Cooley Protect – Patent Resource Center

Create and Protect

Cooley Protect is a free resource designed by Cooley’s patent counseling & prosecution team.

Introducing Cooley GO in Asia

Cooley GO in Asia offers the same free founder-focused legal resources and document generators that the US and UK ecosystems have come to trust.

What is a ‘Drag-Along’?

This article defines what a 'Drag-Along' is

Five Common Mistakes US Companies Make When Issuing Stock Options to US Service Providers

This article outlines the five common pitfalls when issuing stock options to service providers in the US

What is the Difference between 409A Valuations and Venture Capital Valuations?

Start

This article provides a brief discussion on what 409A valuations are, why they are important, and if it impacts future valuations in venture capital financings

Wholly Owned Subsidiary Incorporation Package Generator

Document Generator

Download core documents for the initial incorporation of a wholly owned subsidiary as a Delaware C-corporation, including a certificate of incorporation, bylaws, and more.

ISOs v. NSOs: What’s the Difference?

Build a Team

Stock options are one of the most common forms of equity compensation that a company can use to incentivize its workforce. When a company issues options to US employees, there are two types it can choose from: incentive stock options (ISOs) and non-qualified stock options (NSOs).

Preferred Stock

Glossary Term

Preferred Stock (like Common Stock) is a security that represents ownership in a corporation. In addition to the ownership interest, Preferred Stock has rights that Common Stock does not.

What You Should Know About Warrants

Raise

If you’re negotiating for equity financing, bridge financing, bank financing, venture debt, or a commercial transaction for your startup, you may be asked to issue a warrant as part of the deal. This article explains what a warrant is, and outlines some of the key terms to understand.

What You Need to Know About Down Round Financings

Raise

A “down round” is a financing in which a company sells shares of its capital stock at a price per share that is less than the price per share it sold shares for in an earlier financing. Down rounds are frequently viewed much more harshly than flat or up rounds.

Early Exercisable Stock Options: What You Need to Know

Start

If you are considering allowing an optionholder to “early exercise” stock options, make sure you understand the basics.

Super Voting Stock: What is it and how can I get it?

Start

Very often founders raise the concern about protecting against dilution.  Specifically, they are concerned that, as they grow their business and issue stock to investors, employees, and advisors, their shares, and therefore their voting power, will be diluted.

Series FF Stock

Glossary Term

Series FF Stock is a hybrid between Common Stock and Preferred Stock, and sometimes issued to founders at the time of incorporation…

Liquidation Preference

Glossary Term

A liquidation preference is a right that one class of stockholders may have to be paid ahead of other class(es) of stockholders in the case of a liquidation of the company.

Common Stock

Glossary Term

Units of equity ownership in a corporation entitling their holder to a share of the corporation’s success through dividends and/or capital appreciation.

Broad-Based Weighted-Average Anti-Dilution Protection

Glossary Term

Provisions in a company’s certificate of incorporation that increase the number of shares of common stock into which preferred stock when the company sells stock at a lower price.

Secondary Sales of Private Company Stock

Sell

There are several considerations that a private company should take into account when deciding whether to engage in, and how to structure, secondary sales of its stock (also referred to as a liquidity round).

Process Counts – Board Considerations When Contemplating a Sale

Sell

In addition to your basic fiduciary duties as a board member, here are some additional considerations to think about when bringing your company to market, picking a buyer and negotiating the terms of sale.

Negotiating the Option Pool

Raise

The size of the option pool is one of the most important factors affecting your ownership percentage.

Choosing the Correct Business Entity: The Basics

Start

This article briefly introduces each of the principal business forms, namely corporations, partnerships, LLCs and sole proprietorships.

Understanding The Valuation Cap

Raise

While in days of yore it was basically the case that convertible notes had no discernible link to any particular valuation, those days have passed.

Protecting Your Founder Equity

Start

Confusion about your ownership structure, or a poorly planned structure, can create unnecessary administrative hassle and legal expense, and in certain situations can ward off investors. Here are some matters to consider as you establish the ownership structure (capitalization) of your company.

Option Grants: Fully Diluted or Issued and Outstanding

Start

When talking to people about option grants, refer to “fully diluted” and always promise a share amount not just a percentage.

S Corporations: The Basics

Start

Learn the basics about how an "S Corporation" differs from the more common "C Corporation" before you decide to make the IRS election for S corp status.

Establishing the Ownership Culture: Stock vs Options

Start

We often get asked about the difference between the two most common forms of equity grants - stock and options. This article is intended to highlight some of the important differences between them.

Comparison of C Corp, S Corp and LLC Entity Types

Start

Discover the key similarities and differences between C corporation, S corporation and limited liability company (LLC) business entities.

Primer on Convertible Debt

Raise

Many early stage companies use convertible debt for their initial fundraising. This article identifies and explains the basic terms of convertible debt.

There is No Such Thing as “Founder Stock” (legally speaking)

Start

Founder Stock may not be what you think it is.

8 Suggestions for Entrepreneurs Preparing to Raise Venture Capital

Raise

Is your story compelling enough to interest venture capital investors? Do you have demonstrable results? Customer traction? Patented intellectual property? Find out what you should be thinking about before you start to look for venture capital.

Negotiating Term Sheets: Focus on What’s Important

Raise

When you receive a term sheet from a VC for a full preferred stock financing, the abundance and variety of terms might seem overwhelming. It can be difficult to understand what terms are really important when you don’t have experience living with those terms.