With special thanks to Jacob Hanna and Blake Martell for their contributions. Issuing option grants to incentivize employees, consultants and advisers is a near universal practice for start-up companies in…
A service provider is an individual or entity that provides services to another party. The relationship is typically governed by a service agreement.
An option pool is a number of shares of stock reserved for issuance to service providers of a company pursuant to options and other equity incentives.
Growing companies will often use acquihires to bring in a team of new employees. This can be more efficient and effective than hiring one by one, especially if the team…
Maybe you’ve been granting options and restricted stock from your equity incentive plan for a while now. Perhaps you and your team have developed a good process – you renew…
In a volatile market, companies may see their stock value drop significantly. This can result in employees and other service providers holding stock options that are “underwater” or “out of…
As a result of changes in US law, most newly formed companies, as well as many existing companies, will need to comply with the beneficial ownership information (BOI) reporting rule
Para leer este artículo en español, haga clic aquí When founders and entrepreneurs in Latin America start to prepare their Latam-based company to receive an investment from U.S.-based venture capital…
Many founders come to us with questions about Section 83(b) elections. They have often heard in startup circles that they need to file these, but may not understand when it makes sense to do so or what problem the Section 83(b) election solves. This article seeks to clear up some of the confusion about Section 83(b) elections.
When a company issues options to US employees, there are two types it can choose from: incentive stock options (ISOs), which qualify for special tax treatment under the United States Internal Revenue Code, and non-qualified stock options (NSOs), which do not.
UK review by Ryan Naftulin If you’re negotiating for an equity financing, bridge financing, bank financing, venture debt, or a commercial transaction for your startup, you may be asked to…
1. Experienced advisers Choose experienced advisers, including lawyers, auditors and financial consultants (if necessary), and get them involved early. Advisers who are up to date on the latest investor and…
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,…
Nonsolicitation is an agreement in which an employee or other party agrees to refrain from encouraging another party’s employees or customers to change their relationship with the other party in a way that would disadvantage the other party.
OK, so you have made the decision to explore a sale of your company. What can you do to make the deal go smoothly and put your best foot forward?…
Why does ownership of a patent/patent application matter? A patent is a government-granted property right that can be used to exclude others from making, using, selling, offering to sell or…
Historically, private company stockholders would be expected to wait until the company went public or was acquired to receive any return on their investment. Over the last several years, however,…
Not Just a Question for Founders One question I get asked all the time by a team founding a startup is how to allocate stock among the two or three…
Finding the right investors is really important. It’s kind of like marriage. A great spouse makes for a great life, while a bad spouse could cause a lifetime of misery…
This article briefly introduces each of the principal business forms in the United States, namely corporations, partnerships, LLCs and sole proprietorships. More detailed considerations and strategies in making an appropriate…
A company’s cap table is one of its most important records. It shows the ownership of the company’s stock, options and other securities, and it is key to understanding the owners’ economic…
An S Corporation is the same as any other corporation except for the manner in which it is taxed. S Corporations generally do not pay United States federal corporate income…
Most startups offer equity participation in their company to people providing services to the company, whether as employees, consultants, advisors or otherwise (which we will call “service providers” in this…
I often have a discussion that goes like this: New employee: “I want Founder Stock” Me: “I see, so you want to buy Common Stock” New employee: “No, I want…
PLEASE READ THESE TERMS OF USE CAREFULLY BEFORE USING THIS SITE Last Updated: 9/20/24 These Terms of Use, along with all other agreements, disclaimers, and disclosures displayed on the Cooley…
In conjunction with our Q4 Venture Financing Report, I sat down with Frank Rotman of QED Investors to get his take on the state of venture capital investing. Key insights from Frank…
In conjunction with our Q4 Venture Financing Report, I sat down with Sean Barrett of HMI Capital to get his take on the state of venture capital investing. Key insights…
If you discover someone making impermissible use of your trade mark in a domain name, you may want to take action to regain control of your trade mark. The form of…
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