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The Startup Lawyer

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Last Entry: May 10, 2013 at 10:55:43

Tech Wildcatters Pitch Day 2013

Posted on May 10, 2013
Tech Wildcatters has just announced a new location for their 2013 Pitch Day. Pitch Day 2013 will be held on Thursday, May 23 from noon to 3pm (Dallas Texas Time) at the Granada Theater. Prior Pitch Days were held at the Magnolia, but due to demand, Pitch Day 2013 will be held at a larger [...

Tech Wildcatters Announces 2013 Class

Posted on March 06, 2013
Tech Wildcatters recently announced the 11 participants for their 2013 class. As usual, this class features participants from around the country. Read about the teams straight from Tech Wildcatters here or their coverage in the Dallas Morning News here.

The Rolling Close

Posted on February 08, 2013
Unlike Series A Rounds, most seed rounds of financing don’t have all investors fund their investment on the same date. Sometimes it’s a matter of logistics for investors, but mostly it’s because the startup is continuously identifying and pitching potential angel investors to join in the seed round...

Price Cap Liquidation Preference Windfall Regulators

Posted on January 23, 2013
Most convertible notes have a price cap as a feature term. Depending on the delta between the price cap and the pre-money valuation of the qualified equity financing, the convertible note investors could receive a windfall in terms of liquidation preference...

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Tech Wildcatters Spring 2013 Applications Are Open

Posted on December 06, 2012
Tech Wildcatters, a Forbes Top 10 seed accelerator, is now accepting applications for the fifth cycle of their 12-week accelerator program which begins Spring 2013. The deadline for submissions is January 21, 2013. Comprised of 15 startups, the fifth cycle is set up to be the largest group of companies to go through the Tech [...

Convertible Note Transaction Documents

Posted on July 17, 2012
It’s a common misconception that the ‘convertible note’ is the only legal document used in a convertible debt financing. I often receive emails from entrepreneurs asking for a ‘sample convertible note’ which I assume they are planning to use on their own...

Riding the Elephant

Posted on March 18, 2012
Outsourcing your startup’s early technical development to a dev shop is like riding an elephant in a horseback polo match. You’re on a big beast, but your lack of agility will prevent you from scoring. With the surge in demand for technical co-founders, many startups have no choice but to contract with dev shops to [...

Convertible Note Interest

Posted on February 13, 2012
The principal invested via a convertible note should accrue interest, but the rate should be lower than a typical company non-convertible loan from an investor. The range I see is 5-8% for convertible notes. If a potential investor plays hardball and insists on a high interest rate (i...

Avoid Offensive Liquidation Preferences

Posted on January 10, 2012
In most equity financing rounds, an investor will ask for (and get) a term called a liquidation preference. A liquidation preference is the amount that must be paid to a preferred stock holder before any sale proceeds may be paid to the holders of common stock (i...

Delaware Franchise Taxes

Posted on January 06, 2012
If you haven’t already received your Delaware franchise tax statement in the mail, then it’s probably on the way. You have to give credit to Delaware — they make paying your corporation’s franchise taxes “thrilling.” For example, if you authorized 10,000,000 shares of common stock in your certificate of incorporation, you will receive a franchise [...

Hello World!

Posted on January 05, 2012
Wow, 2011 was a busy year. My clients put together a nice amount of seed and venture financings in 2011. On the home front, my wife and I experienced the arrival of our 3rd new addition to the family. In fact, she even let me revise a term sheet in maternity triage about 45 minutes [...

Startup Weekend Dallas November 18th ? 20th

Posted on November 09, 2011
The 5th edition of Startup Weekend Dallas will be held at the Gravity Centre in Plano, Texas next weekend (November 18-20, 2011). Startup Weekends are weekend-long, hands-on experiences where entrepreneurs and aspiring entrepreneurs can find out if startup ideas are viable...

Kryptonite Angel Round Terms

Posted on August 22, 2011
Here’s a list of the top 5 deal terms that cause harm to startups at the seed financing stage and therefore should be avoided: 5. Control “Control” of a startup can manifest itself in various forms such as equal (or investor-favorable) representation on the board of directors or a requirement of obtaining seed investor approval [...

X Does Not Always Equal X

Posted on July 13, 2011
I’ve done quite a few recent seed deals using various ‘standard’ seed financing docs (Series Seed, TechStars Series AA, etc.). While using these document sets can help reduce transaction costs and the time to close, a startup can run into trouble by trusting deal documents without verification...

Tech Wildcatters Fall 2011 Deadline Approaching

Posted on July 07, 2011
The application deadline for Dallas-based seed accelerator Tech Wildcatters is July 24th. Tech Wildcatters will accept 7-10 startups. What is Tech Wildcatters? Tech Wildcatters is a mentorship-driven startup accelerator that puts participating companies through an intensive 12-week program...

