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).
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When Does My Startup Actually Need a Financial Statement Audit? You’re negotiating a new funding round. Everything is progressing well until the investor sends a diligence request asking for audited financial statements. Your finance team has accurate bookkeeping records, but you’ve never completed a financial statement audit. Can you get one done before closing? For
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What Is Economic Substance, and Could It Put My Offshore Holding Company at Risk? You formed a Cayman or British Virgin Islands (BVI) holding company because it seemed like the standard structure for venture-backed startups. The company has a registered office, local filing agent, and corporate records in place. Then someone asks whether the company
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What Is a Subsequent Closing, and What Do I Owe If I Join a Venture Fund Late? You’ve decided to invest in a venture capital fund. As you begin reviewing the subscription documents, you discover the fund already held its first closing several months ago. The fund manager explains that you can still participate, but
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What Due Diligence Should I Run on a Fund Manager Before I Invest as an LP? You’ve reviewed the fund presentation. The investment strategy sounds compelling, the past returns look impressive, and the general partner seems experienced. Now you’re being asked to commit capital to a fund that may last 10 years or longer. Once
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What Does Preferred Stock Actually Give My Investors That Common Stock Doesn’t? You’re raising your first priced funding round. The lead investor sends a term sheet offering to purchase preferred stock. As you review the document, you notice terms like 1x liquidation preference, protective provisions, and anti-dilution rights. They all sound fairly standard. But one
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What Corporate Records Does My Startup Have to Keep to Protect Its Liability Shield? You formed a Delaware C-corporation, opened a business bank account, and assumed your personal assets were now protected. Many founders believe incorporation automatically creates a permanent liability shield. It doesn’t. A corporation provides limited liability only when it is operated as
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The State AI Law Map Changed in 2026. Which Rules Does My Startup Actually Have to Follow? Your startup uses artificial intelligence to power its product. A customer asks questions about your training data, bias testing, and AI governance. At the same time, headlines announce new AI laws in California and Colorado, while the federal
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Should I Give Pro Rata Rights to Every Investor in My Round? Your seed round is coming together. A venture fund is leading the investment, and several angel investors are also participating. As the legal documents are being finalized, each investor asks for pro rata rights. At first, the request seems reasonable. After all, they’re
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How Should My Co-Founders and I Split Equity, and What Happens If We Get It Wrong? You and your co-founder are ready to launch the company. One of you came up with the original idea. The other built the first version of the product. Both of you expect to work full-time on the business. Then
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How Does My Convertible Note Discount Stack With the Valuation Cap? You raised your first funding through a convertible note. The terms looked straightforward. Your investors received a 20% discount and a valuation cap, and everyone agreed to move forward. Now your Series A is approaching. Your lawyer explains that the convertible notes will convert
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How Does a Tax Treaty Change What My Cross-Border Startup Actually Owes? Your startup has just signed its first customer in the United States. The invoice is paid, but the amount that reaches your bank account is much lower than expected. After asking a few questions, you discover that 30% of the payment was withheld
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Do I Have to Register My Startup in Other States to Do Business There? You incorporated your startup in Delaware because that’s where many venture-backed companies begin. Now your business is growing. You hired a remote engineer in Colorado, signed customers in California, and your sales team is expanding into New York. Then your attorney
Do I Have to Register My Startup in Other States to Do Business There? Read More »
Delaware Just Changed the Rules on Insider Deals and Records Requests. What Does It Mean for My Startup? Your startup has raised outside funding, and your board is preparing to approve a transaction involving one of your major investors. Everyone agrees the deal makes business sense. Then someone asks whether the investor should vote on
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Which New State Employment Laws Should My Startup Know About After July 1, 2026? You run a growing startup with a small team. Some employees work remotely. Others are spread across different states. You assume employment law changes mostly affect large companies with dedicated HR departments. Then July 1 arrives, bringing a wave of new
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What Business Licenses and Permits Does My Startup Actually Need? You build software. You don’t manufacture products, run a restaurant, or operate a retail store, so business licenses probably aren’t something you’ve spent much time thinking about. Then you’re preparing for a fundraising round or customer due diligence, and someone asks whether your business has
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What Are the Legal Rules When My Startup Must Lay Off Employees? Your startup has reached a difficult point. Revenue has slowed, fundraising is taking longer than expected, and reducing headcount may be the only way to extend the company’s runway. It feels like an internal business decision. Then your lawyer asks whether the layoffs
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