Where can I download good templates for boilerplate legal agreements?
Ethan Stone
Question: Where can I download good templates for boilerplate legal agreements, such as NDAs, Board of Advisor agreements, employment agreements, and other typical things a startup would need?
Answer by Ethan Stone, Stone Business Law
Let me start with a couple of caveats (yes, I’ll give you some links at the bottom).
First, I’m not your lawyer and this answer doesn’t establish an lawyer-client relationship. I’m giving a generic answer to a generic question to educate the users of this site.
What are the advantages of convertible debt?
- Ethan Stone
Question: I’m looking to raise angel funding. What are the advantages of convertible debt? And should I do convertible debt over a typical seed round where I set a valuation and sell shares in my company?
Answer by Ethan Stone, Stone Business Law
First, a quick caveat: I’m not your lawyer and this answer doesn’t establish an lawyer-client relationship. I’m giving a generic answer to a generic question to educate the users of this site.
Now to the question: There are two main advantages of raising seed funding through convertible debt. Neither one is an unequivocal benefit, so I’ll give you the pluses and minuses.
King & Spalding’s 4th Annual PharmaU
Richard Hsu
by Richard Hsu at One Page Blog
With contributions from some of my colleagues at Pharma Ventures, Aquilo Partners and Linda Pullan, Ph.D., here is a short presentation I recently delivered at King & Spalding’s PharmaU on life science and collaboration agreements.
Deferred Compensation = Accelerated Dilution
Richard Komaiko
by Richard Komaiko, Cofounder of AttorneyFee
A few weeks ago I met a really promising seed stage team at a Hackers and Founders event. Out of sheer curiosity I asked them whether they had gone through all the legal formalities associated with starting a company. They said that they had just met with an attorney, and were planning on hiring him the next day. “How much did he quote you for the incorporation?” I asked. “He said it would be $2,500.”
What’s the best way to prepare in advance for a possible acquisition?
Charles Swan
Question: What should I do ahead of time so that my company is ready should an acquisition offer come through?
Answer by Charles Swan at The Virtual CFO
Preparation! G&A is often overlooked in favor of R&D and Sales and Marketing in developing companies. In order to be acquired, you will need to comply with basic corporate governance requirements (not all inclusive):
What are the top 5 things we should pay attention to when negotiating a term sheet with VCs?
Ethan Stone
Question: My startup is now going out for its first round of venture financing. What are the top 5 things we should pay attention to when negotiating a term sheet with VCs?
Answer by Ethan Stone, Stone Business Law
First, a quick caveat: I’m not your lawyer and this answer doesn’t establish an lawyer-client relationship. I’m giving a generic answer to a generic question to educate the users of this site.
Now to the question: I’m going to cheat a bit and combine some things that tend to appear as separate line items on a term sheet into general categories. But here’s my top five.
What are the advantages & disadvantages of incorporating in Delaware?
Naomi Kokubo
Question: What are the advantages and disadvantages of incorporating in Delaware? I hear it’s important for an IPO, but if we don’t plan on going public anytime soon, should I bother to incorporate in Delaware?
Answer by Naomi Kokubo, Editor of Founders Space
That’s a really good question. We did some research and we found an interesting article on the advantages and disadvantages of incorporating in Delaware.
My partner sold our company, but I did not get a dime!
Ethan Stone
Question: I formed an LLC with a partner a couple years ago, and it didn’t work out. I left him with a 70% stake and bowed out. I just heard that he licensed off the software for a pitance, then he joined the company that licensed it, getting a salary and a huge signing bonus. I didn’t get a dime from this transaction, even though I own 1/3 of the LLC. Is this legal?
Answer by Ethan Stone, Stone Business Law
When negotiating VC funding, what should I look out for regarding founders termination clauses?
Question: I understand that venture capitalists like to include a founders termination clauses in most of their deals. What should I look out for with these termination clauses? And what should I include to protect myself?
Ethan Stone
Answer by Ethan Stone, Stone Business Law
First, a quick but important clarification: I’m not your lawyer and this answer doesn’t establish a lawyer-client relationship. I’m giving a generic answer to a generic question to educate the users of this site. The information below is general in nature and should not be understood as a substitute for personal legal advice.
Can I close that company with the active judgment?
Question:
I am the registered owner of a defunct company that has a judgment against it. In the Commonwealth of Virginia, can I close that company with the active judgment?
Ethan Stone
Answer by Ethan Stone, Stone Business Law
First, a quick but important clarification: I’m not your lawyer and this answer doesn’t establish a lawyer-client relationship. I’m giving a generic answer to a generic question to educate the users of this site. The information below is general in nature and should not be understood as a substitute for personal legal advice.
