1. STARTUP ESSENTIALS:
Part 1 of 4
Starting Up Your Startup

2. Topics Part 1: Part 2: Startup Formation Startup Financing Part 3:
Choosing an entity
Founder issues
IP issues
Operating Agreement/Shareholder Agreement
Membership distribution
Partnership
Membership Incentive Agreements
Other formation issues
Formation mistakes
Part 2:
Startup Financing
Overview
Typical characteristics
Types of investors
Types of instruments
Seed financing mistakes
Part 3:
Advanced Level Financing
Beyond the Seed rounds VC
Institutional Investors

3. Formations: Choice of Entity/Jurisdiction
“Startup” vs. Small Business
How big do you want to go
Entity Type
C-corporation
S-corporation
LLC
Partnership
Sole Proprietorship
Jurisdiction
Delaware vs. alternatives
Benefit Corporations
Delaware “public benefit corporation”
“B-Corp” certification from B Lab
Formation
Articles of Incorp. For Corps./LLC
Certificate of Limited partnership

4. Formations: Founder Issues
Equity
Roles
Directors
Corporate officers
President, Treasurer,
Operational titles
CEO, CTO, COO, etc.
Operating Agreement/Shareholder’s Agreement
Ownership percentages
Founders’ stock
Par Value
Section 351 & IP
Vesting
Time-based vs. milestone- based
83B elections

5. IP Issues Founders’ Previous Employment
Non-compete agreements/NDAs
Non-solicit agreements
Documenting Company Ownership of IP
Technology assignment agreements
Proprietary information and inventions assignments
Trademark Clearance Patents
Copyrights

6. Formations: Other Issues
Adopting a Stock Plan
Cost & timing considerations
Granting/selling founders’ stock to early employees
Bylaw Transfer Restrictions
Dual Class Structure:
High vote
Low Vote
Foreign Qualifications Tax ID and Bank Account Forms
NDAs, offer letters, consulting and advisor agreements, master
commercial agreements

7. Formations: Biggest Mistakes
Failing to file an 83(b) election within 30 days
Failing to ensure all IP is owned by the company
Putting off conversations among cofounders re: role/equity split
Failing to subject cofounders to vesting
Building the company or product brands around names that infringe on third-party IP
Forgetting to Budget Legal

8. Questions? Adam Yormack
Partner Escalante Yormack Law, PLLC 5201 Blue Lagoon Dr., 200 Miami, FL
Questions?