Author: Ryan Roberts
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6 Traps To Avoid When Raising Capital
Brad Sugars of Action International has published an article titled “6 Biggest Mistakes in Raising Startup Capital.” In the article, Brad lists the following as the 6 biggest mistakes you can make when raising capital for your startup: 1. Half-baked business plans 2. Focusing too much on the idea and too little on the management…
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Getting Subpoenaed Does Not Make You a Target–Just Be Sure to Tell the Truth
As a former Securities and Exchange Commission legal clerk and a current Apple fanatic, the following story is of high interest: Steve Jobs subpoenaed in backdating case September 20 2007: 5:27 PM EDT SAN JOSE, Calif. (AP) — Apple CEO Steve Jobs has been subpoenaed by the Securities and Exchange Commission to give a deposition…
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How to Make Sure Your Startup Company Will Fail
1. Don’t form an LLC or incorporate. Make sure you and your partner have all the personal liability legally possible. 2. Don’t have any difficult conversations with your partner. Leave important global issues with your partner unaddressed so that you can fight over them later when you have less time and more stress. 3. Agree…
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Why Giving Your Employees Phantom Stock Can Boost Your Company
The problem of motivating and retaining key employees without giving away your company’s equity can be solved by the use of a phantom stock plan. Many company owners are hesitant to provide key employees with an actual company ownership interest. Such an ownership interest would likely entitle key employees to notice, inspection, and voting rights.…
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Why Customizing Your Startup Documents to Your Industry is a Mistake
You need to customize your articles of incorporation and corporate bylaws if you are serious about doing things the right way at your startup company. But be careful how you customize these important startup documents. Don’t fall into a common trap where you think you are customizing your startup documents, but in reality, you are…
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Why Your Startup Company Needs to Keep the Number of its Investors Low
If you can’t self-fund your startup company and must take on investors, keep the number of your investors as low as possible. A low number of investors will reduce your startup company’s transaction costs and headaches associated with raising funds. I’d rather my client raise $90k from one investor than $100k collectively from ten based…
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How to Make a Late Election for S-Corporation Status
Filing for S-corporation status with the IRS requires compliance with strict time guidelines. Form 2553 must be filed by the 15th day of the third month after your corporation’s fiscal year. For most corporations, that means you must file by March 15 for the S-Corporation election to be effective for the current fiscal year. If…
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Top 5 Reasons to Incorporate in Delaware
Corporation-friendly law is just one reason your startup should incorporate in Delaware
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How to Know You Have Found a Great Startup Lawyer
A reader emailed me asking: How do I know I have found a great startup lawyer? And judging by this blog’s most frequent search keywords, you may be asking yourself that question, too. Evaluating your startup lawyer (or any lawyer for that matter) can be a difficult task because a lawyer’s work product tends to…
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How to Avoid Being Ripped Off When You Lease Office Space, Part I
A commercial office space lease is a complicated legal document and is usually your startup company’s first big contract. A real estate broker is a great resource to find available office space and determine the market rents. However, your lease’s location and rent provisions account for about only 10% of the language in a commercial…