Venture capital is a critical source of capital for any new startup. However, venture capital does not need to come with overly draconian conditions. Venture capital may be contingent on the funders receiving Board seats, and funding is typically offered in exchange for equity. But just how much equity should…
Both employees and employers need to understand how stock options work. Employers who issue stock options without understanding them can lose significant value or control of their businesses. Employees who do not understand their stock options could miss out on a significant part of the compensation they are owed for…
The Board of Directors is a critical factor in the success – or failure – of any new startup company. Entrepreneurs must therefore be strategic about if and when they give Board seats to investors. Entrepreneurs must also be cautious of the total number of seats that are given away.…
A private placement memorandum (PPM) is used to offer security in a private company to specific groups of qualified investors. It is used as a marketing tool to provide information and generate interest, but it also serves to meet the requirements of SEC regulations. It is therefore important to be…
Convertible notes are a popular method used by startup companies to raise capital for a new business. There are, however, different types of convertible notes, and it is important for new business owners to understand the pros and cons of each. It is also critical that business owners understand the…
Shareholders have important legal rights under California law. These rights protect a shareholder’s ability to make informed financial decisions about their ownership rights in a company. If you do not understand these legal rights, a company can try to get around them and benefit itself at the expense of its…
It is never easy to break into the competitive world of technology. Now, in the midst of a once-in-a-lifetime global pandemic, new businesses face more challenges than ever. The good news is that there are still funding programs available to small business owners and startup companies in California. What is…
Here in Los Angeles, there are myriad opportunities for creative entrepreneurs – but it is important to protect your and your business’s legal rights before you begin operations. Doing so will allow you to get through the difficult initial startup stages of a business free from legal disputes over equity,…
In recent years, it has become more and more common for technology and other startups to attract and compensate their employees through grants of stock and stock options. In Silicon Valley, stock options have become an expected element of compensation. For startups competing with more established companies for talent, stock…
Launching a startup is an exciting time for entrepreneurs. There are many people involved in many processes that could make or break your business. During this time, your intellectual property (IP) can be exposed to many different people and businesses. It is important to protect it from theft and unlicensed…