Build Your Team

How to Distribute Equity in Your Start-Up

By Patrick Elahmadie

One of the most difficult decisions entrepreneurs face when planning the growth of their start-up is determining how to distribute equity among the founders, the current (and/or future) management team and other employees and consultants. There is no one-size-fits-all model for determining to whom to give equity and how much to give them: this process requires an in-depth look at a number of factors pertaining to the company, generally, and the recipient of the equity, specifically. 

New York City Bans Salary History Inquiries

By Alexander Song 

In accordance with a new regulation that took effect on October 31st, 2017, New York City employers are now prohibited from inquiring about or relying on salary history during the hiring process. This ban makes it an unlawful discriminatory practice for an employer, employment agency, or employee or agent of the employer to: (1) inquire about the salary history of an applicant; or (2) rely on salary history of an applicant to determine salary, benefits, or other compensation for such applicant during the hiring process. Employers should revise their hiring processes in order to ensure their compliance with the new law as soon as possible.

Are You An Owner Or Employee? The Inflexibility of the Federal Tax Rules To Be Treated As Both.

By Dan Wilcox and Scott Pinarchick

Over the last twenty years or so, the limited liability company (“LLC”) has become a popular entity choice as a business entity.  An LLC offers a great deal of flexibility in how it is structured and operates, including the ability for its owners to decide to be classified as a partnership, S corporation, C corporation or, if there is only one owner, to be disregarded as an entity for federal income tax purposes.  Notwithstanding the great deal of flexibility afforded to LLCs, the federal tax rules do not permit a person to be treated as both an owner and an employee of a LLC that is treated as a partnership or a disregarded entity.  As a result, owners of these types LLCs who are employees of the LLC should be aware of how both their salary and income are treated for federal income tax purposes. 

A Balanced Approach to Founder's Equity

By Daniel DeWolf and Samuel Effron

When accepting money from outside investors, entrepreneurs are generally asked to give up some degree of control over their start-up, exchanging equity in their company for cash. In an effort to minimize the control they relinquish, upon formation of their company entrepreneurs can grant themselves equity that comes with special rights. 

Why Does a Company Issue Stock Options?

By Daniel DeWolf

One of the critical keys to a successful venture is aligning the interests of the employees and management with the interests of the shareholders/investors. After all, perhaps the greatest asset of a company is its people. Without a competent and motivated workforce, a venture is unlikely to succeed no matter how great an idea or business concept is involved.

Starting a startup as CTO / Head of Product

By Lauren Mosenthal of Gust.com

After less than a year, Glassbreakers is now a team of 10, we have thousands of active users on our free product, we’ve expanded into enterprises with paying customers and raised over a million in seed funding. After a few of my Glassbreaker matches inquired, I started to reflect on what it’s like to build a startup as a CTO / Head of Product. I wanted to share my journey, advice and insights to others who are starting out as product leaders.