Category: Incorporation

If you’re forming a Delaware corporation (or really any U.S. corporation), the incorporator is the person who signs and files the certificate of incorporation. That’s basically the job. The biggest misconception is that the incorporator is some kind of “initial owner” or shadow director. In almost every normal startup formation, the incorporator is a temporary role that…

Par value is one of those startup law concepts that feels like it should matter a lot—until you see how it actually shows up in real venture deals. Here’s the short answer: par value is a legal minimum price for stock, not a valuation, and for most early‑stage startups, it’s a formality you set low and move on…

Multiple classes of common stock often surface when founders start thinking seriously about control. This article explains how Class A and Class B structures work, how investors view them, and when they actually affect outcomes.

Delaware has a free online system for checking legal entity name availability. You can use it to see whether another business is already formed or registered in Delaware with the same name (or a confusingly similar name). The tool is available here: Delaware name reservation and availability search. How the Delaware name reservation system works…

If you plan to raise venture capital or sell your tech startup one day, it is extremely likely that you should form as a Delaware C corporation. In the last few years I have seen a disturbing trend of people calling themselves “startup lawyers” and steering high growth startups toward LLCs. In most venture-style cases,…

One of the most common questions I get when helping founders set up a new startup is: “Do my unvested shares have any voting rights?” Put differently, do you only get to vote based on the number of vested shares you have at a given time? Because founders often subject most (or all) of their…

A Right of First Refusal (ROFR) provision gives a startup the right to step into the shoes of a third-party buyer when a current stockholder wants to sell their shares. In other words, before the shares can be sold to an outside purchaser, the company has the option to buy the shares itself on the…

A startup founder’s desire to hold equity better than plain vanilla common stock is not new. Several years ago, Series FF stock for founders was a popular approach for founder liquidity in subsequent financing rounds. We implemented Series FF for a handful of clients back then, but we have not done so recently. In the…

Due primarily to financial constraints, many founders keep a separate job (a “day job”) during the early stages of a startup. This is common whether or not the startup is incorporated, and it is often how co-founders self-fund or reduce risk prior to a seed round. What many founders overlook is that a document from…