The Startup Lawyer: Corporate & Securities Law

Home -> Law Blog Directory -> Corporate & Securities Law Blogs

Corporate & Securities Law

The Startup Lawyer

Entrepreneur and Startup Company Law

Post Frequency: 6.1/day

Last Entry: November 19, 2009 at 08:51:20

CoHabitat ? Startup Weekend Dallas Launch Party

Posted on November 19, 2009
CoHabitat is hosting the official Startup Weekend Dallas launch party this Friday night. A big thanks to Blake Burris for hosting the event. Where: 2517 Thomas Ave. Dallas 75201 When: Friday, November 20th; 10PM ? 1AM CoHabitat is a startup community and coworking space in Uptown Dallas...

2,000 Reasons To Attend Startup Weekend Dallas

Posted on November 09, 2009
It was recently announced that over $2,000 in cash will be given away to the top teams at Startup Weekend Dallas. The prizes will be determined by community vote and some panelists. Register here for Startup Weekend Dallas. Share this on FacebookTweet This!Share this on del...

Startup Weekend Dallas: 1 Day Left For 20% Off

Posted on October 29, 2009
Before you get ready to go trick-or-treating, just wanted to give you a courtesy reminder that the 20% early-bird discount available to those wanting to attend Startup Weekend Dallas expires tomorrow night. Register with the code “swearlybird” before 6pm on October 30th to receive this discount...

5 Common Founder Mistakes

Posted on October 23, 2009
This is a re-post of an article that I wrote about common founder mistakes for StartupLucky.com and Killerstartups.com (not sure if it went out yet). 1. Spending Too Much Time Keeping Your ?Unique? Idea Top Secret. Some founders attempt to have everyone within 25 feet of them sign an NDA...

To access blog feed reader register for free. (You will also learn about new ways to read and access the freshest law blogs.)

Startup Weekend Dallas Discount Code

Posted on October 21, 2009
There’s a 20% early-bird discount available to those wanting to attend Startup Weekend Dallas. Register with the code “swearlybird” before 6pm on October 30th to receive this discount. Buy tickets here, or find out more about the weekend event.

Is Your Startup?s Name Available in Delaware?

Posted on October 13, 2009
Delaware has a pretty sweet Name Availability Search Tool via their Division of Corporations. If your desired entity name isn’t available to reserve, then that name isn’t available for a new corporate entity filing in Delaware. If your startup name is available, you can reserve the name online for $75...

Startup Weekend Dallas

Posted on October 12, 2009
Startup Weekend is coming to Dallas the weekend of November 20-22 at the Big in Japan offices at the INFOMART. I’m one of the local organizers, so I’ll keep you updated as we get closer to the event. If you are interested in sponsoring the event, ping me...

Don?t Create an ?Issuance Pool?

Posted on October 02, 2009
“We want to have 30% of the startup company at exit.” -Anonymous Startup Founders Occasionally, founders will plan out their startup’s lifespan to the point of pre-determining their final equity figure after all hires and investments have been made...

Should Your Startup Hire a Finder?

Posted on October 02, 2009
Raising capital is not easy. While startup entrepreneurs usually have a strong network of people within their own industry, many entrepreneurs lack contacts at venture capital firms and other angel groups. And even if the entrepreneur knows about such funding sources, it’s difficult to get solid intros to such people...

Start-Up Tool Kit From Orrick

Posted on October 02, 2009
Forgot to mention that Orrick released a Start-Up Tool Kit over the summer. From Orrick’s site: Orrick’s Start-Up Tool Kit is a comprehensive set of resources designed to aid start-ups and their founders on the journey from the “garage” to the global marketplace...

Startup Docs from TheFunded.com

Posted on September 29, 2009
TheFunded.com has just released a “Complete Set of Founder Friendly Legal Docs” via its website. (Hat tip to @bradleyjoyce at the Fort Worth Startup Blog) The sample startup documents, located at docstoc.com, include: - Bylaws - Certificate of Incorporation - Initial Stockholder Consent - Invention Assignment Agreement - Restricted Stock Purchase Agreement - Indemnification Agreement - Initial [...

What is an Option Pool?

Posted on September 29, 2009
An option pool is an amount of a startup’s common stock reserved for future issuances to employees, directors, advisors, and consultants. The option pool is created pursuant to a written plan in order to satisfy Rule 701 which provides a registration exemption from Section 5 the 1933 Securities Act...

You Can?t Spell Corporation Without ?IP?

