In this article we dig deeper into liquidation preference in startup deals - how can it impact the shareholders and founders during a liquidity event.
We cover all the important steps founders should take before incorporating their startup: choosing business entity, state of incorporation, name, board of directors, splitting equity between founders & more.
Vesting schedules play an important part in keeping a startup together. They’re a designed as a motivator not only for employees, but also for founders. If you have them, it sends a signal to investors, that you’re in it for the long haul.
Learn about preferred stock and why you don't set aside preferred shares for investors when starting a company.
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.
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.
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.
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.