One question I seem to be hearing more often from prospective clients lately: “How do I set up a holding company for my startup?” The answer is you don’t. Or, perhaps more precisely, you shouldn’t. A holding company is a company that owns other companies. The classic and most successful example is Berkshire Hathaway, the … Read More
Many people form LLCs or corporations to protect their personal assets. You don’t want to lose your car, your house, or your personal savings because a business venture didn’t work out. Forming an LLC or corporation gives you access to limited liability. But LLCs and corporations must be property run to maintain that limited liability. … Read More
Kickstarter alone has led to almost 3 billion dollars of funding to nearly 120,000 projects. Crowdsourcing has become a viable alternative to traditional funding sources, whether the focus is launching a specific project or building a business. The success stories of crowdsourced funding are as varied as the projects funded. However, the lessons from failed … Read More
There are plenty of savvy startup experts who will tell you that there is absolutely no reason to form your startup as an LLC. You should always be a Delaware C Corporation. If you talk to any of the major accelerators, that’s what they’ll tell you. Same for most VCs. But make no mistake, there … Read More
Could you imagine if someone went to a restaurant and said: “Hey, chef, I was looking on the internet and I found a bunch of recipes I liked. So I cooked a five-course meal, with appetizers, starters, salad, dessert, and the whole shebang. But I’m not sure it tastes all that great so I was … Read More
Conflicts with your business associate(s), particularly for start-ups, can be difficult. Most importantly, you want to address and resolve those conflicts before they interrupt your bottom line—building a successful company and promoting a solid venture. It cannot be said enough: Start-ups and any other business relationships should be grounded in written documentation. If you have … Read More
When you’re a startup lawyer, part of your job is to serve as a document merchant. It’s part of the job, but it’s probably my least favorite part of the job. I love learning from startups. I love working with startups. Working with growing startups to make them better — that’s just what we do. Providing high-quality documents … Read More
This is a question I try to ask all startups that hire me at the very beginning. And while some startups know right away why they’re doing what they’re doing, a few struggle to answer. Having seen hundreds of startups in their birthing stages, I think the answer to this question drives the answers to … Read More
Having to negotiate and formalize a contract is great news for a startup. What it means is, we’re in business! But it also means you’ve come to a place where your choices and actions have real consequences. Make no mistake, one badly constructed contract absolutely has the power to undo every minute of work you’ve … Read More
When I read Startup CEO by Matt Blumberg, it made me think about a question that often comes up when I think about startups. Namely, what is a startup? Matt Blumberg is the CEO of Return Path, a company with more than 400 employees. The majority of CEOs that I work with in early-stage startups … Read More