Posted on September 01, 2009
I watch “Shark Tank” on ABC. I had high hopes for the show, but it’s quickly turning into a disaster. A segment on Sunday’s episode did manage to highlight a key point for startups: TRANSFER THE INTELLECTUAL PROPERTY TO YOUR STARTUP COMPANY In the episode, Coverplay Inc...

Interlude

Posted on August 31, 2009
Sometimes I feel like I don’t have a partner Sometimes I feel like my only friend Is the blog I author, The Startup Lawyer Lonely as I am, together we cry This concludes my blog’s 70-day interlude. Regular posting resumes tomorrow. In the meantime, check out these 2 posts from other great blogs: The One Number You Should [...

Venture Capital Geography & Performance

Posted on June 22, 2009
I’ve always been skeptical of the “you have to be in the Valley” to be a successful startup. Well here’s some potential ammo for those of you being pressured into moving, whether from Dallas to Boston, or Rancho Cucamonga to the Valley: Non-local investments made by venture capital firms based in the Valley, [...

What is a Registered Agent?

Posted on June 16, 2009
A registered agent is someone, either a company or an individual, that a corporation appoints to receive service of process and other official notices such as state franchise tax notices. Service of process is how a third party gives your company notice of a pending legal matter, which allows your company to respond accordingly...

June One-Six-Seven-One

Posted on June 16, 2009
Back in high school, I told my closest friends that “when I have a law firm, 2pac will be playing in the office.” I really didn’t plan to have my own law practice in high school, I was just letting my friends know that I wouldn’t change...

The 83(b) Election For Startup Founders

Posted on June 10, 2009
If founders stock is issued subject to a vesting period, each founder should make a Section 83(b) election with the IRS within 30 days of purchasing the restricted stock. If a founder fails to make a 83(b) election, each vesting milestone will be a taxable event for the founder...

Startup ?Odds of Success? Calculator

Posted on June 10, 2009
StartupNation released an “Odds of Success Calculator” so that entrepreneurs can “see if your business is prepared for success.” The calculator derives your odds of success based upon your answers to the following 8 questions: (1) About how much debt and equity capital has been provided to your business? (2) How long do you think it [...

Don?t Oversmart Your Startup?s Business Plan

Posted on June 08, 2009
A couple of weeks ago, I retweeted a Brad Feld post titled “Startup Cost Projections for First-Time Entrepreneurs.” The passage that interested me the most was: The biggest mistake first time entrepreneurs make is that they fall prey to the idea that they need to put together a five year P&L forecast and cash flow [...

June Startup Events in DFW

Posted on May 29, 2009
There’s quite a few startup events going on in DFW in June: June 1 - SpringStage Startup Happy Hour What: The happy hour is a monthly get together for entrepreneurs interested in building a local startup community. Where: 1950 Stemmons Freeway, 1st Floor High Tech Bar, Dallas, Texas 75207 When: 5pm-8pm Cost: $0 June 4 - FundingPost...

What is a Liquidation Preference?

Posted on May 01, 2009
The liquidation preference is the amount that must be paid to the preferred stock holders before distributions may be made to common stock holders. The liquidation preference is payable on either a liquidation of the company, asset sale, merger, consolidation or any other reorganization resulting in the change of control of the startup...

Stock for Fees

Posted on April 28, 2009
Recently I’ve written about potential conflicts of interest between you and your startup lawyer. Now for the main event: Stock for Fees. This situation arises when a startup company offers stock to a lawyer in exchange for legal services. I’ve derived the following 2 postulates to explain why startups and lawyers agree to [...

The Funded Founder Institute Posts ?Class F? Startup Documents

Posted on April 23, 2009
I got a tip from @Pietari that another set of startup documents were released today. The Funded Founder Institute just released a very founder-favorable set of startup documents centered around “Class F Common Stock.” The Class F Common offers founders various protective provisions such as: -2 to 1 Board votes per founder relative [...

WSGR Launches Term Sheet Generator

Posted on April 22, 2009
I just found out from Altgate.com that Wilson Sonsini has launched a “Term Sheet Generator.” Here is WSGR’s description of the free tool: This tool will generate a venture financing term sheet based on your responses to an online questionnaire...

Should Your Startup Lawyer Get a Finder?s Fee?

Posted on April 17, 2009
Heck no. Your lawyer should not get a contingent finder’s fee for introducing you to investors or potential acquirers. I think taking a finder’s fee would be a greater conflict than sitting on your startup’s board of directors. I’ve always felt introductions, whether to an accountant, potential co-founder, or investor is just part of [...

Should your Startup Lawyer also be a Director?

