Startup Lawyer

Tag: startup

  • If I Launched a Startup

    If I Launched a Startup

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    Ryan Roberts
    in

    Here’s what I’d do in the beginning if i launched a startup: Startup Incorporation (1) Entity Choice: Corporation or Corporation(2) State of Incorporation: Delaware(3) Authorized Shares in Charter: 10,000,000 Shares(4) Type of Shares: Common Stock(5) Par Value of Common: $0.0001(6) Initial Founders Issuance: 8,000,000 Shares(7) Founders Equity Split: Depends on the Team, But Quickly and…

  • Model Seed Funding Doc Myths

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    Ryan Roberts
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    A variety of model startup seed funding docs have been released in the past year or so: TechStars Series AA Preferred, YCombinator Series AA Preferred, and TheFunded Founder Institute’s Plain Preferred. And as I mentioned last week, Fenwick & West and Andreessen Horowitz released the Series Seed model documents. The standardized seed funding document movement…

  • It Is Not Your Baby Anymore

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    Ryan Roberts
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    Many entrepreneurs treat their startup like their baby. And rightfully so. The entrepreneur has likely shed blood, sweat, tears, and some cash on the startup, therefore the entrepreneur wants to keep the startup in its grasp and control at all times. But once you issue equity in exchange for services or investment, your startup isn’t…

  • Should a Founder License IP to a Startup?

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    Ryan Roberts
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    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 startup-favorable license, the founder IP…

  • What Happens to the Option Pool if a Startup is Acquired?

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    Ryan Roberts
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    The option pool is the amount of common stock a startup reserves (typically at each series of financing) for future issuances to employees, directors, advisors, and consultants. For example, if a startup has 5,000,000 shares of common stock outstanding immediately before the Series A round, a condition of the Series A round may will be…

  • How to Split the Startup Founder Equity Pie

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    Ryan Roberts
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    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 depends” hinges on the respective…

  • How to Handle Startup Idea Theft

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    Ryan Roberts
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    Have you ever been jacked? The only time I recall being a victim of theft was during undergrad at USC. Someone broke into my car while it was parked in the garage of my downtown L.A. apartment complex and the bandit(s) made off with my CD collection. While I was relatively unscathed by the theft…

  • 5 Common Founder Mistakes

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    Ryan Roberts
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    This is a re-post of an article that I wrote about common founder mistakes for StartupLucky.com and Killerstartups.com (not sure if it went out yet). 1. Spending Too Much Time Keeping Your “Unique” Idea Top Secret. Some founders attempt to have everyone within 25 feet of them sign an NDA. Instead of spending time drafting…

  • You Can’t Spell Corporation Without “IP”

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    Ryan Roberts
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    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 the show’s angel investors. A…

  • Skip the LLC

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    Ryan Roberts
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    “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” or “flexible.” Sure, LLCs are…