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 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 [...]

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 [...]