All Posts: ‘Startup Issues’

What Are the 5 Biggest Mistakes that Startups Make Regarding IP?

by Scott Edward Walker on August 18th, 2010

Introduction

This post was originally part of my “Ask the Attorney” series which I am writing for VentureBeat (one of my favorite websites for entrepreneurs).  Below is a longer, more comprehensive version.

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Helping Entrepreneurs Succeed: Larry Page

by Scott Edward Walker on June 29th, 2010

To Our Clients & Friends:  Welcome to our weekly series entitled “Helping Entrepreneurs Succeed.”  Each week, we post a short video presentation or interview of a successful entrepreneur, investor or business leader on a variety of topics to help entrepreneurs succeed.

Today, as a bonus to yesterday’s presentation by Keith Rabois, we have Larry Page, co-founder of Google and a brilliant entrepreneur, from a 2002 presentation at Stanford (courtesy of Stanford University’s Entrepreneurship Corner).  In this interesting, 4-minute excerpt, Larry discusses, among other things, the importance of (i) having great people involved with your venture; (ii) becoming an “expert” in your space/domain; (iii) having a “healthy disregard for the impossible”; and (iv) not starting a company because the space is “hot.”  I hope you enjoy it.  Thanks, Scott

“Ask the Business Attorney”: What’s Wrong with a Sole Proprietorship?

by Scott Edward Walker on June 23rd, 2010

Introduction

This post was originally part of my “Ask the Attorney” series which I am writing for VentureBeat (one of the most popular websites for entrepreneurs); it is part 2 of 3 of my posts on choice of entity.  Last week (in part 1), I discussed what’s wrong with an LLC.  This week I address what’s wrong with a sole proprietorship; and next week I’ll address what’s wrong with a partnership.  Please shoot me any questions you may have in the comments section.  Many thanks, Scott

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Ask the Business Attorney – What Is an Employee Stock Option?

by Scott Edward Walker on June 2nd, 2010

Introduction

This post was originally part of my weekly “Ask the Attorney” series which I am writing for VentureBeat (one of the most popular websites for entrepreneurs).  Below is a longer, more comprehensive version.  Please shoot me any questions you may have in the comments section.  Many thanks, Scott

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Helping Entrepreneurs Succeed: Jeff Clavier

by Scott Edward Walker on May 20th, 2010

To Our Clients & Friends:  Welcome to our new weekly series entitled “Helping Entrepreneurs Succeed.”  Each week, we will post a short video interview of a successful entrepreneur, investor or business leader on a variety of relevant topics to help entrepreneurs succeed.

Earlier this week, we presented Naval Ravikant.  Today (as a bonus interview for this week), we present Jeff Clavier, the founder and Managing Partner of SoftTech VC, who discusses what he looks for in startups (“it’s people, product, market”) and diligence issues.  I hope you enjoy it.  Thanks, Scott

“Ask the Attorney” – Series FF Stock

by Scott Edward Walker on April 21st, 2010

Introduction

This post is part of my weekly “Ask the Attorney” series which I am writing for VentureBeat (one of the most popular websites for entrepreneurs).  As the VentureBeat Editor notes on the site: “Ask the Attorney is a new VentureBeat feature allowing start-up owners to get answers to their legal questions.”  Below is a longer, more comprehensive version.  Please give me your input in the comments section.  Many thanks, Scott

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Choice of Entity for Entrepreneurs

by Scott Edward Walker on April 14th, 2010

Introduction

I had originally intended to discuss “Series FF” stock in today’s post (as a follow-up to last week’s post regarding “Class F” stock); however, I had several telephone calls in the past few days with respect to the issue of choice of entity for startups and thought it would be helpful to get this post up.

Indeed, one of the most important early decisions an entrepreneur must make in connection with his or her venture is the choice of entity.  There are basically six choices: (1) sole proprietorship, (2) general partnership, (3) limited partnership, (4) C corporation, (5) S corporation or (6) limited liability company.  Below is a discussion of each entity, including a basic description, the advantages and disadvantages, the ideal candidate/business for such entity, the cost to set-up such entity and the most important take-away.

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“Ask the Attorney” – Class F Stock

by Scott Edward Walker on April 7th, 2010

Introduction

This post is part of my weekly “Ask the Attorney” series which I am writing for VentureBeat (one of the most popular websites for entrepreneurs).  Below is a longer, more comprehensive version.  Many thanks, Scott

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“Ask the Attorney” – Splitting Equity

by Scott Edward Walker on March 17th, 2010

Introduction

This post is part of my weekly “Ask the Attorney” series which I am writing for VentureBeat (one of the most popular websites for entrepreneurs).  As the VentureBeat Editor notes on the site: “Ask the Attorney is a new VentureBeat feature allowing start-up owners to get answers to their legal questions.”

I have two goals here: (i) to encourage entrepreneurs to ask law-related questions regardless of how basic they may be; and (ii) to provide helpful responses in plain English (as opposed to legalese).  Please give me your feedback in the comments section.  Many thanks, Scott

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“Ask the Attorney”: Single-Member LLCs

by Scott Edward Walker on February 10th, 2010

Introduction

This post is part of a weekly series entitled “Ask the Attorney,” which I am writing for VentureBeat (one of the most popular websites for entrepreneurs).  As the VentureBeat Editor notes on the site: “Ask the Attorney is a new VentureBeat feature allowing start-up owners to get answers to their legal questions.”