What’s the best way to bring on a partner?
Ethan Stone
by Ethan Stone, Stone Business Law
First, a quick but important clarification: I’m not your lawyer and this answer doesn’t establish an lawyer-client relationship. I’m giving a generic answer to a generic question to educate the users of this site.
Second, a warning. I’m going to sketch out some of the key issues to consider. As you’ll see, however, this is not a simple question. The answers depend a lot on your specific situation and preferences. Moreover, getting this wrong can cause huge problems down the line. Mistakes in this area regularly destroy otherwise successful businesses. Accordingly, you should not try to do this yourself if at all possible. You need an experienced lawyer who can help you think through your particular issues and come up with a solution that it going to work for you.
Where can I find a stock plan & equity compensation documents?
Dan Walter
Dan Walter, CEO of Performensation
This video is a fun way to learn about stock option plans and equity compensation.
ADDITIONAL ANSWER:
Below is a link to the Equity Compensation Documents provided by Orrick. These are a good starting point, but we still highly recommend that you speak with your attorney and go over these documents together.
Go see Equity Compensation Docs
Stock Plan
Many companies use employee stock options to compensate, retain, and attract employees. The Stock Plan is the general governing document containing the standard terms and conditions of the options to be granted. This document represents the standard provisions for a Silicon Valley start-up company.
Do you have any templates for employment and consulting agreements?
Naomi Kokubo
by Naomi Kokubo, Editor of Founders Space
Below is a link to the Employment & Consultant Documents provided by Orrick. Keep in mind, these do not replace having a good attorney, but they do provide a good starting point.
Go see Employment & Consultant Docs
Employee Offer Letter
Can I use Facebook’s TOS & Privacy Policy for my website?
Antone Johnson
by Antone Johnson at Bottom Line Law Group
QUESTION:
I’m creating a social networking site. Is it legal for me to basically copy off Facebook’s terms of service and privacy policies and just amend them for particulars of my own site? Or can Facebook file some sort of complaint against me for that?
ANTONE’S ANSWER:
What’s the best way to protect my innovation from being duplicated?
Naomi Kokubo
by Naomi Kokubo editor of Founders Space
QUESTION:
Is there a way to secure the rights to an innovative plastic card processing program (alternative to cash) targeting a specific target market? So that large banks and financial institutions (other than the one we potentially partner with) cannot duplicate?
ANSWER:
The first thing you can do is file a provisional patent. This is fairly easy to do and will cover you for one year. Within that year you will need to file one or more full patents based on the provisional patent. This is probably your best protection.
How to Raise Cash Without Giving up Equity
Feisal Mosleh
by Feisal Mosleh of New Ventures Partner at Juldee Innovation Group
Here’s a novel way to raise cash without even giving up equity. The catch?
You must already have granted patents for your wunderkind statup or venture. if you do, read on….If you don’t, you might want to file some patents ASAP – in a a year or so they may be able to fund your company !
Get your startup or new venture inside a larger corporation going by getting a dose of juicy funding through your patents.
How does it work?
License Animation Project
Richard Hsu
by Richard Hsu at One Page Blog
Inspired by Caltech’s Mechanical Universe Project, I made a short video comparing the typical grant language of a software license, a biotech license and a patent license, all in about 60 seconds.
How do I deal with out-of-state and overseas partners?
by Geraldine Zaroukian, Managing Director of Zarig.com
QUESTION:
1. Should I do a partnership or LLC with my partner in Florida and give shares to my partner in Portugal? Or can I give them both ownership in the company?
2. Do I need to have a Florida State Business License along with a Kansas License too — especially if my Florida partner picks up some business?
ANSWER:
Startup Company Forms
Richard Hsu
by Richard Hsu at One Page Blog
My former Venture Law Group colleague and Harvard Law School graduate, Jeff Thomas, has been teaching entrepreneurship courses in various law and business programs. He formed his own company CrazyBrains LLC with the goal of helping entrepreneurs by open sourcing startup corporate forms. Here is his nicely put together one-pager.
Click here for downloadable PDF: Startup Company Forms
Click here to read more from Richard Hsu.
IP Ownership in Joint Development
Richard Hsu
by Richard Hsu at One Page Blog
After watching Sal Khan and the Khan Academy, it left me feeling envious of his abilities and talent, but also inspired to try and emulate his video concept. With the help of my 12 year old daughter Maya, I have made a video which explains IP ownership in a joint development agreement on 1 page in about 100 seconds:
What law firm do you recommend for a startup?
QUESTION:
One of our founders asked the question, “We’re starting our search for a law firm. Do you have anyone you’d recommend? We’re looking for someone with investor contacts in our industry and someone with whom we can defer payment.”
