INSIGHTS
Restricted stock or stock options? What startups should consider for their earliest hires
Choosing between restricted stock and stock options affects ownership, taxes, cap-table control, and what happens when an early hire leaves. Here is what founders should compare.
How a post-money SAFE changes founder ownership before a priced round
A post-money SAFE can make pre-round dilution easier to estimate, but multiple SAFEs, discounts, side letters, option-pool changes, and new financing still affect founder ownership.
What life sciences founders should check before signing a university IP license
Before signing a university IP license, life sciences founders should test ownership, scope, sublicensing, economics, patent control, milestones, government rights, and termination risk.
How founder stock vesting works when a co-founder leaves
What happens to a co-founder’s vested and unvested shares when they leave? This practical guide covers repurchase rights, board approvals, tax timing, and the records a startup should preserve.
How to determine whether an employee is non-exempt (and what that means)
Paying a salary or using a “manager” title does not automatically make an employee exempt from overtime. Here is a practical framework for testing duties, pay, and state-law requirements.
What founders should negotiate in a venture debt term sheet
Venture debt can extend your startup’s runway without immediately raising another equity round. But restrictive terms can limit cash, operations, and future financing. This guide explains what founders should scrutinize before signing a venture debt term sheet.
What startup counsel actually does during a Series A financing
Preparing for a Series A? Learn how startup counsel coordinates diligence, financing documents, approvals, closing, and post-closing compliance.
Before You Incorporate: Make Sure Your Company Name Is Good to Go
Choosing a company name can feel like a branding exercise, but when you are incorporating a new startup, it is also a legal and practical clearance issue. A name that sounds great in a pitch deck may still create problems if it is unavailable, confusingly similar to another business, difficult to protect, or inconsistent with the brand you plan to build.
W-2 Employee vs. 1099 Contractor: A Startup Founder’s Guide to Worker Classification
Hiring help is a major step for any startup. But before you call someone a “contractor” because it feels easier, cheaper, or more flexible, you need to understand the legal difference between a W-2 employee and a 1099 contractor.
That distinction matters. Improper worker classification can lead to tax liability, wage claims, benefits exposure, penalties, and problems during financing or acquisition diligence.
How Startup Board Approvals Actually Work: Voting at Meetings vs Written Consents
There are 2 clean ways a Board of Directors takes action in a Delaware corporation. Both can be valid. Both can be sloppy if you do them casually. And both become very real later when you are fundraising, doing diligence, issuing equity, or selling the company.
What Founders Must Lock In Before Losing Majority Ownership
A preferred round can drop your equity stake below 50 percent even when you negotiate well. If you are reviewing a term sheet that will reduce you to a minority holder, this is the moment to pause and design the structure that will govern the company for years.
How to Calculate Stock Option Grants in a Startup
Stock options are not a direct substitute for cash compensation. So, if you want to avoid common mistakes founders make when evaluating option value and incentivizing employees and contractors with equity compensation, then you need to learn how to structure a fair option grant.
Why Founders Should Be Cautious with Employment Agreement Templates
Employment law is not just complex, it's also highly state-specific. A clause that’s standard in one state may be unenforceable (or even illegal) in another. And mistakes in this area often don’t become apparent until it’s too late, whether in the form of a dispute, a government audit, or a failed diligence process during a funding round.
Why Founders Burn Out (and How to Reconnect with What Matters)
Here are a few practical ways for startup founders to shift out of survival mode and reconnect with themselves (and their companies) from a place of clarity and grounded confidence.
Cumulative vs. Non-Cumulative Dividends in Preferred Stock Fundraising Rounds
Not all dividend provisions are created equal, and the difference between cumulative and non-cumulative dividends can significantly affect how investor economics work at exit.
How to File an 83(b) Election: A Crucial Step for Startup Founders
If you’ve just incorporated your startup and received restricted stock as a founder, congratulations—you’ve taken a major step in building your company. But don’t stop there. One of the most important early tax decisions you’ll make is whether to file an 83(b) election with the IRS. If you don’t, you could face a hefty tax bill down the road.
How to Set an Exercise Price in an Option Grant
If you’re an early-stage startup founder thinking about granting stock options, one of the first terms you’ll need to set is the exercise price—also called the strike price. This is the price at which a recipient can purchase a share of stock when they exercise their option. Sounds simple enough, right? But setting it too low can trigger serious tax consequences, and setting it too high can reduce the incentive value of the options. Here's how to get it right—especially when you’re still pre-revenue or pre-funding and not ready to pay for a formal 409A valuation.
Tax Implications of ISO Exercises: What Startup Founders and Employees Need to Know
Incentive Stock Options (ISOs) are a common form of equity compensation offered to employees of startups and growing companies. For employees, ISOs often represent the potential for significant financial upside. However, the tax implications of exercising ISOs can be complex, particularly when the Alternative Minimum Tax (AMT) comes into play.
How to Pitch to Investors: Five Key Tips for Early-Stage Startup Founders
Securing funding is crucial for early-stage startup founders, and delivering a compelling pitch can make all the difference. In this blog post, we explore five key tips for pitching to investors: make them think with thought-provoking questions, share a personal story to connect on a deeper level, evoke emotions by being raw and vulnerable, present surprising facts to highlight urgency, and maintain honesty by admitting what you don't know. By following these strategies, founders can create a memorable and impactful narrative that resonates with investors and builds lasting relationships.
Milestones Investments in Life Science Startup Fundraising Rounds
Explore the importance of milestones in investment documents for life science startups. Learn how to structure measurable goals that align with business objectives, enhance investor communication, and attract funding opportunities. Understand the significance of clinical, financial, operational, and market entry milestones in preferred stock rounds. Optimize your startup's fundraising strategy with clear, relevant milestones.