by any future [...]
Great news — your startup just got accepted to an incubator! But before your startup signs up and cashes that $[XX,000] check, your startup’s co-founders should sit down and evaluate the incubator’s offer. The following are some issues to consider and actions to take before accepting an incubator’s offer: (1) Calculate Valuation and Determine Value. [...]
You’re in a startup and everything is scarce including capital. Thus, when you encounter a legal issue (like incorporation) you conduct a cost-benefit analysis of hiring a startup lawyer. I understand the need to ensure you are getting value for the small amount of capital you start with — I did the same thing when [...]
Axl Rose began working on November Rain in 1983 — a full 8 years before it was released by Guns N’ Roses. Axl came up with a piano-only version of the song early, but by the time 1991 rolled around November Rain was a full-blown hair metal power ballad. Axl realized that what might have [...]
Whenever a startup considers paying a “finder” for successful investor introductions, I have the same type of conversation with the founders that goes something like this: – Startup: “Finder” knows a lot of investors and he’ll introduce us if we pay him [6]% of all capital raised through the introductions. Me: Is “finder” a registered [...]
With the success of Y Combinator and TechStars, several incubators (sometimes referred to as “accelerators”) have popped up everywhere. Some have done quite well. Here in Dallas,Tech Wildcatters had a strong class and is opening up applications for the Spring 2011 class later this month. But this morning I read a Dallas Business Journal article [...]
Advisors are great for startups. They can provide your startup with guidance on a wide range of topics and typically take a seat on your startup’s advisory board. But sometimes a person who gives your startup infrequent, casual advice will broadcast to the world that he or she is an advisor to your startup in [...]
Ryan Roberts is a startup lawyer and represents technology companies through all phases of the startup process, including incorporation, seed & venture financings, and exit transactions. Click here to learn more about his practice.
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