Author: Ryan Roberts
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Shouldn’t the Standardization of Venture Capital Documents Lead to Reduced Legal Fees?
As an industry, venture capital is relatively young. Yet it has been around long enough–through busts and booms–that it will not simply go away as some might have you think. Venture capital is a legitimate industry which is now being enhanced through standards and patterns. Documentation is one area that is trending towards consistency in…
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Keep the Bridge Burning to a Minimum
A few months ago, I was on a conference call with opposing counsel to negotiate a client’s deal. Things got a little heated (the only time I’ve ever experienced a hostile communication with another attorney) and eventually I got hung up on. I was about to call the attorney back and show him what I…
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What is a Pre-money and Post-money Valuation?
When a startup raises capital, valuation is main economic term that must be tackled. The two main ways valuation is expressed in venture capital financings are what’s known as the “pre-money valuation” and the “post-money valuation”. The startup’s valuation immediately before the venture capital investment is called “pre-money valuation” while the startup’s valuation immediately after the venture capital financing is closed…
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You Can’t Polish a Sneaker
Why your startup may have the right employee incentive plan but the wrong employee
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A Primer on LLCs
The limited liability company (LLC) is a relatively new legal entity which got its start in the late 1980s. As the name implies, an LLC provides limited liability to its participants called “members” while containing the assets and operations of the business enterprise. Please keep in mind that LLCs are regulated at the state level,…
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Why Startups are a Corporation for Venture Capital
Why Your Startup Company Will Need to be a C Corporation to Raise Venture Capital
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What is a Private Placement?
While no true definition of a private placement exists, it is commonly used to refer to the raising of capital (i.e., “securities”) without making a registration with the United States Securities and Exchange Commission (SEC). Under the Securities Act of 1933, any offer to sell securities must either be registered with the SEC or meet…
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How to Incorporate Your Sole Proprietorship
Many entrepreneurs begin their startup as a sole proprietorship. Eventually, some sole proprietors desire to incorporate so they can reduce their personal liability and protect their personal assets. But the act of incorporating a going business does not, by itself, transfer the current business being conducted as a sole proprietorship to the new corporation. The…
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What is Preferred Stock?
A definition of preferred stock and how it benefits startups and investors
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How to Issue Weak Preferred Stock to Friends & Family
How to issue preferred stock to friends and family without limiting future venture capital rounds.