Posted on April 13, 2009
Startup founders sometimes ask their startup lawyer to serve on the board of directors. The founders may feel that their lawyer is a prime candidate for a board seat since their lawyer (a) is familiar with their startup, and (2) has dealt with a myriad of startup company issues through the lawyer’s representation of [...

Google Officially Launches Venture Capital Fund

Posted on March 31, 2009
I blogged about the rumors in the past, but Google made it official yesterday and announced the launch of their own venture capital fund. Reports are that Google will commit about $100MM to the fund. According to their blog post, they plan on investing in other sectors than just Internet and software: [...

Workinonit

Posted on March 26, 2009
I haven’t died nor abandoned this blog. Nor did LegalZoom adultnap me after my last article. My day job has kept me busy, but that’s not why I haven’t been posting. In lieu of writing, I’ve been planning the evolution of this blog which for now is comprised of 2 main things: (1) [...

Why LegalZoom Fails Startups

Posted on February 21, 2009
Thinking of saving some cash and using LegalZoom to incorporate your startup? Think again. While incorporating with LegalZoom is a viable option for some new businesses, LegalZoom comes up way short for startups. LegalZoom just doesn’t offer the documents a typical startup needs: Shareholders Agreement? Nope...

Drink and Vote Today!

Posted on February 16, 2009
2 quick announcements: (1) Fort Worth Startup Happy Hour tonight at the Flying Saucer. Starts at 5pm. (I hope you don’t have to speak Klingon to get in.) (2) Vote for Big In Japan in the Mobile Monday event in Spain. I’ll also have another announcement about this blog soon…and a real post, too...

TechStars Releases Model Seed Funding Documents

Posted on February 09, 2009
TechStars released a set of model seed funding documents that they use as a staring point for their seed stage financings. The model seed funding documents include: Term Sheet. This sets out the terms of the proposed seed investment into your startup and alsos include the proposed cap table (reflecting the seed investment)...

ShopSavvy on the iPhone

Posted on February 06, 2009
I frequently get requests from clients to be a beta tester for their software. Normally I don’t participate in beta tests because frankly I am not tech savvy enough to figure out what is going on. But today my iPhone is playing beta tester because the team at Big in Japan Inc...

The Superbowl Example of ?Stay Ready?

Posted on February 01, 2009
Back in January, I wrote a post about how entrepreneurs should always stay ready for potential opportunities (rather than get ready once they pinpoint one). Well, today seems like the appropriate day to provide a real-world example of staying ready. I met Jared Retkofsky in the fall of 2008...

2009 Venture-Backed IPO!

Posted on January 30, 2009
It is bound to happen eventually, right? A venture-backed company will break the drought and find an exit via IPO. Well, OpenTable filed with the SEC and is looking to raise up to $40MM in an initial public offering. If successful, OpenTable will be the first venture-backed IPO in several months...

Delaware is Suffering: Will Incorporation Fees Increase?

Posted on January 08, 2009
I’ve blogged before about the benefits of incorporating in Delaware. Thus, I was somewhat shocked to see the Deal Journal blog about how Delaware is becoming another victim of the credit crunch. I never thought about how much revenue Delaware receives from its Division of Corporations, but the article contained this statistic: Delaware?s Division [...

More VC Gloom But With Colorful Charts

Posted on January 07, 2009
TechCrunch just posted some charts regarding the utter lack of venture-backed exits in 2008. In summary, 2008 saw 6 venture-backed IPOs (down 93% ) and 260 merger & acquisition deals (down 27%). And as you might expect, the prospects aren’t that great for 2009...

Video Comedy on Raising Venture Capital, Part 2 (Hiring a Venture Lawyer)

Posted on January 07, 2009

Video Comedy on Raising Venture Capital, Part 1

Posted on January 07, 2009

The Billable Hour is Dying?Slowly

Posted on January 06, 2009
The billable hour. Ugh. I don’t like it, and I’m pretty sure you don’t like it either. The good news is that the bandwagon for murdering the billable hour is gaining more members every week. I came across an article about how a partner at a very large firm just penned [...

Skip the LLC

Posted on January 06, 2009
“My startup will start out as an LLC and then change to a corporation when/if…” This quote, or similar derivation, is a common fact pattern I hear from new clients or general inquiries. I think most entrepreneurs are attracted to the LLC because they hear it is “simple” or “easily-managed” or “flexible...

Going All In

Posted on January 05, 2009
Many entrepreneurs struggle with the decision to work full time in their startup

Stay Ready in 2009

Posted on January 04, 2009
How startups can stay ready for 2009

The Startup Lawyer 2008 Recap

Posted on December 31, 2008
As the year is about to close, I wanted to wish all of you a Happy New Year. Here’s a list of the blog’s 2008 top 10 most viewed articles: 1. 7 Legal Documents for Your Tech Startup (10,243 pageviews) 2. How to Avoid Being Ripped Off When You Lease Office Space, Part [...

