Category: Boards and Advisors
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Board Observers: Non‑Voting Doesn’t Mean Harmless
If an investor asks for a board observer, treat it like a real governance concession. Board observers may not get a formal vote, but they usually get the two things that matter more in practice: information and presence. That’s often enough to influence board discussion, direction, and sometimes outcomes that aren’t great for your startup. This…
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Startup Advisor Agreement: A Primer on the Basics
TL;DR: If you are giving a member of your advisory board equity, you should also sign an Advisor Agreement (sometimes called an Advisor Letter) between the advisor and your startup. It protects your company, clarifies expectations, and closes the two biggest gaps: confidentiality and intellectual property. Why an Advisor Agreement matters when you grant advisor…
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Advisor Stock Option Grants
One asset that startups should consider taking advantage of is advisors. Luckily for startups, advisors are prevalent and can be readily found through incubators, networking and/or personal contacts. The best advisors are in it to pay it forward or give back to the startup community. If you want to take a very informal advisor relationship…
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Of Mice and Mentors
There are a ton of positives that mentors provide startups, as no one person innately has the skill set and/or experience to run a successful company. But if there is an incubator bubble, does that beget a mentor bubble? Mentors at incubators should be in it strictly to pay it forward and most certainly are.…
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Dealing with a Startup Creeper
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…
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Startup-Advisor Dating
I get about 4 emails a week from law students and attorneys with questions about launching a law practice. It’s an awkward and humbling experience for me. I’m not a law practice management expert and several years ago I had many of these same questions. But I try to answer as many emails and calls…
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How to Protect Directors on Your Startup’s Board
Startups often desire to shield members of their board of directors from personal liability in connection with their duties on the board. And sometimes potential board members are hesitant to join a startup’s board without sufficient personal liability protection. Therefore, startups can protect their directors in a few ways: (1) Indemnification The startup can include…
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Should your Startup Lawyer also be a Director?
Startup founders sometimes ask their startup lawyer to serve on the board of directors. The founders may feel that their lawyer is a prime candidate for a board seat since their lawyer (a) is familiar with their startup, and (2) has dealt with a myriad of startup company issues through the lawyer’s representation of such…
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Your Advisor’s Invention Agreements: A Potential Startup Killer
“Get advisors” is a common recommendation given to a startup company entrepreneur. However, entrepreneurs should use caution when selecting advisors for his or her startup company. Your advisors may come pre-packaged with restrictive covenants that have the potential to kill your startup. One such restrictive covenant that could darken any startup’s day is an invention…