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Dan Wright and Joe Wallin If you are going to raise money through a crowdfunding campaign, you need to think through the tax consequences before you start. You might have to collect sales taxes. You might also have to pay federal income taxes on the funds you raise, in the
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Stock option plan administration requires regular attention to compliance obligations. Events to Watch Out For There is work to do when: * the board of directors approves stock option grants (or stock awards), which can occur either at regularly scheduled board meetings or at any time at special board meetings or
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It is well known that a company has to withhold income and employment taxes from an employee exercising nonqualified stock options. What About Former Employees? What is less well known is, what do you do if this person has left the employment of the company? What if they left employment
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By Nikki Piplani and Joe Wallin If you are a startup company founder, one of the first questions you will have will be about sharing equity with your early hires. Once you start asking, you will hear plenty of advice about this. You will hear— “Be generous”. You will also
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In startup land, aside from cash compensation, stock options are the most important part of employee compensation. (This is the case because once a startup is beyond the very early, initial startup phase, no other form of equity compensation--such as restricted stock or RSUs--works very well from a tax point
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If you are not familiar, last December the Congress and the President made permanent one of the most significant tax breaks probably ever made available to founders and investors in startups. They created something that they could have rightfully called, "Tax Free Startup Company Stock." What am I
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By Ashley Long If you are a startup company, your brand (your trademarks) may be one of your most important items of intellectual property. Protecting your brand through one or more federally registered trademarks is usually a really smart move. For not very much money, you can obtain federal rights
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By Dennis Kasimov and Joe Wallin In the early days of a startup, it is common for founders to not pay themselves any cash compensation. This approach is sometimes also applied to other service providers, who receive just stock option compensation. Despite the prevalence of this practice in the early
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If you are thinking about starting an early stage tech company, one of the first things you will have to figure out is what type of legal entity to form. Fortunately, there are only a few choices available to you. Your choices are basically only 1 of the following 3
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If you are investing in early stage companies, there are certain deal terms you want. Most you probably know already: if it's a round of convertible notes, you want a discount and a cap; if it's a priced round, you want a liquidation preference. Etc. But
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What is Revenue Based Financing? For the most part, early stage company financings fall into two categories: 1. Fixed price financings (e.g., a Series Seed or a Series A Preferred Stock financing); and 2. Non-fixed price financings (e.g., convertible notes, or convertible equity). Fixed price rounds are great
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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