This Little Piggy Went to the Market

Posted on December 29, 2008
My mother hails from the Philippines. And over the years, I’ve had the chance to experience two different cultures during the holiday season. Like most of America, Filipinos enjoy a cooked ham at Christmas. Except, Filipino ham (aka “Lechon”) is presented in a different way than the traditional honeybaked & coated in [...

Vote for ShopSavvy in the 2008 Crunchies

Posted on December 29, 2008
ShopSavvy is a nominee in the "Best Mobile App" category

Don?t Hate On Your VC For Exercising Anti-Dilution Provisions

Posted on December 23, 2008
There’s a lot of talk about down rounds now in the venture capital industry since valuations are down. So I suspect a lot of venture-backed companies are dusting off their Series A Preferred Share Agreements and taking a look at the anti-dilution provisions held by their investor(s)...

4 Things You Might Not Know About This Startup Lawyer

Posted on December 23, 2008
1. I was a crazy stutterer. 3pm-4pm, MWF. That wasn’t my economics 502 course schedule at USC, that was my speech therapy session schedule from the 3rd to 5th grade. I’m pretty sure I only made it out of junior high alive because I was one of the biggest kids [...

Selling Your Startup with Convertible Debt

Posted on December 23, 2008
I previously mentioned that convertible debt is a good way to raise capital for most startups. The main reason why convertible debt is beneficial for startups is that it delays coming up with a valuation figure at the seed stage–the valuation conundrum is essentially punted to the Series A (or “qualified financing” stage)...

How Will You Bootstrap in 2009?

Posted on December 23, 2008
RIP Good Times. Get rid of your cars. This recent wave of “learn to live with less” advice is nothing new to those in startups. In fact, startups just hope for the day they can have the option to live with a little more. But there are a lot of companies [...

The Basics of Convertible Debt Financing

Posted on December 23, 2008
Selecting the optimal structure when raising capital for your startup can be a challenging task. When clients ask me for my recommendation, I find myself recommending the convertible debt financing route more often than traditional equity financing (i...

The Basics of Convertible Debt Financing

Posted on December 22, 2008
Selecting the optimal structure when raising capital for your startup can be a challenging task. When clients ask me for my recommendation, I find myself recommending the convertible debt financing route more often than traditional equity financing (i...

Microsoft BizSpark Program for Startups

Posted on December 18, 2008
I’m probably not qualified to be telling you about software for your startup, but I wanted to mention that Microsoft is offering free software to qualified startup companies through its BizSpark Program. A few weeks ago, I had a chat with Jared Bienz with Microsoft about the BizSpark Program...

Back to the Future

Posted on December 18, 2008
I got a few compliments on my new design, but the response was overwhelmingly negative. So back to the old design it is. I’ll probably still do some tweaking to the sidebar area of this blog. Thanks to all of those that responded either way via IM, email, comments, and twitter.

The Startup Lawyer is Cleaning House

Posted on December 17, 2008
I decided to change my blog theme, as I felt the last theme had too much clutter. The rotating images on the homepage was nice, but I didn’t like how long it took to load. The best part about changing the theme is that I got rid of that picture with me in [...

Venture Capitalists Want to Skip 2009

Posted on December 17, 2008
The National Venture Capital Association (NVCA) released its annual “Predictions Survey.” The NVCA conducted the survey in the last 3 weeks and received more than 400 responses. As you might suspect, it looks like a tough year for VCs and startups alike...

How to Get Served on Facebook

Posted on December 16, 2008
Apparently email has been used in the past to serve legal process on a person, but someone recently got served via the Facebook social network.: Australian Couple Served with Legal Documents via Facebook Service of process is important because it gives the defendant notice that a legal proceeding is going to take place...

Guy Kawasaki on NDAs

Posted on December 10, 2008
Recently I have been asked a lot of questions regarding nondisclosure agreements (NDAs) and investors, either angel or venture capital. I previously wrote my thoughts on trying to drop NDAs on venture capital firms in “Why a VC Will Take a Lighter to Your NDA...

Series A Pre-Money Valuations Down 25 to 50 Percent

Posted on December 09, 2008
Connie Loizos of Private Equity Hub interviewed Bob Ackerman, co-founder of Allegis Capital, regarding the current state of the VC industry. Ackerman made a few quasi-dire statements for both startups seeking capital and firms looking to provide capital, most notably: In response to the current state of Series A pre-money valuations, Ackerman said: Depending on [...

