Early stage startups understandably seek to minimize corporate overhead and devote every penny to customer development, engineering, marketing and so forth. Nevertheless, if you want or need the benefits of a business entity such as a corporation or LLC, there are some unavoidable expenses associated with their “care and feeding.” (Legal expenses are outside the scope of this post; my “manifesto” on the subject can be found at Quora.)
OK, the Most Interesting Man’s isn’t a lawyer, and his view is a bit simplistic. But he does have a point: in many cases, provisional patent applications can provide useful and inexpensive (if short term) protection for your brilliant new idea. Read more
It’s that time of year again: Tax season. In addition to the headache of personal income taxes, entrepreneurs have to deal with business taxes. Around this time each year, as sure as the sunrise, I get calls and messages from irate founders of new startups who received franchise tax bills from the State of Delaware for an insane amount like $75,000. Why on earth would startup lawyers like me recommend that new companies incorporate in Delaware if they’re going to get fleeced by the tax collector? Read more
I’ve gotten on my soapbox before about the importance of forming a business entity as soon as there’s a new product or business worth protecting. The most common messes encountered in my startup law practice involve founding teams that somehow never got the formation done right, including the contributions and assignments of intellectual property to the new company and the related issuances of stock to founders and other contributors. As they say, an ounce of prevention is worth a pound of cure, so let’s drill down and look at the places where things can go right or wrong. Read more
Being an entrepreneur these days requires an understanding of a thousand topics, many of which don’t even exist today in traditional learning vehicles, like schools and textbooks. The Internet and its information wave have changed everything – it’s the problem with constant change, and it’s the solution, if you use it to navigate quickly and self-educate. Read more
Here’s an interesting question. It came up Tuesday night in an angel investment meeting:
My question is which looks better to investors: A higher burn rate with three great people on the business plan, or a lower burn rate with only two great people on the business plan? Two of the three want salary, not equity, and one of those two has a skill set that we need later, in growth phases, and not so much right now, in development phase. Also important to mention; we have three amazing advisors on the plan to beef it up as well.
Every organization, no matter how small, has one or more people who are quite simply obnoxious, and they drain energy from everyone and can strangle your company. Sometimes they are also intellectually brilliant, or closely related to the boss, so there is no easy way out.
In fact, they may even be the boss. So if you find this article taped to your desk, it may be time to look in the mirror. At any rate, if you are stuck working in an office, at least you deserve some clues on how to recognize the different types, and know it’s time to run: