StartupPercolator
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StartupPercolator

StartupPercolator offers access to programs, resources, and dynamic content designed to assist entrepreneurs on their startup journey.
road through mountains
September 2, 2012

Delaware Franchise Taxes 101

 Sometimes, about January, I get an urgent call from a founder telling me that his or her corporation has received a franchise tax bill from the State of Delaware for tens of thousands of dollars. View blog post
road through mountains
August 29, 2012

Special Classes of Founders Stock

 The vast majority of technology startups are capitalized in the same manner: common stock to the founders, common stock reserved in an option pool for employees and consultants, and preferred stock (Series A, Series B, etc.) sold to investors. View blog post
Startup - Employees
August 21, 2012

Classifying Employees: Independent Contractors Or Exempt

 If there is a ground zero of potential liability, this is it. Cash-strapped federal regulators and states are focusing on misclassification cases with renewed zeal and enthusiasm. View blog post
Startup - Fundraising
August 15, 2012

Fund GENEROUSLY to Milestones

 Founders often seek advice regarding the amount of capital to be raised. The conventional wisdom is to raise sufficient capital to permit the company to achieve a milestone that will result in a material increase in the company's value. The milestone might be... View blog post
Startup - Employees
July 31, 2012

Post-Employment Noncompetition Obligations Are Generally Unenforceable In California

 For a start-up company, noncompetition agreements typically arise in one of the following contexts; a founder or new employee entered into a confidential information and inventions assignment agreement (or similar agreement) with his or her former employer that prohibits competing with the former employer, the start-up company wants to prohibit a terminated employee from competing with the company, or in an acquisition, the buyer demands a founder and/or key employee sign a noncompetition agreement. View blog post
Startup - Fundraising
July 25, 2012

Valuation: How Much is Your Startup Worth?

 How does a technology startup determine its valuation? Is it an art, a science or a combination of the two? Does a startup's valuation increase if it has a slick pitch deck and a clever company name? Should a startup use a Ouija board to determine its valuation? View blog post
Startup - Fundraising
July 19, 2012

"Your First Vehicle for Fund Raising: Convertible Notes or Preferred Stock?"

 "I think we need about $1,000,000 to $2,000,000 for our first round of funding. Should we use convertible notes or issue preferred stock?" This is one of the most common questions we get from entrepreneurs looking to raise their first round of outside funding. View blog post
Startup - Governance and Risk Management
July 10, 2012

Maintaining Good Corporate Hygiene

 As a founder of a start-up company, you will likely be spending the bulk of your time refining your business plan, pitching your ideas to VCs and looking for talented and experienced employees to fill out your team. Admittedly, in the early days, you probably won't have much time for anything else, including attending to corporate formalities. View blog post
Startup - Equity Compensation
July 5, 2012

83(b) Election Basics

 We find ourselves explaining 83(b) elections several times a week, so we thought it would be a good blog topic. View blog post
road through mountains
June 27, 2012

Take A Step Back To Take A Leap Forward

 The introduction of a disruptive technology leads to the collapse of sales of recorded music. Does this refer to the impact of legal and illegal digital music downloads on CD sales? Certainly. View blog post
road through mountains
June 20, 2012

How to Use an Advisory Board

 Advisory boards are powerful tools used by companies at all stages of development. Advisory boards are generally comprised of business leaders, scientists, professionals or other persons of influence. View blog post
road through mountains
June 13, 2012

Startup Lessons from Bob Dylan

 Entrepreneurs think big, with visions of iconoclastic products and services that transcend markets. To help these lofty goals, entrepreneurs must learn lessons from innovators in other industries. Today, we turn to the freewheelin' Bob Dylan for some unconventional startup advice. View blog post
Startup - Equity Compensation
May 30, 2012

Equity Compensation: Avoid the Most Common Mistakes

 Starting a company has many challenges—the biggest being how to attract top talent when you are cash-strapped. Many companies solve this by offering equity for services. View blog post
road through mountains
May 16, 2012

Back to Basics: Consider the Number of Shares to be Issued When You Form Your Startup

 There is no required minimum or maximum number of shares by law that must be issued to founders or reserved in the equity incentive (stock option) pool in a startup. Of course, what does matter is the percentage of the company each individual stockholding represents. View blog post
road through mountains
May 9, 2012

Changing Roles: From Founding CEO to "Employee"

 Perhaps few times for an emerging growth company present more risk than the transition of a founder/CEO to "employee" status. This often happens later in the startup life cycle, when a company has funding and/or sales traction. View blog post
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