Startup Professionals Musings

NOVEMBER 28, 2012

I’ve been advising and mentoring startups and growth companies for years, and find myself always pushing them to try something new, for the sake of growth and survival. Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share.

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Entrepreneur Intellectual Property LLC Burn Rate 274

Startup Professionals Musings

APRIL 19, 2010

Although every startup is unique, there are certain common avoidable mistakes that can lead to legal complications which jeopardize the long-term success of the business. This problem can be avoided by incorporating immediately after early discussions, and issuing shares to the founders, with normal vesting and other participation rules.

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Non-Compete Accredited Investor Startup Cofounder 125

Gust

APRIL 11, 2014

Let’s get right down to business: Dilution of founders’ and other early shareholders’ equity in startups is frequently a subject of intense interest and debate. Yet what matters fundamentally is economic dilution : Will adding newly issued shares make existing shares less valuable, and if so, by how much?

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Dilution Equity Pre-Money Valuation Prospectus 162

Gust

NOVEMBER 22, 2022

Throughout the years of developing Gust.com and Gust Launch, we recognized a common pain point in the startup journey. Founders, the passionate entrepreneurs pouring all of their efforts into building their ventures, had questions about how to properly set up their startups. They ask those early questions: What should we be doing?

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Founder Startup Issued Shares Developer 91

YoungUpstarts

FEBRUARY 28, 2020

Additionally, it will be important to consider whether you plan on attracting investment capital through the distribution of stock, because only certain types of businesses can issue shares of ownership. The S-corporation is a popular choice for solo business owners. Limited Liability Company (LLC).

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LLC Intellectual Property Limited Liability Company Distribution 182

Scott Edward Walker

APRIL 9, 2012

Venture capital funds, seed funds, super angels, angel groups, incubators, and “friends and family” are all playing the seed financing game and investing early in startups in an attempt to land the next Facebook. Why Can’t a Startup Issue Shares of Common Stock to Investors?

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Preferred Stock Finance Common Stock Liquidation Preference 87

Ben's Blog

JANUARY 26, 2021

Now OpenAI has unveiled Dall-E , which processes language to create new images (not new text, as GPT-3 does).

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Artificial Inteligence SEC Issued Shares IPO 36

The Startup Lawyer

JANUARY 26, 2010

Now if your startup received a $5MM Series A investment from a venture capital firm, how many developers (that you can recall) would come out of the shadows of the internet and claim to be your startup’s long lost founder? The answer to this question depends on how well your startup secures its intellectual property.

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IP Intellectual Property Founder Stock Options 57

Scott Edward Walker

SEPTEMBER 21, 2011

A sophisticated angel investor understands how the startup game is played and the role that he plays. Tips #3: Unless You’re Raising $750,000 or More, Issue Convertible Notes. Finally, unless the startup is raising at least approximately $750,000, it generally is not in the company’s interest to issue shares of preferred stock.

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Preferred Stock Angel Investor Entrepreneur Common Stock 45

Scott Edward Walker

MAY 15, 2012

This part will address certain tricky issues. What Happens If a Startup is Acquired Prior to the Note’s Conversion to Shares of Preferred Stock? The first approach is the most founder-friendly, and it is a provision that merely requires the startup to pay-off the loan, plus interest.

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Finance Founder Accredited Investor Preferred Stock 64

Scott Edward Walker

APRIL 22, 2012

Part 3 will cover certain special issues, such as (i) what happens if the startup is acquired prior to the note’s conversion to equity? Specifically, a cap is a ceiling on the value of the startup (i.e., and (ii) what happens if the maturity date is reached prior to the note’s conversion to equity?

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Pre-Money Valuation Finance Liquidation Preference Founder 72

www.mattbartus.com

DECEMBER 9, 2012

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. Prior to the VC’s exercise of the warrants, the founders will actually own 67% of the issued shares because the warrant shares are not outstanding until the warrants are exercised.

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Warrant Valuation Pre-Money Valuation Term Sheet 40

The Next Web

JULY 28, 2013

. Just because you have a great idea doesn’t mean your startup will succeed, and there’s a simple reason for this: concepts don’t make companies. Startups depend on everything from the capabilities of their founders to the depth of their pockets. Group Photo Sharing. We’ll see if that happens. Location-based Social Networks.

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Social Network Startup eCommerce Issued Shares 159