Should a Founder License IP to a Startup?

Often a startup founder will desire to license his or her intellectual property to a new startup venture, rather than transfer ownership to the startup at incorporation via a technology assignment agreement. This is a bad idea. Founder IP License Problem Even if the founder offers the startup a completely

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Lockdown Lost-Founder IP

If you won the lottery today, how many long lost relatives (that you don’t recall) would come out of the shadows of your family tree to test the generosity of their favorite relative? I’m willing to bet a few. Now if your startup received a $5MM Series A investment from

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25102(f) Notice: Only in California

Founders must pay special attention when their startup issues securities–even when those securities are issued to themselves at incorporation. Whether or not founders realize it, they are issued their founders stock via an exemption from registration at both the federal and state level. The federal exemption most likely available for

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The Delaware Freak-Out

The New Year. For some, it’s time to reflect on the past and look forward to the future. For others, it’s time to make resolutions to change for the better. But for me, it’s time to respond to client inquiries regarding their apparent 5-figure bill for Delaware franchise taxes due March

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Accountants Heart LLCs

I’ve never had a client’s accountant recommend any legal form besides the LLC for a new startup. Even though I heart corporations, I still believe the LLC can be an appropriate legal entity for some companies and ventures. But when it comes to a startup looking to (i) raise capital,

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How to Split the Startup Founder Equity Pie

Founders frequently ask me to provide guidance on how their startup should split equity between co-founders. My answer is always: (1) It Depends, and (2) Quickly. (1) IT DEPENDS If you’ve ever hired a lawyer, you will (unfortunately) hear the phrase “it depends” several times. In this situation, the “it

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Is Your Startup’s Name Available in Delaware?

Delaware has a pretty sweet Name Availability Search Tool via their Division of Corporations. If your desired entity name isn’t available to reserve, then that name isn’t available for a new corporate entity filing in Delaware. If your startup name is available, you can reserve the name online for $75.

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Don’t Create an “Issuance Pool”

“We want to have 30% of the startup company at exit.” -Anonymous Startup Founders Occasionally, founders will plan out their startup’s lifespan to the point of pre-determining their final equity figure after all hires and investments have been made. Usually, a set of founders want to end up with a

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Startup Docs from TheFunded.com

TheFunded.com has just released a “Complete Set of Founder Friendly Legal Docs” via its website. (Hat tip to @bradleyjoyce at the Fort Worth Startup Blog) The sample startup documents, located at docstoc.com, include: – Bylaws – Certificate of Incorporation – Initial Stockholder Consent – Invention Assignment Agreement – Restricted Stock

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