Equity Incentive Plans (aka, Stock Option Plans) are a standard feature in nearly every start-up. Although the basic concept (granting an equity interest to an employee or other service provider) is simple enough, there are a few administrative and legal technicalities that need to be respected. Below is a list of five common mistakes that start-ups make when administering their Equity Incentive Plans.
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.
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.
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.
Jeremy Glaser and Patrick Henry discuss the importance of managing expectations on a board of directors. In addition to no surprises, provide transparency to your board. Under-commit and over-deliver.
Jeremy Glaser and Patrick Henry discuss the importance of managing expectations on a board of directors. A key point is no surprises. Discuss key positives and negatives with board members prior to the board meeting. Use your lead director or board chairman to help you.
Jeremy Glaser and Patrick Henry discuss the key role that the CEO must play on the board of directors to improve decision making and show leadership.
Jeremy Glaser and Patrick Henry discuss the importance of building a strong team of mentors, advisors, and employees to accomplish key goals for your startup. Management matters in the success or failure of a startup. It isn't just about the idea.
Jeremy Glaser and Patrick Henry discuss the fear that some founders have about losing control of their companies to outside investors and the importance of board composition, transparency, and performance.
Jeremy Glaser and Patrick Henry discuss the importance of team dynamics on a board of directors. You must engage board members to get the benefits.
Jeremy Glaser and Patrick Henry discuss the importance of treating board seats as very valuable assets.
Watch Jeremy Glaser discuss how building a team with various skills is a recipe for success.
In the video, Jen Rubin discusses the types and terms of various employment agreements and why they are important both to startup businesses and the entrepreneurs and executives that run them.
By Susan Cohen
Important considerations include the type of incorporation, proof of funding, and the effect on existing operations of the start-up.
By Susan Cohen
The following checklist provides a blueprint for the necessary H1-B steps but should not replace the advice of counsel.
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.
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.
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.