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The 90-day post termination of employment exercise period for stock options is under attack. A lot of companies are moving away from 90 days. You can find a list of them in a GitHub repo maintained by Zach Holman. Zach also has written an impassioned post about this issue. Why
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The staff of the SEC has issued its report on the definition of "accredited investor." It could be what we are looking at is the following: a "super accredited investor" definition (credit to Bill Carleton for coining this term), and the current definition--but if you don&
Startup
Guest Post by the Team at 9Mile Labs When we ventured into the startup accelerator business over three years ago, we knew we were headed into brand new territory. The startup accelerator business model was pioneered in 2005 by Paul Graham at YCombinator (YC) and then subsequently adopted by many
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If you are looking for the complete text of new Section 4(a)(7) of the Securities Act of 1933, as amended, I have quoted it in full below. You can also find the entire text of the Fixing America's Surface Transportation Act or the "FAST Act&
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You may not be aware, but the federal securities laws contain two definitions of the term accredited investor. One definition is helpful to startups, and the other is not. The definition of accredited investor that is helpful to startups is found in Regulation D. Rule 506 of Regulation D is
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The idea that you can "test in" to accredited investor status is gaining momentum. Rep. Schweikert (R-Ariz.) has introduced a bill that would do just that. His bill has passed out of the House Financial Services Committee and is apparently headed to the floor of the House. You
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If you are in the process of awarding stock options to employees or service providers, do not forget that you need (among other things) board approval of all stock option grants. This is required by the corporate law of Delaware, Washington, and I imagine almost every state corporate law in
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The SEC staff has issued its first report on the definition of the term "accredited investor." Dodd-Frank requires the SEC to review and report on the definition of "accredited investor" every four years: to determine whether the definition should be modified or adjusted for the protection
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Now that the qualified small business stock 100% tax exclusion is going to be permanent, one question that will come up more often is: Qualified Small Business Stock Options Do optionees qualify? Meaning, do holders of compensatory stock options, who exercise those options and acquire stock--can they qualify for the
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In the big tax bill the Congress just passed, Congress made the 100% exclusion for gain on qualified small business stock held for more than five years permanent. You can find the text of the bill at Congress.gov. Qualified Small Business Stock You might remember that the Congress has
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You might be wondering about the status of the 100% tax exclusion for qualified small business stock acquired during certain periods and held for more than five years. Late last year, the Congress extended the 100% tax exclusion for qualified small business stock acquired: after the date of the enactment
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Deferred salary or deferring salaries is an alluring trap in startup land. A company's runway gets shorter. The company wants to extend its runway. It can be tempting for the founders to start "deferring" salary. Maybe some non-founder employees start deferring salary too. Deferred Salary: The