The SAFE has become more popular as a way of financing early stage startups since its creation in 2013. But convertibles notes are still used by investors around the world. We break down key differences between SAFEs and convertible notes.
By James Hottensen • 6 min read
We cover some of the important steps founders will need to take after incorporating their startup, like 83(b) elections, getting an EIN, opening a bank account & more.
Most founders have little clue about how cap tables work when they start their first startup. Keeping accurate records of your cap table is essential for startup founders if they plan on raising capital from VCs or selling the company.
By Greg Miaskiewicz • 8 min read
Minutes are an official log of decisions taken by a startup’s board of directors at board meetings. Failure to keep accurate minutes of board meetings may cause a company and board members to face legal problems in the future.
By Nancy Thanki • 3 min read
409A valuations are independent appraisals of a startup's common stock. Startups should use an independent, outside valuation firm to get a 409A valuation before offering stock options to employees to avoid fines and legal issues with the IRS.
By Greg Miaskiewicz • 9 min read
Co-founder exits can be a messy ordeal for startups, but they don't have to be fatal. Learn how to avoid messy co-founder exits and protect your startup.
Most people don't pay much attention to the signature block when a contract is signed. Signature blocks and conventions around signature in legal contracts serve an essential function in determining the validity of a contract such as an investor agreement or stock option award.
By Nancy Thanki • 2 min read
Startups typically issue common shares to founders, employees, advisors and consultants; they issue preferred shares to investors as part of venture financing rounds The preferred class of stock in a startup is typically subdivided into series, each representing a different round of financing, like Series A, Series B, and so on.
By James Hottensen • 3 min read
Avoid these common legal mistakes made by startups and save your company from dealing with fines and lawsuits. As a startup founder, keeping your company compliant is essential to protecting the value of your startup equity and reaping the rewards of your hard work.
Issuing equity to employees in an LLC can be complex and require tax advice. Many startups prefer to incorporate as C Corporations because the process for issuing equity to employees is much simpler.
Registering in the US opens the door to venture funding for overseas startups. Learn about the process for registering your company in the US as a foreign citizen, including incorporation, taxes, visas and more.
By Greg Miaskiewicz • 9 min read
Startup investors strongly prefer to invest in C Corporations over LLCs for tax and diligence reasons. The proceeds from selling stock in startups registered as C Corporations can be tax exempt due to Qualified Small Business Stock exemption.
An employer identification number or EIN is essential to doing business and you will need to get an EIN for your startup before opening a bank account, paying taxes or hiring employees.
By Nancy Thanki • 7 min read
Is your company doing business in New York? Get an easy-to-follow explanation about what forms you’ll need, information about registration fees, filing deadlines, naming requirements, and more.
Learn why most startups choose to incorporate in Delaware as Delaware corporations. Investors and founders prefer to incorporate in Delaware for many reasons. Learn about how to do a Delaware name search to check with the Delaware secretary of state to see if your company's name is already registered in Delaware.
Learn why you should file your 83 (b) election when purchasing your founders shares in your startup. Topics covered include tax implications, filing deadlines, and the process to complete the 83(b) election filing with the IRS.
Is your startup thinking of doing business in California? If so, you must file a Statement of Information 90 days after registering your company.
By Stefan Nagey • 3 min read
Delaware Annual Franchise tax explained for startup founders . Luckily, you won’t have to take a deep dive into accounting to use the alternate method, the Assumed Par Value Capital Method, used by most Delaware corporations.
By Stefan Nagey • 6 min read
A detailed overview of the different types of equity compensations for employees at startups, including restricted shares awards, stock options and RSUs. Each type of equity award has different tax implications for employee shareholders at startups.
No-code development explained. Using no-code tools, you can go from idea to a fully-fledged product in less time than it would take you to find a technical co-founder... and for a fraction of the cost of outsourcing your development work.
By Capbase Staff • 7 min read
Twitter is an amazing platform for fundraising outreach when used effectively. Read this article and learn how to connect with investors on Twitter
Should you grant your startup employees their stock options as ISO or NSO? Why do most early stage companies grant their employees equity options in the form of ISO instead of NSO? The answer: ISO have special tax advantages.
Just getting your startup incorporated? Find out how to price your company's common shares and learn how the fair market value (FMV) of common shares changes as your company grows.
Running a remote team? Hiring full-time employees in multiple US states? Chances are your startup will need to register your Delaware corporation to do business as a foreign corporation.
Startups that allow the early exercise of stock options help minimize their employees’ tax liabilities and increase the return on common stockholder equity.
Trigger accelerations are often a hotly debated topic (especially in companies acquired by VCs) as any outstanding equity will impact the value of shares of the purchase price.
What is the right capital source for your startup? Learn about the different types of startup capital, such as venture capital, venture debt and non-dilutive funding.
A step-by-step guide to file for a foreign agent qualification to register your company to do business in California.
Learn how vesting schedules work for founders and employees at startups. Many startup founders have a 4 year vesting schedule with a 1 year cliff.
Learn how to write effective emails to pitch investors. James Hottenson, formerly at Great Oaks VC, shares helpful best practices about reaching out to investors.
Before you seek VC funding for your startup, you should know what venture capital firms are looking for when deciding to invest in a startup.
Picking the right insurance for your startup is crucial to protecting your company from risks and liabilities. Learn about the different types of business insurance, including worker's comp, director & officers insurance, cybersecurity and more.
We are offering Capbase for free to all African American and Latinx founders. Our mission as a company is to democratize entrepreneurship and this is something we believe strongly in.
By Greg Miaskiewicz • 3 min read