How to Blow $340MM on Blow

Posted on December 07, 2008
I suspect more of these “startup blows millions” stories will be surfacing in the coming months, but a story in today’s SF Chronicle might be hard to top. “How ‘Visionary’ Raised - and Lost - a Fortune” details how John P...

Preferred Stock: Where ?F? in a Class Can Equal Success

Posted on November 28, 2008
If you pay any attention to TechCrunch or Venturebeat, you’ll see stories titled “Startup Raises $X Million in Y-round Financing.” When the “Y” in story is a large number, do not assume that the startup company is tanking...

I Got a Term Sheet, Now What?

Posted on November 11, 2008
Getting a term sheet from an investor is like getting an invitation to the Prom in January–you’ve got a long way to go before you dance. When you get a term sheet from a VC or angel investor, you need to decide whether the economics of the deal feel right...

Election Calls Turn to Capital Calls

Posted on November 07, 2008
The election is over and thankfully so are those robotic “vote for prop 98c(ii) or else your head will explode and dolphins will die” phone calls. However, some large institutions wish they were getting those calls instead of the capital calls from various venture firms...

7 Legal Documents for Your Tech Startup

Posted on November 05, 2008
When launching a startup, you want to make your startup as valuable as possible. But in order to do that, your tech startup needs to ensure that (a) the intellectual property is owned by the startup, and (b) the co-founders who own the startup have proper incentives and rules to handle inevitable contingencies...

Don?t Go Crazy with Complex Rounds of Seed Funding

Posted on October 21, 2008
I loved Pitch Camp. Flip Flops. Free donuts and pizza. Hours of “unauthorized” advice from the angel investor, venture capital, and journalism communities. It sure beat the heck out of any legal conference I’ve ever attended. At Pitch Camp, a fund’s partner told the crowd that he turned down a [...

You Can?t Hit a Home Run Unless You Step Up to the Plate

Posted on October 15, 2008
Judging by the recent spike of emails and calls, more of you are considering diving into the startup world. I think this is the perfect time to do so. And no, I haven’t been in a coma the last month or two. There is tremendous opportunity now...

Par Value for a Startup Company?s Stock

Posted on October 11, 2008
Par value is the minimum price that a corporation can issue its shares. While I typically see par values of either $1 or “no par value” when looking at startups that have incorporated on their own, I recommend that par value be set at $0...

How Many Shares Should a Startup Company Authorize at Incorporation?

Posted on October 10, 2008
An often overlooked aspect of filing a certificate of formation or articles of incorporation is determining how many shares the new corporation should authorize. This decision doesn’t really matter to most businesses (I don’t have a clue how many shares I authorized when I incorporated my law firm), but startup companies aren’t like most [...

Burnout Rate

Posted on October 06, 2008
In retrospect, the signs were there. Three consecutive nights dreaming about legal document drafting, a 36-hour illness almost worthy of an ER visit, and brainlock. I was burned out. I finally decided to take a break this weekend. And I’m glad I did because now everything’s back to “normal...

Coworking Confidential

Posted on September 22, 2008
Last Thursday, I became the first lawyer to spend a day working from a startup coworking environment. (Well, I’ll make the claim until someone tells me otherwise.) Coworking is a collaboration space for developers, writers, and independents. My coworking application was approved a few weeks ago, after I made the argument that [...

How I Launched My Startup (Law Firm)

Posted on September 18, 2008
I’m often contacted by lawyers for advice about going solo. In the legal world, going solo is the equivalent of quitting your day job and launching your startup full-time. So I’m dedicating this blog post to provide some background about how I launched my startup law firm...

Guy Kawasaki: The Art of Raising Venture Capital, Part Three

Posted on September 04, 2008
Share this Post:

Guy Kawasaki: The Art of Raising Venture Capital, Part Two

Posted on September 04, 2008
Share this Post:

Guy Kawasaki: The Art of Raising Venture Capital, Part One

Posted on September 04, 2008
Share this Post:

Initial Thoughts on the Y Combinator Angel Investor Documents

Posted on August 24, 2008
I wanted to give my initial thoughts on the Y Combinator Series AA Angel Investor Legal Documents that were officially released late last week. I plan to write a document-by-document breakdown in the coming week: Term Sheet - August 26th Stock Purchase Agreement - August 27th Board Consent - August 28th Stockholder [...

Making Dallas the City of Angels

Posted on August 24, 2008
I could use more palm trees here in Dallas and while I’m at it a Togo’s. However, the “City of Angels” reference in this post’s title is about bridging the gap between entrepreneurs and angel investors rather than going “Under the Bridge...