Startup Weekend Dallas 4

Posted on June 06, 2011
The 4th edition of Startup Weekend Dallas will be held the weekend of June 17 to June 19 at Tech Wildcatters HQ (2700 Fairmount, Dallas, TX 75204). Startup Weekends are weekend-long, hands-on experiences where entrepreneurs and aspiring entrepreneurs can find out if startup ideas are viable...

Tech Wildcatters 2011 Pitch Day

Posted on May 16, 2011
Tech Wildcatters will showcase their 2011 class of startups Thursday, May 26th at the Magnolia Theatre in Dallas, Texas. Attend the event and hear what the 2011 class of startups are doing and what they need. You’ll have time to visit with the startups individually, including a happy hour at Lemon Bar...

Big Boy Expenses for Entrepreneurs

Posted on March 31, 2011
While the stereotypical tech startup entrepreneur is 23 years old, single and has no children, the reality is that many tech startup entrepreneurs are married and/or have children. Don’t avoid “big boy” expenses just because you are bootstrapping...

Dallas Entrepreneur Outbreak

Posted on March 24, 2011
Join Alcatel-Lucent Innovation Center and Tech Wildcatters for happy hour tomorrow night and a day of innovation and entrepreneurial idea sharing Saturday with some visitors from the Silicon Valley. 6pm – 9pm Friday Night – Happy Hour and Round Table on Failure with Silicon Valley entrepreneurs: Christian Wiklund – CEO of Skout...

Silicon Beach at SXSW

Posted on March 11, 2011
In the event you are in downtown Austin on Monday around lunchtime, you should check out the “Silicon Beach at SXSW” event at Parkside on 6th Street. The event is being hosted by Mingly and co-sponsored by Techzulu, Nerdy Shirts, and this blog...

Non-Dilution Rights are Wrong

Posted on March 01, 2011
I hate non-dilution rights and if you are an entrepreneur you should, too. I’m not talking about price-based anti-dilution protection that is typical in an angel or VC round. What I’m referring to is a right given to a particular stockholder so that such stockholder’s equity in the company is not diluted by any future [...

How to Evaluate an Offer from a Startup Incubator

Posted on February 04, 2011
Great news — your startup just got accepted to an incubator! But before your startup signs up and cashes that $[XX,000] check, your startup’s co-founders should sit down and evaluate the incubator’s offer. The following are some issues to consider and actions to take before accepting an incubator’s offer: (1) Calculate Valuation and Determine Value...

2010 Startup Lawyer Roundup

Posted on January 11, 2011
A little late this year, but here’s some stats for this blog for 2010: Total Visits: 162,539 visits (94,685 in 2009) Top State Visits: 33,686 from Cali, 14,228 from New York and 12,038 from Texas. Top University Visits: 309 visits from Stanford, 163 from MIT, 150 from Harvard Top Visited Page: If I Launched a [...

Term Sheet Purgatory

Posted on January 10, 2011
There’s a lot of advice about (1) how to attract VCs, and (2) how to negotiate a venture capital term sheet. Both sets of advice tend to ignore the gap between an investor’s expression of investment interest and your startup’s receipt of the term sheet...

Tech Wildcatters Applications Due January 16th

Posted on January 10, 2011
Dallas-based Tech Wildcatters is set to launch their 2nd class and will stop accepting applications January 16th. Their inaugural class of 5 companies raised over $4,000,000 in funding through two venture and two angel rounds. Tech Wildcatters is a startup accelerator that offers up to $25,000 and 12 weeks of hands on mentorship...

Interview with Mike Brown Jr. of AOL Ventures

Posted on January 06, 2011
I had the chance to chat with Mike Brown Jr., Founder and Partner at AOL Ventures, a few weeks ago. I’ve known Mike for a few years now and during the conversation I asked if we could turn the chat into a formal interview for this blog. He graciously obliged and the following Q&A about [...

Key Ring is Hiring

Posted on January 03, 2011
Key Ring is a mobile app by Mobestream Media on both iPhone and Android that brings all your loyalty cards together. You use Key Ring to scan & store your existing loyalty cards, enroll in new loyalty programs, and access exclusive coupons and discounts...

TRUE linkswear

Posted on December 14, 2010
About 95% of my clients are tech startups. And while I love downloading my startup clients’ apps to my iPhone, it is also nice to download a client’s product to my feet: (Disclaimer: Not actually my feet) TRUE linkswear is a Dallas startup, co-founded by Sean Eidson, Robert Rigg and Ryan Moore...

The $10,000 Sentence

Posted on December 13, 2010
You’re in a startup and everything is scarce including capital. Thus, when you encounter a legal issue (like incorporation) you conduct a cost-benefit analysis of hiring a startup lawyer. I understand the need to ensure you are getting value for the small amount of capital you start with — I did the same thing when [...

Startup Weekend Dallas is a Global Startup Battle

Posted on November 10, 2010
Startup Weekend Dallas is now a true global startup battle. The winning team from Dallas will go head-to-head against the winning teams from Beirut, Boston, Chicago, Cleveland, Detroit, Indianapolis, New York, Portland, Seattle, Sofia, and Tulsa. From http://globalstartupbattle...

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