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). Below is a longer, more comprehensive version — with ten mistakes, instead of six.
Posts Tagged ‘vesting’
Ask the Business Attorney – What Is an Employee Stock Option?
Wednesday, June 2nd, 2010Introduction
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
“Ask the Attorney” – Splitting Equity
Wednesday, March 17th, 2010Introduction
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
“Ask the Attorney” – Formation Issues (Part I)
Wednesday, January 27th, 2010Introduction
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
“Ask the Attorney” – Founder Vesting
Wednesday, January 6th, 2010Introduction
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).
Techcrunch Gets It Wrong Re Tweetphoto CEO (Plus, Lessons For Entrepreneurs)
Thursday, November 19th, 2009Introduction
Yesterday evening, Michael Arrington of TechCrunch posted an interesting piece entitled “TweetPhoto CEO Says Too Much In Interview, Gets Fired. And That’s Just The Beginning…” (which has been subsequently re-posted throughout the blogosphere). Unfortunately, Arrington has gotten his facts all wrong — at least according to Dan Caulfield, the CEO in question.
Arrington sets forth in his post that Caulfield “apparently said too much in [his podcast] interview [with Frank Peters], disclosing confidential information about partnerships [and] was fired by the company for the transgression.” In the comments section to the post, however, Caulfield denied that there was any connection between his firing and the interview. First, yesterday evening, he noted that: “I conducted this interview on [the] Morning of Nov 9th. It had nothing to do with me leaving the company”; and then, this morning, he added that: “I was terminated a week prior to anyone hearing the interview. Events not connected.” Caulfield also retweeted the TechCrunch link to the post yesterday evening with a “Totally false!” insertion. (more…)
Issuing Stock Options: Ten Tips For Entrepreneurs
Wednesday, November 11th, 2009Fred 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 start-up company. 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 start-ups. 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…)
Launching A Venture: Ten Tips For Entrepreneurs
Tuesday, September 15th, 2009Below are ten tips for entrepreneurs who are launching a start-up that will seek venture capital (“VC”) financing.
1. Protect Yourself from Personal Liability. The entrepreneur’s first step in connection with launching a start-up should be to form an organization that will protect against personal liability. As discussed below, a Delaware C-corporation is the structure that VC investors will generally require; however, if a financing is not imminent, 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) to take advantage of the company’s initial losses, if applicable. The bottom line is that the entrepreneur should seek the advice of counsel in connection with the formation of any business organization, including the advice of tax counsel (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
Thursday, September 10th, 2009There 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…)