Y Combinator Series AA Equity Financing Docs Back Up

Posted on August 22, 2008
Y Combinator and Wilson Sonsini Goodrich & Rosati are happy to announce the Series AA Equity Financing Documents. The Y Combinator documents are back up again–grab them while you can. At first glance, it looks like they added a term sheet...

The Startup Lawyer on Vator.tv

Posted on August 21, 2008
I got a pleasant surprise in my email inbox yesterday. Bambi Francisco (formerly of Dow Jones MarketWatch and currently founder of Vator.tv) suggested I become a contributor at Vator.tv’s recently-added Newsroom. Other Vator News contributors include Jeremy Liew, Fred Wilson, Don Dodge, Seth Godin, and Mark Cuban...

Soliciting Investors: One Thing Twitter Should Never Be Used For

Posted on August 20, 2008
I saw this TechCrunch article in my RSS reader and thought I would pass it on to you: Social Median Disregards 60 Years of Securities Regulations With Sale of Stock on Twitter I’m a new user of Twitter and I believe it can be used for a lot of things...

When To Fire a Startup Company?s Founder-CEO

Posted on August 20, 2008
When should a founder be replaced as CEO of a venture-backed company? The topic is obviously a touchy one for a startup founder that brought early success to a company. But while a founder might have been successful leading the startup to a funding event, can the founder also lead the [...

Enthusiasm is Not a Substitute for Caution

Posted on August 20, 2008
This morning was my son’s first day of school and he was extremely excited to get going. In fact, he would have ran across the street to his school without looking if I hadn’t stopped him. His elation overtook his ability to evaluate peril...

Still a Glitch with the Y Combinator Angel Funding Legal Documents

Posted on August 19, 2008
I mentioned last week that Y Combinator was open sourcing their angel funding legal documents. I also noted that soon after the documents were made public, people (myself included) received this error message visiting the documents’ URL: Sorry, there’s a glitch with the documents and we had to take them down...

The Entrepreneur Also Rises

Posted on August 18, 2008
I had some free time this weekend and watched “Empire of the Sun” starring Christian Bale and John Malkovich. The movie came out in 1987, but I saw it for the first time Saturday. The premise of Empire of the Sun is that an aristocratic British child is separated from his family (living [...

The Far East Just Got Closer for Foreign Venture Capital and Private Equity Funds

Posted on August 15, 2008
Private Equity HUB is reporting that Shanghai will allow foreign venture capital and private equity funds to register legally as local equities investment firms: Foreign investors with a focus on Chinese equities can set up a Shanghai-registered entity with initial capital of 100 million yuan ($14...

Y Combinator Open Sources Funding Documents?Venture Lawyers Leave Office Early

Posted on August 13, 2008
Well I guess that’s it folks. I had a fun ride. Y Combinator has “open sourced” legal documents they provide to their startups seeking funding. The documents were created by Wilson Sonsini Goodrich & Rosati, Y Combinator’s law firm...

How to Rick Roll a Venture Capital Firm

Posted on August 08, 2008
How to rick roll a venture capital firm with your startup company's pitch

Shouldn?t the Standardization of Venture Capital Documents Lead to Reduced Legal Fees?

Posted on August 07, 2008
As an industry, venture capital is relatively young. Yet it has been around long enough–through busts and booms–that it will not simply go away as some might have you think. Venture capital is a legitimate industry which is now being enhanced through standards and patterns...

Keep the Bridge Burning to a Minimum

Posted on August 07, 2008
A few months ago, I was on a conference call with opposing counsel to negotiate a client’s deal. Things got a little heated (the only time I’ve ever experienced a hostile communication with another attorney) and eventually I got hung up on...

(Apparently) The Startup Lawyer is worth $2,340,000

Posted on August 07, 2008
I thought I’d take Younoodle’s Startup Predictor for a test drive and therefore I had it value this blog. Younoodle is an online entrepreneur community and its “Startup Predictor” estimates what a startup company’s value will be in 3 years...

Dallas Startup Happy Hour

Posted on August 06, 2008
I attended the Dallas Startup Happy Hour (sponsored by SpringStage) last night. This was the second time I attended but this one was especially great because I got to bring along one of my clients who is working full-time on his startup. He got a much-needed break from coding and was able to [...

Venture Fund Economics Series

Posted on August 06, 2008
I thought you should know that Fred Wilson is currently posting a fantastic series about Venture Fund Economics on his wildly-popular venture capital blog, “A VC.” So far, Fred has written about venture fund gross and net returns and how venture funds may have one deal that pays off so well that it returns the entire [...

