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Forms For Employees, Consultants & Interns

The classification of employee, independent contractor, or intern comes with significant tax and liability ramifications. While an agreement alone will not eliminate the risk of misclassification, it definitely helps.  Here are the correct forms to use with each hire.

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What Business Entity Is Best For Startups

We hate to give a lawyer answer, but . . . it depends. Are you selling cookies or software? Do you think you'll be seeking venture capital down the line? How many people are starting the business?

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Terms For An Advisor Agreement

It is best practice to have a written 'Advisor Agreement' or 'Advisor Letter'. This will manage the expectations of both parties, clearly define the terms of any equity grant, and protect your company. Here's what to include.

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The Legality of Using Satellite Images In Your Product

There are 2,666 satellites orbiting the earth doing all sorts of amazing things like monitoring glacier melt and providing internet access to remote areas.

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Guidance On Return To Office Policies

Here are some things to consider as employees return to the office. Determine which orders (federal, state, and local) apply to you and make sure you're complying with the most restrictive rules. This assessment will need to be repeated on a rolling basis.

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What Are The Funding Rounds

The lines between the rounds have blurred, but this is the general fundraising path. First up is the Friends and Family Round. This is the least formal round of investing and as such there are no hard rules. Keep in mind that any investment deal, even one from Aunt Martha, should be in writing.

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Why Founders' Stock Should Vest Over Time

Unfortunately, founding teams often breakup and having a former founder own a large portion of your company is not a good scenario. To avoid this problem set up a vesting schedule in your Stock Purchase Agreement.

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Minimum Wage Laws

When bootstrapping, it is common for founders to not pay themselves any cash compensation. This approach is sometimes also applied to other service providers, who receive just stock option compensation. Despite the prevalence of this practice, certain rules must be followed or you'll be setting yourself up for liability.

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What's The First Organizational Meeting

The first organizational meeting is the first Board Meeting of your corporation! But actually, it's generally not a meeting. There's a lot to cover as you kickoff so it's often easier to execute a document known as the Action in Lieu of Organizational Meeting so nothing is missed.

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Don't Worry, You Don't Owe Delaware $75,000 in Franchise Taxes

There are two methods of calculating the Delaware franchise tax, and the bill you get in the mail defaults to the method that is far more expensive.

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What's The Inventions Assignment

An Invention Assignment is an agreement where a founder or developer assigns intellectual property created pre-incorporation over to the startup.

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How to Run a Board Meeting After Funding

After you’ve celebrated your first successful funding round, you’ll likely have a moment of discomfort thinking about having an investor on your board of directors. What do you, as CEO, now need to do? Are there best practices to follow? Of course, there are! Here's our recommendations.

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Non-Disclosure Agreements

A non-disclosure agreement (NDA) is an agreement where a third-party agrees to protect your confidential information from disclosure to other parties. Anyone working with you should sign one. It is not common practice for investors to be presented with an NDA.

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Seven Documents Every Startup Should Have From The Start

When launching a startup, you want to make and keep your startup as valuable as possible. In order to do that, you must ensure that the intellectual property is owned by the startup, and founders who own the startup have proper incentives and rules to handle inevitable contingencies.

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What Is Convertible Equity

Convertible equity is similar to a convertible note, but convertible equity is not debt. Like convertible debt, convertible equity usually has the terms of a price cap and a discount, but there’s no interest or maturity date. The most common form of convertible equity is the “SAFE”.

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What Is Convertible Debt

Convertible debt is a type of security frequently issued by startups when raising capital in their seed round. The debt converts to equity at the Series A round, where the seed investors receive equity at a discounted rate.

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Can I Vote If My Shares Haven't Vested

Yes, shares, whether vested or unvested, come with all associated voting rights.  On the day shares are issued, you own every single share of stock that you have purchased or been granted, even if you subject the entire amount to the typical 4-year with a one-year cliff vesting schedule.

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What Are Bylaws

Bylaws are the rules you establish to run your company. Generally, they include: the number of directors on the board, the required notice for stockholder and board meetings, the quorum for stockholder and board meetings, the required voting thresholds for lawful stockholder or board actions, types of officers and their roles . . .

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Invention Agreements At Your Day Job

Many founders work a day job during the initial stages of their startup. It's a common way to pay the bills prior to funding.  However, precautions must be taken to ensure the company you work for doesn't wind up owning your startup's intellectual property.

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Authorizing Stock and Setting Par Value

Par value is the minimum price that a corporation can issue its shares for. The concept originated in the great depression. Startups should keep their par value low so that founders don't have to invest a significant amount of cash to gain equity in their company; and to keep their Delaware franchise tax bill low.

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83(b) Elections

An 83(b) election is a letter you send to the IRS letting them know you’d like to be taxed on your equity in a company on the date the equity was *granted* to you rather than on the date the equity *vests*.

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What Is Preferred Stock

Preferred stock is most commonly issued when a startup receives VC funding. Preferred stock provides certain economic and control rights and protections not given to the holders of common stock.

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What Is An Option Pool

An option pool is an amount of a startup’s common stock reserved to issue in the future to employees, directors, advisors, and consultants.

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Buy/Sell Agreements

A buy-sell agreement, also known as a buyout agreement, sets forth what will happen if one of the co-owners of a company leaves the company for any reason, including death. There are two main types of buy-sell agreements: the cross-purchase plan and the stock redemption plan. We generally recommend a stock redemption plan.

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What Is the Liquidation Preference

If you sell or merge your company with another, the 'liquidation preference' is the term used for the amount of money that must be paid to preferred stockholders before distributions may be made to common stockholders.

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