Can I Sell Some of My Own Shares When We Raise Our Next Round? You’ve spent years building your startup. You’ve accepted a modest salary, worked long hours, and reinvested nearly everything back into the business. Now you’re preparing for a successful fundraising round. The valuation looks promising, investor interest is growing, and for the
Can I Sell Some of My Own Shares When We Raise Our Next Round? Read More »
Can I Raise a Friends-and-Family Round on a Handshake, or Am I Quietly Breaking Securities Law? Your uncle wants to invest in your startup. A close friend offers to contribute too. The amounts are modest, everyone trusts each other, and it feels like an informal arrangement. You wonder whether you really need legal documents or
Are My First Hires Employees or 1099 Contractors, and Am I on the Hook If I Get It Wrong? Your startup is growing, and you need help fast. Hiring independent contractors seems like the easiest option. No payroll taxes. No employee benefits. No W-2 paperwork (Just an invoice and a wire). It sounds like a
What Should I Watch for Before Signing My Startup’s First Office Lease? Your startup is growing. The team has outgrown coworking spaces, and it’s finally time to lease your first office. The landlord hands you what they describe as a “standard” commercial lease. The monthly rent looks reasonable, so you’re tempted to sign and move
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What Is an 83(b) Election and What Happens If I Miss the 30-Day Deadline? You incorporated your startup and received founder shares that vest over four years. The paperwork is signed, the company is officially formed, and you’re focused on building the business. Then another founder asks a simple question: “Did you file your 83(b)
What Is an 83(b) Election and What Happens If I Miss the 30-Day Deadline? Read More »
The R&D Tax Rule Changed Again. Can My Startup Deduct Its Engineering Costs Now? Your engineering team is your biggest investment. Every month, you’re paying developers to build new features, improve your product, and solve technical problems. For years, many startups expected those research and development costs to be immediately deductible. Then the tax rules
The R&D Tax Rule Changed Again. Can My Startup Deduct Its Engineering Costs Now? Read More »
The New QSBS Rules Could Make My Startup Sale Tax-Free. Do I Qualify? You’re building your startup with one goal in mind. One day, you’ll raise additional funding, grow the business, and eventually sell your shares. When that exit finally arrives, one question matters more than almost any other. How much of your gain will
The New QSBS Rules Could Make My Startup Sale Tax-Free. Do I Qualify? Read More »
My Startup Is Incorporated Abroad. Should I Flip to a US Parent Before Raising? Your startup has attracted interest from a US venture capital fund. The meetings go well, the product receives positive feedback, and the investor asks for your incorporation documents. Then comes an unexpected response: “We typically invest only in Delaware companies.” Now
My Startup Is Incorporated Abroad. Should I Flip to a US Parent Before Raising? Read More »
How Much Equity Should I Give a Startup Advisor, and What Goes in the Agreement? Your startup is gaining momentum. An experienced founder, industry expert, or well-known executive offers to become an advisor. They promise introductions, strategic guidance, and help with fundraising. In return, they ask for equity. You agree in principle, exchange a few
How Much Equity Should I Give a Startup Advisor, and What Goes in the Agreement? Read More »
How Do Fund Subscription Lines Inflate the IRR I’m Shown as an LP? You’re reviewing two venture funds: One reports a 28% net IRR, while the other reports 23%. The first fund appears to be the obvious choice. Then you discover that it relied heavily on a subscription line of credit before calling capital from
How Do Fund Subscription Lines Inflate the IRR I’m Shown as an LP? Read More »
Does My Startup Own the Code and Designs My Contractors Made? You hired a freelance developer to build your first product. Later, you brought in a designer to create your logo, website, and user interface. You paid every invoice on time, so you naturally assume your startup owns everything they created. Unfortunately, payment alone does
Does My Startup Own the Code and Designs My Contractors Made? Read More »
Do I Have to Collect Sales Tax on My SaaS in States Where I Have Customers? Your SaaS business is growing quickly. Customers are signing up across multiple states, and revenue is increasing every month. Because you sell software online rather than physical products, you assume sales tax probably doesn’t apply. Unfortunately, that assumption can
Do I Have to Collect Sales Tax on My SaaS in States Where I Have Customers? Read More »
Could My Startup Break US Sanctions by Selling or Raising Money Abroad? Your startup has started attracting international opportunities. A customer from another country wants to buy your software, and an overseas investor is interested in joining your next funding round. Everything looks legitimate. The contracts are ready, the money is available, and the business
Could My Startup Break US Sanctions by Selling or Raising Money Abroad? Read More »
As an LP, What Does the Advisory Committee Actually Control in My Fund? You’re reviewing a venture capital fund before making a commitment. The general partner mentions that the fund has an LP Advisory Committee (LPAC), but you are not invited to join. At first, it doesn’t seem important. You assume the committee exists mainly
As an LP, What Does the Advisory Committee Actually Control in My Fund? Read More »
Can My Investors Force My Company to Buy Their Shares Back? You successfully closed your funding round. The investment has been wired, the legal documents are signed, and your team is focused on growing the business. Then someone mentions a redemption right hidden in the preferred stock terms. Suddenly, you’re wondering whether your investors could
Can My Investors Force My Company to Buy Their Shares Back? Read More »
How Big an Option Pool Will Investors Make Me Add Before My Round Closes? Your lead investor sends over a term sheet. The valuation looks exactly as you hoped. Then you notice another provision. Before the financing closes, the investor wants the company to increase its employee option pool. At first, it seems like a
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What Decisions Can My Investors Block With Protective Provisions? Your funding round has closed. You still own a large percentage of the company, your board remains in place, and you’re excited to focus on growth. Then your lawyer reminds you that certain decisions now require investor approval. At first, that sounds surprising. After all, you’re
What Decisions Can My Investors Block With Protective Provisions? Read More »
What Is a Pay-to-Play Provision and What Happens If I Skip the Next Round? Your startup raised a successful seed round. Now market conditions have changed, and your next financing is likely to be more challenging. While reviewing the new term sheet, you notice a provision called pay-to-play. It seems like another technical legal clause.
What Is a Pay-to-Play Provision and What Happens If I Skip the Next Round? Read More »
Why Does My Lead Investor Keep Asking for a Pro Forma Cap Table? Your lead investor has sent over a term sheet. A few hours later, you receive another request: “Can you send us a pro forma cap table?” You already have a capitalization table, so the request seems confusing. Then you remember that the
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When Does My Startup Have to Start Offering Employees Health Benefits Under the ACA? Your startup is growing quickly. You’ve hired several new employees this year, and your team is approaching 50 people. During a payroll meeting, someone mentions that crossing this threshold could trigger new health insurance requirements under the Affordable Care Act (ACA).
When Does My Startup Have to Start Offering Employees Health Benefits Under the ACA? Read More »