ANSWER:
Naomi Kokubo
by Naomi Kokubo cofounder of Founders Space
Most of the larger law firms in Silicon Valley have good investor contacts. Some are more proactive than others. The bottom line is that it’s really the individual lawyer within the firm that counts. You need to find someone you connect with, and someone who believes in you and your business and is willing to go the extra mile to see to it that you get funded.
Where can I find director and officer related documents, including indemnification agreements?
QUESTION:
Where can I find director and officer related documents, including indemnification agreements?
ANSWER:
Naomi Kokubo
by Naomi Kokubo editor of Founders Space
Below is a link to the Director and Officer Related Documents provided by Orrick. Keep in mind, these do not replace having a good attorney, but they do provide a good starting point.
Go see Director & Officer Related Docs
Indemnification Agreement
Indemnification agreements are often provided to a Company’s directors and officers to minimize potential personal liability for actions taken in their capacity as directors and officers.
Stockholder Approval of Indemnification Agreement
Can I Convert a C Corporation to an LLC?
Ethan Stone
by Ethan Stone, Stone Business Law
QUESTION:
I converted my startup from a California LLC to a C Corp. Our business had changed over the past year and I’d like to convert it back. Is this possible?
ANSWER:
First, a quick but important clarification: I’m not your lawyer and this answer doesn’t establish a lawyer-client relationship. I’m giving a generic answer to a generic question to educate the users of this site. The information below is general in nature and should not be understood as a substitute for personal legal advice.
How does an Indian citizen and resident form a company in the U.S.?
Ethan Stone
by Ethan Stone, Stone Business Law
QUESTION:
I am currently a citizen of India, and I live in in India. However, I’d like to incorporate my new startup in US. How do I go about this?
ANSWER:
First, a quick but important clarification: I’m not your lawyer and this answer doesn’t establish a lawyer-client relationship. I’m giving a generic answer to a generic question to educate the users of this site. The information below is general in nature and should not be understood as a substitute for personal legal advice.
Does anyone have a template for compensating new advisors?
QUESTION:
I´m looking for a tempate to formalize compensation for a Scientific Advisor for a project I´m working on — Harvard Med School Prof.
ANSWER:
Eric Ferraro
Is it legal for my company to pay its employees without giving a pay stub along with the check?
Ethan Stone
by Ethan Stone, Stone Business Law
First, a quick but important clarification: I’m not your lawyer and this answer doesn’t establish a lawyer-client relationship. I’m giving a generic answer to a generic question to educate the users of this site. The information below is general in nature and should not be understood as a substitute for personal legal advice.
The answer to this question depends on state law. In California, and many other states, the answer is no.
California Law requires an “itemized statement” including the following:
- gross wages earned
How do I convert a California LLC to a Delaware corporation?
Ethan Stone
by Ethan Stone, Stone Business Law
I have a California LLC, and I’m planning on converting to a Delaware C Corporation in anticipation of funding. What should I consider when making this type of conversion? And what do I need to do to get it done?
ANSWER:
First, a quick but important clarification: I’m not your lawyer and this answer doesn’t establish a lawyer-client relationship. I’m giving a generic answer to a generic question to educate the users of this site. The information below is general in nature and should not be understood as a substitute for personal legal advice.
What are the rules for using photos in a humorous news/parody site?
QUESTION:
We’re launching a website that will use photographs of celebrities, politicians and other public figures. The photographs will be used in parodies, satires and humorous videos of these public figures. (1) Are we allowed to do this without getting in trouble with the celebrities/politicians? (2) Are we allowed to use any photographs we find online (fair use) or do we have to license the photos from somewhere? (3) What’s the best place to get these photographs from? Can we just get the photos from news sites like CNN.com and FoxNews.com?
ANSWER:
Eric Ferraro
How do I surive with truly the next great idea?
QUESTION:
So let’s say I have an amazing idea for disruptive and game changing product. Let’s say it could be bigger than Facebook.
How do I bring the idea to market without being crushed by competitors, investors, and other capable people who are more opportunistic than honorable?
What steps can I take to ensure that I retain control of an idea that may be the next big thing?
ANSWER:
Antone Johnson
Do you know of any law firms who will assist an entrepreneur without charging an arm & a leg?
QUESTION:
I’ve read all the material on forming my startup, from going with an LLC to going with a Delaware C-Corp.
The reality is, I still need help from a professional lawyer to make sure all my paperwork is in order, my structure is the correct one, and so on. I’ve read about different incubators that assist startups in legal aspects so they can focus on product.
However, I haven’t come across any law firms who have special discounts or deferred payment for startups. Do you know of any law firms who will assist an entrepreneur like me with company formation without charging an arm and a leg? Thanks!
