Grant Your Equity Wisely
Which conversation would you rather have? “So…that 10% equity we gave you last year – yeah, I’m gonna need half of that back,” or “Thanks so much for everything you’ve been doing for the company; here’s another 3% equity!” As […]
The Three Levels of Control Within an Organization
A common misconception in any startup is thinking ownership percentage equates directly with control. While it’s true that the majority equity holder(s) usually controls the business, this isn’t necessarily always the case. Let’s break it down. Day-to-Day Operations Day-to-day operations […]
The Repeal of PASPA
On Monday the Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992 (“PASPA”), the federal ban on sports betting. In a 6-3 ruling, SCOTUS held that PASPA unconstitutionally commandeers state legislatures by dictating what they “may […]
Dilution Done Well
The word dilution may sound scary to the uninitiated, but it shouldn’t. In fact, dilution is a good thing when done appropriately. The adage is that you’re better off owning a little piece of something worth a lot then owning […]
Why You Should Be Anti Anti-Dilution
A client, who had already raised some money and thus had a few people on his cap table, came in recently with a term sheet whereby the prospective investor had requested “anti-dilution” protection. If you’re not familiar with anti-dilution, it […]
Finding a CPA
As I’ve discussed before, the four external pillars of any small business are a lawyer, a CPA, a banker, and an insurance broker. Each of these professionals will be critical to the growth and health of your business. The first […]
Design Is About Input
Between the law firm, other startups I’ve started, and advising clients, I’ve interacted with hundreds of designers and developers through the years. The most critical thing that I’ve learned is that design is about input, not output. Let me give […]
Working With Developers
Failure to have a clear written agreement with developers is the most frequent problem I see with early-stage companies. And one that is completely avoidable. Here are a few common issues.
Forming an Entity (LLC v. C-Corp)
Okay – it’s time to actually form the business. You’ve built your pitch deck, received feedback from naysayers, visited with your attorney, and worked out the structure with your co-founders. The next step is to incorporate your company so that […]
How Founder “Vesting” Really Works
Vesting is the process whereby a recipient of equity earns the equity, or the right to purchase it in the case of options, over time. As I mentioned in my last post, the typical schedule is 4 years with a 1-year cliff. […]