“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
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
I watch “Shark Tank” on ABC. I hope one day they get pre-money and post-money right. A segment on Sunday’s episode did manage to highlight a key point for startups: TRANSFER THE INTELLECTUAL PROPERTY TO YOUR STARTUP COMPANY In the episode, Coverplay Inc., was looking to raise about 350k from
A registered agent is someone, either a company or an individual, that a corporation appoints to receive service of process and other official notices such as state franchise tax notices. Service of process is how a third party gives your company notice of a pending legal matter, which allows your
If founders stock is issued subject to a vesting period, each founder should make a Section 83(b) election with the IRS within 30 days of purchasing the restricted stock. If a founder fails to make a 83(b) election, each vesting milestone will be a taxable event for the founder. “Income”
I got a tip from @Pietari that another set of startup documents were released today. The Funded Founder Institute just released a very founder-favorable set of startup documents centered around “Class F Common Stock.” The Class F Common offers founders various protective provisions such as: -2 to 1 Board votes
Thinking of saving some cash and using LegalZoom to incorporate your startup? Think again. While incorporating with LegalZoom is a viable option for some new businesses, LegalZoom comes up way short for startups. LegalZoom just doesn’t offer the documents a typical startup needs: Shareholders Agreement? Nope. Stock Purchase Agreements? No.
I’ve blogged before about the benefits of incorporating in Delaware. Thus, I was somewhat shocked to see the Deal Journal blog about how Delaware is becoming another victim of the credit crunch. I never thought about how much revenue Delaware receives from its Division of Corporations, but the article contained
“My startup will start out as an LLC and then change to a corporation when/if…” This quote, or similar derivation, is a common fact pattern I hear from new clients or general inquiries. I think most entrepreneurs are attracted to the LLC because they hear it is “simple” or “easily-managed”
Par value is the minimum price that a corporation can issue its shares. In the US, par value was created during the time of the great depression in order to ensure a shares could not be sold under a certain price. Today, that concept is somewhat archaic, but it still
