Jul 112013
 
Changes to Securities Offerings

On July 20, 2013, the Securities and Exchange Commission issued final rule changes to implement the general solicitation/advertising provisions of the Jumpstart Our Business Startups Act (otherwise known as the “JOBS Act”).  These rule changes allow companies to use general advertising in private offerings of stock under Regulation D, subject to certain conditions.  At the same time, the SEC also issued rules to prevent so-called “bad actors” from participating in the most popular type of [...]

Jun 112012
 
A Quiz on Social Media Policies

You probably know that President Obama’s National Labor Relations Board has been somewhat more activist than its predecessors, taking action (since withdrawn) against Boeing for trying to open a plant in union-unfriendly South Carolina and issuing regulations (since enjoined) requiring employers to post notices informing their employees about their rights to organize. As I’ve blogged about before, NLRB’s Acting General Counsel (acting, because the President can’t get the Senate to confirm him) has been busy [...]

Mar 302012
 
Preserving your IP

Here’s a question somebody recently posted to answers.onstartups.com, which should strike fear into the heart of every startup founder: [. . . ] Since I am the lead developer, and since I have never signed anything relinquishing my ownership of the code, if I just left the company would probably fail. Since I don’t wish this upon them, I would like to find afair way to leave.What is the best approach for me to leave without [...]

Mar 122012
 
Getting Ready for Due Diligence

Is your startup ready to take on outside investors?  For many startups, the knee-jerk reaction is often “sure,” but be careful: sophisticated investors will want to take a rather invasive look through your company to make sure that they’re not investing in a dog. Prepare for an uncomfortable inquiry. Before that inquiry happens, it’s well worth the effort to find and fix problems that are going to arise in that Due Diligence review anyway.  Not [...]

Feb 292012
 
Social Media Policies

Thanks to services like Facebook, LinkedIn and Twitter, it’s possible for your employees to reveal harmful, embarrassing or confidential information to the entire world in the blink of an eye. To help mitigate this risk, many companies have adopted “Social Media Policies” to regulate what their employees can do in social media.  But, as a string of recent cases brought by the National Labor Relations Board demonstrate, employers need to be careful about what’s in [...]

Feb 152012
 
Holding off on paying yourself?

It’s a common scenario: a startup is short on cash and doesn’t have enough money to pay its officers. The officers are willing to go without pay for a while, but do want to get paid back when the company is able. So, the board tells the officers “Hey, your salary is $8,000 per month (or whatever), but we don’t have the cash right now, so we’ll pay you later when we get funding.” This used [...]

Feb 132012
 
Getting into Delaware Courts

Congratulations, you’ve formed a Delaware corporation. As I’ve documented elsewhere, you’re probably paying more for a Delaware corporation than you would have if you incorporated in your home state. So, what are doing to make sure you get full benefit of that choice? Recall that many corporations incorporate in Delaware partially because of the Delaware Court of Chancery, which handles matters related to its corporate law. The Court’s judges (called “Chancellors” in Delaware) are well [...]

Jan 182012
 

President Obama and various members of Congress have recently intimated that the Stop Online Piracy Act (SOPA) would not pass until one of its more controversial provisions is removed. That’s all well and good, but SOPA is still an awful bill. SOPA is intended to fight piracy of both copyrighted works (like music and movies) and physical goods (like face Gucci purses) by going after the websites and other internet services that make these goods [...]

Jan 162012
 
That time of the year again

Received an absolutely ginormous Delaware franchise tax bill in the past few weeks? Corporate lawyers all across the country are getting phone calls from anxious clients wondering why their startup company now owes Delaware tens of thousands of dollars — sometimes more than their entire company has in the bank. Take a deep breath — chances are that you don’t owe anywhere close to that much. There are two ways to compute franchise taxes, and [...]

Oct 202011
 
Easy-to-Read Terms of Service?

Why are Internet Terms of Service usually so hard to read? Some lawyers will tell you that they need to be written in precise, lawyerly, language to protect the provider against legal claims from its users. And, it’s probably true that terms written in that very precise language may protect the provider in some cases where terms written in plain English won’t. However, that precision comes at a cost: most people find that very precise [...]