I have two goals here: (i) to encourage entrepreneurs to ask law-related questions regardless of how basic they may be; and (ii) to provide helpful responses in plain english (as opposed to legalese).  Please give me your feedback in the comments section.  Many thanks, Scott

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“Ask the Attorney” – Formation Issues (Part II)

by Scott Edward Walker on February 3rd, 2010

Introduction

This post is part of a new series entitled “Ask the Attorney,” which I am writing for VentureBeat (one of my favorite websites for entrepreneurs).  As the VentureBeat Editor notes on the site: “Ask the Attorney is a new VentureBeat feature allowing start-up owners to get answers to their legal questions.”  This post is a longer, more-comprehensive version of the VentureBeat post.

The goal here is two-fold: (i) to encourage entrepreneurs to ask law-related questions regardless of how basic they may be; and (ii) to provide helpful responses in plain english (as opposed to legalese).  Please give me your feedback in the comments section.  Many thanks, Scott

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“Ask the Attorney” – Formation Issues (Part I)

by Scott Edward Walker on January 27th, 2010

Introduction

This post is part of a new series entitled “Ask the Attorney,” which I am writing for VentureBeat (one of my favorite websites for entrepreneurs).  As the VentureBeat Editor notes on the site: “Ask the Attorney is a new VentureBeat feature allowing start-up owners to get answers to their legal questions.”  This post is a longer, more-comprehensive version of the VentureBeat post.

The goal here is two-fold: (i) to encourage entrepreneurs to ask law-related questions regardless of how basic they may be; and (ii) to provide helpful responses in plain english (as opposed to legalese).  Please give me your feedback in the comments section.  Many thanks, Scott

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“Ask the Attorney” – Founder Vesting

by Scott Edward Walker on January 6th, 2010

Introduction

This post is part of a new series entitled “Ask the Attorney,” which I am writing for VentureBeat (one of my favorite websites for entrepreneurs).  As the VentureBeat Editor notes on the site: “Ask the Attorney is a new VentureBeat feature allowing start-up owners to get answers to their legal questions.”

The goal here is two-fold: (i) to encourage entrepreneurs to ask law-related questions regardless of how basic they may be; and (ii) to provide helpful responses in plain english (as opposed to legalese).

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Issuing Stock Options: Ten Tips For Entrepreneurs

by Scott Edward Walker on November 11th, 2009

Fred Wilson, a New York City-based VC, wrote an interesting post a few days ago entitled “Valuation and Option Pool,” in which he discusses the “contentious” issue of the inclusion of an option pool in the pre-money valuation of a startup.  Based on the comments to such post and a google search of related posts, it occurred to me that there is a lot of misinformation on the Web with respect to stock options – particularly in connection with startups.  Accordingly, the purpose of this post is (i) to clarify certain issues with respect to the issuance of stock options; and (ii) to provide ten tips for entrepreneurs who are contemplating issuing stock options in connection with their venture.  (more…)

Five Common Mistakes Entrepreneurs Make In Raising Capital

by Scott Edward Walker on September 21st, 2009

This post discusses the five most common mistakes entrepreneurs make in raising capital: (i) playing securities lawyer; (ii) selling securities to non-“accredited investors”; (iii) advertising or soliciting investors; (iv) using an unregistered finder to sell securities; and (v) selling preferred stock to angel investors.  The abridged video version is directly below. 

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Launching A Venture: Ten Tips For Entrepreneurs

by Scott Edward Walker on September 15th, 2009

Below are ten tips for entrepreneurs who are launching a startup that will seek venture capital (“VC”) financing.

1.  Protect Yourself from Personal Liability.  The entrepreneur’s first step in connection with launching a startup should be to form an entity that will protect against personal liability.  As discussed below, a Delaware C-corporation is generally the recommended choice; however, in certain rare circumstances, it may be prudent for the entrepreneur to form an S-corporation or a limited liability company to obtain “pass-through” tax treatment (and then convert the entity to a C-corporation down the road, if necessary).  The bottom line is that the entrepreneur should seek the advice of corporate and tax counsel in connection with the formation of any business organization (e.g., shareholders in S-corporations — as opposed to C-corporations — are not eligible for the “qualified small business stock” capital gains tax break; and losses in C-corporations may be deductible up to $50,000/yr. or $100,000/yr. on a joint return with respect to “Section 1244 stock”). (more…)

Founder Vesting: Five Tips For Entrepreneurs

by Scott Edward Walker on September 10th, 2009

There have been several relatively recent blog posts with respect to the issue of founder vesting, including (i) two posts by Chris Dixon, a smart angel investor and co-founder of Hunch, here and here; and (ii) a post by Mark Suster, a successful entrepreneur turned VC (and another smart guy), here.  There are also a number of solid older posts addressing this issue, including (i) Venture Hack’s post here and (ii) Brad Feld’s post here.  The purpose of this post is three-fold: (i) to weigh-in from the legal side; (ii) to try to pull the foregoing posts together in an organized manner; and (iii) thereby to provide five practical tips to entrepreneurs in connection with founder vesting.   (more…)