Category Archives

New Exemption for Sales of Restricted Stock

President Obama signed legislation this month that creates a new, explicit exemption for private resales of restricted and control securities. The legislation, contained in Fixing America’s Surface Transportation Act (the FAST Act), will make it easier for the holders of restricted stock to cash out their holdings, provided they sell Read More

Ten Common Startup Mistakes – Part 1

Today seems like a good day to tie together a number of subjects I’ve written about in the past, as a list of the Ten Biggest Legal Mistakes Startups Make. Here are the first five: Number 1 – Choosing the Wrong Form of Entity All too often, I encounter startup Read More

Anatomy of a Term Sheet 8 — Anti-Dilution Protection

Welcome back to our Anatomy of a Term Sheet series. We are taking the model Series A term sheet from the NVCA, and analyzing the various terms in depth. The goal is to give startup founders a solid understanding of the complex provisions of the term sheet. We have had 7 Read More

Startup Checklist

In previous posts, I have provided a lot of information on various aspects of getting a startup company established. I thought it would be useful to put a lot of that information in one post, as a startup checklist. So here we go… 1. Review your employment agreement – before Read More

Splitting the Founders Equity

A question that would-be startup founders often ask is how they should split the equity among themselves. This is an excellent and extremely difficult question, and also one that I cannot answer for them. Ultimately, it is a decision that they are going to have to make, and it raises Read More

The Importance of Vesting

I just came across this article by Rebekah Campbell, on a topic of crucial importance to entrepreneurs — how to divvy up ownership interests in a startup. Campbell is an Australian entrepreneur, and is the founder and CEO of Posse, a mobile social network that connects customers and retailers. In the Read More