Form A Company

Founder’s Stock – a Legal Fiction

By Michael Bill

In common usage, a founder is an individual who creates or helps create a company, but in legal terms, there is no such thing as a “founder” or “founder’s stock,” only early participants in a company’s organization and ownership of its initial equity capital. Why is this so? Because, for all practical purposes (from a startup’s point of view), there are two types of stock – common stock and preferred stock – and “founders” are just the initial holders of the company’s common stock, usually before any financing, in-licensing, or contribution of assets.

Liability Considerations for Delaware Public Benefit Corporations

By Christina S. Bailey and William S. Perkins

A public benefit corporation (PBC) is a statutorily designated type of corporation in Delaware that melds two concepts that are often seen as opposites: maximizing profit and providing public benefit. This choice of entity presents a compromise for those companies who are committed to operating in a responsible and sustainable manner, while acting as a for-profit entity.

The Form is Always Wrong

By Daniel DeWolf and Samuel Effron

Mintz attorneys are often asked as to why we don’t simply provide “forms” on our website that can be downloaded and used.  After all, a number of law firms let you download term sheets and other forms such as SAFEs. Our simple answer is: THE FORM IS ALWAYS WRONG! Legal forms are merely starting points and most forms are typically only half an inch deep. A successful enterprise truly needs so much more depth than what is provided in a basic form.

Is a Series LLC Right for Your Business?

By Amy Burkhoff

The Series limited liability company (the “Series LLC”) is more nuanced than an ordinary limited liability company, and for the right user, it provides flexibility that will streamline administration better than other alternative entities. Although there are some risks and uncertainties relating to the Series LLC, as discussed further below, the Series LLC is a useful tool to create a series of limited liability companies in a single vehicle, preserving limited liability and reducing the administrative expenses necessary to organize different lines of business or manage different properties.

7 Step Process for Creating a Fundable Startup

In this discussion between Patrick Henry, CEO of QuestFusion, and Jeremy Glaser, partner and co-head of the Emerging Company and Venture Capital practice at Mintz Levin, we discuss the seven step process of creating a fundable startup found in Mr. Henry's book, PLAN COMMIT WIN: 90 Days to Creating a Fundable Startup.

A Balanced Approach to Founder's Equity

Written by Daniel I. DeWolf and Sam 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. 

Your Executive Summary is the Key to Attracting the Attention of Investors

By Jeremy Glaser

You have raised your friends and family/angel round, built out the beta of your product and have a few early paying customers.  Now it is time to raise the money you need to grow from institutional investors.   How do you get their attention when so many companies are in the same boat as you?  Your executive summary – a one to two page teaser – is the crucial document you need to stand out among the noise and get noticed.