Archive for the ‘Startup Stuff’ Category

Save your employees big bucks using profits interests instead of options

Many goodcounsel clients start off in businesses as limited liability companies, enjoying the flexibility and tax-efficiency that this type of entity offers. A lesser known but quite significant advantage of LLC’s is the ability to provide incentive equity in the form of “profits interests.”

Equity Basics

Some clarification on confusing equity-related terminology Founders often ask us about the meaning of certain equity-related terminology. We thought it would be useful to explain some commonly used (but frequently misunderstood and misused) terms.

Entity type: corporation or LLC?

Founders often come to us before they have formed a legal entity, seeking advice about the type of entity to form –usually it is between the two most common entity types, limited liability companies (LLCs) and corporations. The type of entity will not determine whether the business succeeds or fails. Still, entity selection merits consideration. […]

Making board meetings work for you

Many startup founders don’t really have to sweat board of directors meetings all that much; typically, at the earliest stages, the founders are the only people on the company’s board. If the board meets at all, it’s a “family affair” or otherwise, official actions are handled by written consents outside of meetings. However, once you […]

Can WeWork survive? Should it?

It’s striking to me how the media hypes certain companies to ridiculous heights with fawning, uncritical coverage, only to join in the feeding frenzy of negativity when the same companies inevitably encounter problems. In that respect, I suppose, the media plays a central role in the tech-era bubbles that we’ve lived through over the past […]

Tech veteran Tim O’Reilly criticizes “blitzscaling”

I wanted to share a link to this fantastic article written by veteran technology entrepreneur and thinker Tim O’Reilly on Quartz called “Blitzscaling: The fundamental problem with Silicon Valley’s favorite growth strategy.” The piece insightfully reviews and critiques LinkedIn founder Reid Hoffman’s new book of the same name. More than that, it takes the reader […]

The moose, the entrepreneur, and the local news

This morning I stopped in at a local market to pick up a little breakfast snack. As seems to be the case everywhere these days, I found myself face-to-face with a large screen TV at the checkout counter. (Heaven forbid we should not have a screen at us in every restaurant, elevator, and public space.) […]

How well do angel investments perform?

goodcounsel represents a wide range of startups, many of which have raised capital from angel investors. How do these investments perform? It is difficult for us to generalize from our limited view of the landscape. We don’t have a large enough sample size (or the expertise, to be frank) to make broad judgments. Fortunately, there are organizations who compile […]

Post-termination exercise of stock options: what’s fair to your employees?

In a legal and business career that spans more years than I care to admit, I’ve worn many hats (some of them at the same time): entrepreneur, company founder, early employee, investor, and attorney. Understanding an issue from multiple directions means that, perhaps unusually among lawyers, goodcounsel typically counsels its startup company clients to implement […]

Understanding your stock options is not optional

You’ve landed that dream job and you’re excited to get started. The company is even throwing in some stock options! Since you will be an instrumental part of the company, you might think that the company is poised to take off and those options are going to be super valuable. “Sweet,” you say to yourself. “Where […]