11:42 LLCs have an operating agreement, breach each of this by a member is a legal stuff. You want your op Agreement, which you have control over, to be clear about who does what in the LLC. Otherwise the law, which is agnostic to your business, will be the standard by which disputes will be resolved.
11:37 Question about when to convert from LLC: a good investor will demand an S-Corp at the appropriate time, so don’t convert until there’s outside pressure to.
11:35 Define who owns intellectual property, make sure it’s assigned to the business.
11:33 Issue stock certificates to avoid a founder checking out with ownership they don’t have to work for. Legal strategy must be part of business strategy.
11:30 Governance docs should be clean. Bylaws, stockholder agreements, articles of inc., etc. should be complete, ready, easily located. No excuses.
11.28 Complex cap tables will scare large investors away because there are too many chefs in the kitchen, and a tiny investor can hold up a big one.
11:28 All companies should have a cap table that lists all stockholders and how much each has. KNOW THIS DOCUMENT VERY WELL AND KEEP IT UP TO DATE.
11:24 At the formation of the company, issuance of founder stock is not considered issuance of securities; this ONLY APPLIES AT THE VERY START.
11:21 Don’t get into company valuation fights with investors, especially not early on. Convertible notes and SAFEs can protect you to a degree.
11:19 There are people saying they can get your company capital; they MUST BE ACCREDITED, or forget it.
11:16 Do not advertise or openly solicit investors. You are responsible for knowing whether an individual is accredited. Start with people you know and understand already. Dated simply: know who is investing and meet them personally to verify law-sensitive particulars before accepting them.
11:13 An investor in your business should be accredited, otherwise, non-accredited ones mean more paperwork, more law, more unnecessary exposure.
11:13 A disclosure document must be very up front and honest about your company.
11:11 You must disclose all risks to your investors, if you don’t you can be sued.
11:09 Issuance of securities must by law be registered with the SEC. There is a private offering of $5m or less at state and federal levels that donor need to be.
11:06 If you try a non-compliant first offering, investors can get you for fraud, as can the SEC, and your walking a very thin line.
11:05 Raising the very first dollar triggers fed and state securities laws, so compliance is huge.
Steven Rose’s Reasonably Unreasonable Goals
10:34 Conservative and moderate goals can be the milestones for aggressive future goals. Don’t put all energy into aggressive future goals because then you lose track of what you need to do in the near term.
10:30 An interesting use of the 401k-style conservative-moderate-aggressive investment concept for goal setting.
10:28 The team should see wins when they happen, rewards.
10:30 An interesting use of the 401k-style conservative-moderate-aggressive investment concept for goal setting.
10:28 The team should see wins when they happen, rewards.
10:28 To won, you need a mix of conservative, moderate, and aggressive goals.
10:27 1 in 10 startups succeed.
10:26 People Lise faith if they have best months ever, but still aren’t meeting goals.
10:25 Steven is discussing how the lack of quality in company, team, or individual goals can kill forward momentum in a startup.
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