At last month’s Northwestern Entrepreneurship Conference, Groupon CEO Andrew Mason was a featured speaker. Mason, as many now know, was a music major at Northwestern. Peter Barris of NEA (one of Groupon’s major investors), who shared the stage with Mason, noted that musical talent seemed prevalent (in his experience) in technology entrepreneurs. This observation came […]
Lawyers, like everyone else working for a business, need to add value. I see so much legal work, however, that adds no value whatsoever. The economics term for it is “deadweight loss.” The client might as well just take out a few hundred-dollar bills and burn them. This blog post is the first of what […]
In developing a streamlined, cost-effective set of legal formation documents for startups (organizational, not funding documents), I have been giving a lot of thought to the essential areas that entrepreneurs/new companies need to cover. It’s not a huge universe. Here’s what I have come up with: Ownership split (if more than one founder) and vesting. […]
In my last post, I made a comment about startups not needing 45-page LLC agreements. I guess there’s even worse being perpetrated out there. A friend, who also represents startups, reports the following: Apropos of your point, I am in the process of negotiating a 2-member, early stage operating agreement which spans 70 pages What […]
I love Fred Wilson’s blog. Sure, he’s a smart VC, but he also writes well and believes in sharing his knowledge. I always learn something from his posts. A little more than a year ago, Fred issued a challenge to startup lawyers: to keep legal fees down for startup investment transactions. Way down. In his […]
Here’s a lawyer secret: we recycle our documents. Over and over and over. We even have a fancy word for it – “precedent.” For the most part, the use of precedent is efficient and benefits the client. Few would want to pay for their agreements to be drafted from scratch, when a document from a […]
UPDATED: The JOBS Act passed Congress and was signed into law by President Obama. Final bill text here. I’ve previously posted (here and here) about the crowdfunding measures that have been working their way through Congress. The House has now passed the JOBS Act (text here, for the truly wonky), which contains these measures, and […]
A great many founders that come to me for representation want to split ownership 50-50 with their co-founders. I’ve been thinking about 50-50 issues a lot lately. These situations present interesting challenges for the attorney, in terms of how to construct reasonable, practical mechanisms for dealing with disputes that can take place between the founders, […]
Here’s something that I’ve heard a lot over the years: “Most jobs are created by small businesses.” As a founder of a small business, who now represents them in my law practice, I’d like to believe that this is true. When I hear the same thing over and over again, though, I wonder. And then […]
In my last post, I reviewed the “crowdfunding” legislation that’s before Congress. Since that legislation may be stalled, I’d outline how a company might orchestrate a crowdfunding round in the absence of legislation. For this discussion, a general familiarity with the laws and regulations governing private offerings is helpful. (You can read goodcounsel’s GoodGuide here.) […]