Author: Ryan Roberts
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Venture Capital: here today, gone tomorrow?
The tech staff at FORTUNE recently published a blog article about the long-term prospects of the venture capital industry. Indeed, the venture capital industry is currently facing pressures (potential higher taxes on gains, competition from angel investors because of startup’s reduced capital needs, etc.). But these headwinds are temporary obstacles rather than the beginning of…
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Why Every Entrepreneur Should Listen to 2Pac
Tupac Amaru Shakur is an uncomfortable case study for founders not because his life ended badly, but because his career looks like a high‑velocity organization operating inside adversarial systems: rapid brand expansion, constant scrutiny, hostile counterparties, and almost no slack. He built one of the most powerful personal brands of the 1990s while navigating legal…
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How Well Do You Know Your Business Partner?
“Not to trust another human until he’s checked out by every kind of background check you can check.” That’s the lesson one entrepreneur unfortunately learned after a business partner mismanaged their ventures’ funds. His partner’s mismanagement had catastrophic consequences for their companies and employees. Does this mean you should hire a private investigator? Well, that’s…
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What 300 Can Teach You About Business Law
Entreprenuer.com recently published an article entitled “A Spartan’s Guide to Business” in reference to the blockbuster “300.” The article highlights 3 business lessons that are to be learned from the movie: Your CEO needs to be a strong leader. Train your employees and foster a culture that promotes loyalty. You need to have a strong…
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What is a Leveraged Buyout?
A leveraged buyout (“LBO”) is a strategy where someone acquires an existing company using a significant amount of borrowed funds. Typically, the assets of the company being purchased are used as collateral for the borrowed funds. This allows someone to acquire a company without having to outlay a lot of personal or business capital. Then,…
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Negotiate the Basket
In the world of mergers and acquisitions, a “basket” is the amount of damages that must be suffered by the acquiring entity before it can recover from the seller under the indemnity provisions of the acquisition agreement. Three main issues arise in drafting the basket clause: (1) Size–Typical basket amounts are in the 1 to…
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Drug Testing Your Employees
According to the United States Department of Labor, reasons employers implement drug testing are to: Deter employees from abusing drugs and alcohol; Prevent hiring individuals who use illegal drugs; Provide early identification and referral of employees who have drug and/or alcohol problems; Provide a safe workplace for other employees; Ensure general public safety and instill…
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Using a No Shop Clause in a Letter of Intent
If you are buying a business, the process becomes expensive and tedious once the letter of intent is signed. For this reason, I recommend all buyers include a “No Shop” provision in their LOI. This provision prevents the seller from going behind your back and finding other suitors while you are busy with due diligence…
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Why Bylaws are Important for Your New Company
If you’re forming a corporation, you should treat your bylaws as required infrastructure, not ceremonial paperwork. The short version: bylaws are the rulebook that makes your board and stockholder actions valid, keeps governance disputes from turning into existential ones, and gives investors and acquirers confidence that your company can actually make decisions the way it…
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Start a Legal Fund Instead of Purchasing Pre-Paid Legal
If you’ve started a business recently you’ve probably heard about Pre-Paid Legal. Basically, you are provided “access” to an attorney for a monthly fee. Think of it as legal insurance. This may be beneficial to some small-business owners, but I offer a suggestion: Rather than pay Pre-Paid Legal $35 or so monthly, pay yourself $35…