5 THINGS ABOUT 5 THINGS THAT EVERY STARTUP SHOULD KNOW

STARTUP WEEK EVENT – Presented by SURGE at Fredrikson & Byron

Fast paced overview of key legal topics every entrepreneur should know.

1. Getting started
2. Entity choice matters, sort of.
3. Founder vesting is a must.
4. Don’t forget assignment of IP.
5. Each founder should get what’s fair.
6. Do it right and in writing and don’t make promises you might not want to keep.
7. Raising money
8. It’s illegal to sell stock, units or notes, except when it’s not.
9. No fibs or lies or cover-ups!
10. There are big differences among convertible notes, SAFE, common stock, and preferred stock but in the end the investors almost always get their money back first with subtle or significant variations.
11. You need to understand how shares are valued. Take the time to discuss with lawyer or read-up.
12. Most investor’s rights are fairly benign and standard (although wordy) but be cautious with board seat, protective provisions and liquidation preferences.
13. Building the team
14. You can’t just decide who will be an employee or contractor, and it makes a difference.
15. Don’t forget to get IP assignments!
16. Equity grants should be subject to vesting and no acceleration when possible.
17. Avoid severance, except when you can’t.
18. On termination always get a release, if you can.
19. Protecting your ideas
20. Did I forget to mention, get an IP assignment from everyone.
21. Use open source deliberately.
22. Patent when possible. Yes, you need a good patent lawyer.
23. Use a confidentiality agreement.
24. Registration of copyright and trademark are secondary concerns, except when they’re not – ask your lawyer.
25. Finding the exit
26. Preparing for sale starts at the beginning.
27. Do everything right and in writing and don’t make promises you might not want to keep.
28. You must keep track of ownership, every share, unit, option, and every promise on a napkin.
29. One last time, always get assignment of IP ownership.
30. Engage with strategic investors carefully.