Essay legalandaccounting 141121023314 convers

Submitted By Creative2015
Words: 317
Pages: 2

Legal & Accounting
Basics for Startups

Carolynn

Kirsty

Levy

Nathoo

What kind of entity?


Delaware Corporation



Keep it Simple

FORMATION

Be Organized


Future due diligence requirements



Humdrum reality of running a startup

FORMATION

EQUITY

Allocation
Purchasing
Vesting

Allocation


Execution > Idea

(ideas = 0)



How much equity for each founder?



Look forward, not backwards.

EQUITY

Purchasing


Paperwork Alert!



2-Sided Transactions

EQUITY

Vesting


Vesting is earning the right to permanent ownership of the shares over time.

EQUITY

Vesting


Standard vesting = 4 years w/ 1 year cliff



If founder leaves, company can repurchase unvested shares.

EQUITY

Vesting


Why have vesting?



Single founders should have it too.

EQUITY

FUNDRAISING

Logistics
Investor Requests
Company Expenses

Logistics


Priced vs. Non-priced Rounds



Paperwork Alert!



Potential Dilution

FUNDRAISING

Investor Requests


Board seat



Pro rata rights



Advisors



Information rights

FUNDRAISING

Company Expenses


What is a business expense?



Keeping track of expenses.

FUNDRAISING

DOING BUSINESS

Founder Employment
Hiring & Firing
Legitimacy

Founder Employment


Founders are employees of the company and must be paid wages / salary.



Founder Breakups

DOING BUSINESS

Hiring Employees


Paperwork alert!



Consultant vs. Employee



Equity for Employees

DOING BUSINESS

Firing Employees


Fire quickly.



Communicate effectively.



Pay wages / salary up to point 
 of termination.

DOING BUSINESS

Firing Employees


Eliminate access.



Repurchase unvested stock.

DOING BUSINESS

Legitimacy


Know your