Category Archives: Startup
Choosing a Legal Structure for Your Startup
One of the first things you’ll do as a founder is choose a legal structure for your business. It’s not glamorous, but it matters — your entity type affects your taxes, your liability exposure, your ability to raise capital, and how much it’ll cost to change your mind later. Here’s how the four main… Read More »
C-Corp vs. S-Corp: Which One Is Right for Your Startup?
Most founders know they want to incorporate. Fewer know which kind of corporation they actually need. The two options — C-Corp and S-Corp — look similar on paper, but they’re built for very different kinds of businesses. The short answer: if you’re raising venture capital, it’s a C-Corp. If you’re running a profitable business… Read More »
The Exception: The LLC-to-Corp Flip
There’s one scenario where starting as an LLC and converting to a C-Corp later isn’t just acceptable — it’s the smart play. But it’s not for everyone, and the math only works under specific conditions. Section 1202 of the tax code gives shareholders in qualified C-Corps a massive benefit: if you hold your stock… Read More »
Raising Capital for Your Startup
Before you build anything, you need money. How you get that money — and what you give up for it — shapes everything that comes after: who controls the company, how much you own at exit, and what your options look like if things don’t go according to plan. There are three basic ways… Read More »
What Is a C-Corp and Why Do Startups Prefer It?
Finn Founder just got back from a meeting with a VC. The VC loved the pitch, wants to invest, and Finn is over the moon. Then the VC asks: “You’re a Delaware C-Corp, right?” Finn is an LLC. This happens more often than you’d think. And it’s fixable — but it’s a lot easier… Read More »
Keep It Secret. Keep It Safe – Trade Secrets 101
Most people know something about its older, more established siblings: the patent and the trademark (and the less heralded stepbrother, the copyright), but what exactly is a trade secret and why does it matter? I. WHAT IS A TRADE SECRET? A trade secret is another form of intellectual property (“IP”) (other key forms of… Read More »
All a Board
Frank Founder: “I just met Sam, a really well respected, seasoned industry expert. She would be a perfect addition to join our new company, Rocket Corp. Can I add her to my board of directors?” Me: “No.” In truth, Frank could add Sam to his board of directors, but it’s probably not what he… Read More »
How Many Shares Do I Have?….Um…
When talking to founders, we regularly uncover confusion about share count: how much has been issued? What was that number they first put in their charter? What’s this “fully diluted” number they read about on a VC blog? As a founder, it is essential to understand your cap table, and that means knowing the… Read More »
10 Legal Mistakes Startups Make
I had an opportunity to speak on a startup panel with some great colleagues about mistakes startups make. Below are the legal missteps I touched on: 1. Overall Approach to Legal – Too Rich Sometimes startups feel most comfortable using a big law firm whose name they recognize or because they have a relative… Read More »