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Don’t Panic! Your pre-revenue startup doesn’t owe $85,165 in Delaware Franchise Taxes

It’s Delaware Franchise Tax Season! If you’re incorporated in Delaware and you’re staring at a terrifying notice with the number $85,165.00 on it, don’t panic. It’s very likely that your startup only owes $400. Read on for details on how to refigure your bill, easily file your report, and reduce your stress in future years.
Peter Swan
Peter Swan , CEO , Gust INC
14 Feb 2024

Startup Strategies: The Strategic and Financial Significance of Intellectual Property

Startups are often at the forefront of innovation, developing new technologies, products, and services that disrupt traditional industries and bring fresh ideas and approaches that drive technological advancements. In that regard, startups often rely heavily on their ideas, and the unauthorized replication of those ideas may result in a loss of control over the unique aspects of a startup’s offerings. A collection of studies spanning over 20 years of data published earlier this year by the European Patent Office (EPO) and European Union Intellectual Property Office (EUIPO), (Report), examined the role of intellectual property rights in a startup’s success.
Moses & Singer LLP
Stephanie M Smith & Milton Springut , PARTNERS , Moses & Singer LLP
1 Feb 2024

Using Copyrighted Works in AI Training Data May Infringe Even if the AI Output Doesn’t

Thomson Reuters Enterprise Centre GmbH v. Ross Intelligence Inc., decided in the federal District Court in Delaware on September 25, 2023, asks the question whether a company can train its AI on a competitor’s copyrighted works in order to help it compete? What if the AI output does not infringe the competitor’s copyrights? The answer so far is “maybe,” but that the answer is not “no” adds to the hazards of using copyrighted works as training data. Thomson Reuters v. Ross is a trial court decision denying summary judgment on the points at issue, and is therefore not a definitive declaration of law. However, by denying summary judgment on copyright infringement to the AI builder and user, the decision opens the door to the kind of lengthy, expensive and uncertain litigation that could deter builders and users of AI from using copyrighted works as training data.
Moses & Singer LLP
David Rabinowitz & Milton Springut , PARTNERS , Moses & Singer LLP
17 Jan 2024

Why Every Angel Needs to Invest in at Least 20 Companies

When people hear about the 25 percent annualized rate of return that active angel investors obtain, they assume that there must be some secret involved—perhaps an old-boy network of hidden links that connects angels to brilliant entrepreneurs and tech innovators or a mathematical algorithm developed by some genius at MIT that helps angels identify and invest in the businesses that are guaranteed to be the Apples, Googles, and Facebooks of tomorrow. In reality, there are few secrets about the investment world, including the world of startups. But there are some little-known truths that serious startup investors (both angels and venture capitalists) take for granted, and to which most people—including entrepreneurs themselves—are oblivious. These deal with the fundamental nature of the industry, and one needs to completely internalize them if you are going to be successful at investing in startups.
David S. Rose
DAVID S. ROSE , FOUNDER AND CEO , GUST INC.
14 Dec 2023

Survive the Term Sheet Negotiation and Investor Due Diligence Part 2

Over the past 20 years, the typical structure for seed/angel deals has shifted from common stock (in the mid-1990s) to convertible notes (late 1990s through early 2000s) to full Series A convertible preferred (mid-2000s) to convertible notes with a cap (late 2000s) to Series Seed convertible preferred or similar (present). This shows the increasing sophistication of investors and founders, the increasing experience and publicity surrounding the advantages/disadvantages of various options, and the increasing availability of model documents and online generators for different choices.
David S. Rose
DAVID S. ROSE , FOUNDER AND CEO , GUST INC.
28 Nov 2023
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