What is a Pre-money and Post-money Valuation?

Posted on July 31, 2008
Definitions and examples of pre-money and post-money valuations used in venture capital.

Google Planning to Launch Venture Capital Fund

Posted on July 31, 2008
Google is rumored to be planning the launch of its own internal venture capital fund to potentially coincide with Andriod.

Cancel all ?Entrepreneur of the Year? Awards

Posted on July 29, 2008
Ernst & Young alleges Entrepreneur Media is infringing upon EY's "Entrepreneur of the Year" trademark

You Can?t Polish a Sneaker

Posted on July 23, 2008
Why your startup may have the right employee incentive plan but the wrong employee

5 Signs Your Startup Jumped The Shark

Posted on July 20, 2008
How to know whether your startup company has reached the beginning of the end

A Primer on LLCs

Posted on July 20, 2008
Should you start a business as a limited liability company (LLC)?

Reverse Breakup Fees: More Trendy than the 3G iPhone

Posted on July 18, 2008
Why reverse breakup fees and other seller-friendly provisions are becoming more popular in private equity LBO deals

Why the Corporation is King for Getting Venture Capital

Posted on July 17, 2008
Why Your Startup Company Will Need to be a C Corporation to Raise Venture Capital

What is a Private Placement?

Posted on July 15, 2008
A private placement is method of selling securities without registering with the SEC

How to Incorporate Your Sole Proprietorship

Posted on July 15, 2008
How to transform your sole proprietorship into an llc or a corporation

But I Thought Venture Capital was Dead?

Posted on July 14, 2008
The latest numbers show Silicon Valley is not experiencing a capital crunch

What is Preferred Stock?

Posted on July 14, 2008
A definition of preferred stock and how it benefits startups and investors

How to Issue Weak Preferred Stock to Friends & Family

Posted on July 13, 2008
How to issue preferred stock to friends and family without limiting future venture capital rounds.

Why Your Startup?s Founders Stock Should Vest Over Time

Posted on July 11, 2008
How to vest your startup company's founders stock over time to prepare for an exiting founder

Reverse Breakup Fees: Making Acquisitions Less Risky for the Selling Company

Posted on July 03, 2008
How target companies are using reverse breakup fees to re-allocate deal risk

Series FF Stock: How Some Founders Get Liquid at Funding

Posted on July 02, 2008
How Series FF Stock Provides Startup Company Founders with Cash at Funding

Zero IPOs for Venture Backed Companies in 2Q 2008

Posted on June 29, 2008
Why no venture backed companies went public in the second quarter of 2008.

Flipping Your International Startup for U.S. Venture Capital

Posted on June 24, 2008
The Benefits of Moving Your International Startup to America for Venture Capital and Acquisitions

Life is Too Short to Deal with Non-Accredited Investors

Posted on June 12, 2008
Why your startup company should not raise money from non-accredited investors

The Art of the Start by Guy Kawasaki

Posted on June 04, 2008
You need to a flashplayer enabled browser to view this YouTube video

What Venture Capital Investors Want in a Term Sheet

Posted on June 04, 2008
You need to a flashplayer enabled browser to view this YouTube video

Buy or Sell a Startup at BizTrader.com

Posted on April 16, 2008
A new online marketplace for buying and selling companies officially launched this week: BizTrader.com. I believe BizTrader will be a strong competitor to the current company marketplace juggernaut, BizBuySell.com. Both BizTrader and BizBuySell charge customers monthly fees to list their business for sale starting at $39...

Is a VC About to Steal Your Startup Grant?

Posted on April 16, 2008
Venture Capital Firms. They won’t grant you a meeting. If you do get a meeting they won’t sign your nda. And you’ll be lucky if your startup gets any funding. Making matters worse, they could be about to commandeer federal grant money earmarked for small businesses like your startup...

How Much to Pay Your Startup Lawyer

Posted on April 15, 2008
Think back to the last time you wrote a business plan for a startup. Do you recall your estimated expense for legal fees? $1,000? $10,000? $0? How much to spend on legal fees is a common issue for startup companies with more than one correct answer...

Generate Goodwill Instead of Burning a Bridge

Posted on April 14, 2008
A frequent issue entrepreneurs, myself included, deal with is having to handle negative situations with due care and class so as to not erode startup company goodwill, not to mention other business tangibles and intangibles. You can create goodwill for your startup company many ways...

You?re Nobody Till Somebody Steals Your Startup Idea

Posted on March 21, 2008
Many entrepreneurs worry that someone, whether a potential partner, a VC, or a boogeyman will steal their startup idea. If you are worried about having your startup idea “jacked,” I recommend you take a deep breathe and relax a bit–your startup idea isn’t worth that much...

2008 Startup School

Posted on March 11, 2008
The Business Association of Stanford Entrepreneurial Students and Y Combinator are co-sponsoring the 2008 Startup School at Stanford on April 19. Are you a hacker who has thought about one day starting a startup? Have you already started it? Then you’re invited to a free, one-day startup school this April 19 at Stanford...

Startup Lawyer Article Published in the Texas Bar Journal

Posted on February 06, 2008
Just thought I’d mention that the Texas Bar Journal, a monthly publication of the State Bar of Texas, published an article from this blog in its February 2008 issue. The article featured in the technology section is “How to Optimize Your Blog Sale...

Miracles Happen, But Not Every Day

Posted on January 27, 2008
I got lucky. I bought a suit “off the rack” and it fits me perfectly. I purchased this suit in true emergency fashion about two years ago while in Phoenix on a business trip. I ended up not needing it (of course) and stuck it in the back of my closet when [...

Don?t Be Coy With a Letter of Intent

Posted on January 21, 2008
I recently worked on a deal where the prospective seller over-strategized the letter of intent. The seller wanted my client to sign a non-binding LOI that contained about half of what should have been included in the letter. It was extremely frustrating and ultimately was a waste of time, because rather than acquiesce [...

How Will This Economic Downturn Affect Startups?

Posted on January 04, 2008
As the economic downturn begins to spread from sub-prime borrowing to the current credit contraction (and I’m not ready to say the R-word yet), it seems unlikely that startups will be immune from an economic storm that may be felt internationally and across various asset classes...

How To Handle Intellectual Property When Buying A Business

Posted on December 25, 2007
The business purchaser needs to ascertain if intellectual property rights are needed for the continued operation of the business. Intellectual property rights that are important include trademarks, copyrights, service marks, and trade names. All of these IP rights are assignable...

The Deal Behind Letters of Intent

Posted on December 09, 2007
A letter of intent is a pre-acquisition agreement that shapes the preliminary understandings of the parties. Although usually non-binding (for the most part), it serves as the bridge between initial negotiations and the purchase agreement. And that’s important because the letter of intent should facilitate the deal...

Venture Capital Going Green to Get the Green

Posted on November 19, 2007
Al Gore didn’t invent the Internet, but he did make up global warming. (OK, maybe he’s right.) And now the former Vice President is teaming up with Kleiner Perkins Caufield & Byers to find, fund and accelerate green business, technology and policy solutions to help solve the current climate crisis...

Invention Agreements: A Potential Startup Killer

Posted on November 14, 2007
“Get advisers” is a common recommendation given to a startup company entrepreneur. However, entrepreneurs should use caution when selecting advisers for his or her startup company. Your advisers may come pre-packaged with restrictive covenants that have the potential to kill your startup...

How to Avoid Being Ripped Off When You Lease Office Space, Part III

Posted on November 11, 2007
This is Part III of a series about how to lease office space. You can begin with Part I or skip to Part II. In Part III, we’ll continue discussing the provisions that your startup company needs to consider before leasing office space. Your startup company may not have to negotiate each provision, but you should [...

How To Optimize Your Blog Sale

Posted on November 06, 2007
Bloggers optimize. Bounce rates, feeds, heatmaps, plug-ins, keywords, and sneeze pages are just the tip of the blogger’s optimization iceburg. So why are blogs sold in such a nonoptimal way? Blog selling is once again a hot topic. Most articles deal with what multiple of revenue or subscribers a blog will sell for on the [...

Get a Deal Done with a Go Shop Clause

Posted on October 29, 2007
When acquiring a company, you typically want to lock down your target and prevent it from seeking other potential buyers (see no shop clause). But in some situations, allowing your target to shop the deal around, under the terms of a “go shop” clause, can actually facilitate the transaction and get the deal done...

Virgin Money Goes to Waste

Posted on October 25, 2007
I heard about Virgin Money last week and I finally got the chance to take a look around last night. Basically, Richard Branson’s Virgin US investment firm acquired a majority stake in CircleLending, a venture that helps manage loans between family and friends...

Keep Your Startup Co-Founder Closer

Posted on October 21, 2007
Sun Tzu is generally credited for coming up with the phrase, “Keep your friends close, and your enemies closer.” He obviously never launched a startup and got shafted by a co-founder. Entrepreneurs often believe their startup company faces legal threats from only external sources...