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Show HN: U.S. Legal Concepts for Founders – Online Handbook

handbook.clerky.com

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Re: Show HN: U.S. Legal Concepts for Founders – Online Handbook

#21

Post by arikr »

swampthing wrote: post #16
arikr wrote: post #14

Earlier quoted context omitted.

Noted! Thanks. Additional question added with an edit: If someone wants to start a company with the goal of never going public (i.e. Bill Gates has talked about regretting going public and only did so because they needed better liquidity for employee options and I believe they were coming close to the shareholder cap) -- what should someone be thinking about nice and early? 2nd additional question: I've heard of uniq…

Ah sorry, I wrote my first answer before seeing your edits. I'll just number my responses here for convenience. 2. It shouldn't change much early on... it would probably be premature optimization to think about it early on, to be honest. The shareholder limits can lead a company to go public, but I think the laws have changed since Microsoft's time to make this less of an issue. Of course, you still have the issue of…

Thank you so much. Really appreciate you taking the time and giving direct answers.

Will share the guide wherever relevant, I think it's an awesome initiative and I hope it pays for itself in leads.

Re: Show HN: U.S. Legal Concepts for Founders – Online Handbook

#22

Post by [deleted] »

swampthing wrote: post #2

Hi everyone! I'm one of the cofounders of Clerky :) We've gotten a ton of questions from founders over the years - this handbook is what we always wished existed, so that we could point people to it. There are already a lot of great blog posts by attorneys out there, but we thought it was also important to have something that (1) helps founders build a solid foundation of knowledge rather than piecemeal, (2) covers t…

[deleted]

Re: Show HN: U.S. Legal Concepts for Founders – Online Handbook

#23

Post by nostrademons »

swampthing wrote: post #2

Hi everyone! I'm one of the cofounders of Clerky :) We've gotten a ton of questions from founders over the years - this handbook is what we always wished existed, so that we could point people to it. There are already a lot of great blog posts by attorneys out there, but we thought it was also important to have something that (1) helps founders build a solid foundation of knowledge rather than piecemeal, (2) covers t…

1. How do you handle assets (in particular IP) transferred into the corporation at formation time - if, for example, the founders have been working on it as a project beforehand?

2. How difficult is it to add a co-founder after formation but before investment? Does this require a lawyer, or are there standard forms that can be filled out? How does founder stock get re-apportioned, or must new stock be re-issued?

3. How about swapping stock plans? The chapter of the handbook suggests it's possible - is it a "talk to a lawyer, and they will file some paperwork" situation? If, for example, a startup wished to adopt progressive equity [1] but hadn't thought about it until they were ready to hire employees, would it be complicated and expensive?

4. What are the day-to-day responsibilities of a founder regarding the corporation after it's been formed? I've heard of (at a minimum) paying taxes, conducting board meetings, and ensuring that company expenses and personal expenses are separate? Others? Are there particular records that startup founders must keep, and particular duties they must perform over the course of the year, once they've incorporated?

[1] https://medium.com/detour-dot-com/introducing-progressive-eq...

Re: Show HN: U.S. Legal Concepts for Founders – Online Handbook

#24

Post by swampthing »

nostrademons wrote: post #23
swampthing wrote: post #2

Hi everyone! I'm one of the cofounders of Clerky :) We've gotten a ton of questions from founders over the years - this handbook is what we always wished existed, so that we could point people to it. There are already a lot of great blog posts by attorneys out there, but we thought it was also important to have something that (1) helps founders build a solid foundation of knowledge rather than piecemeal, (2) covers t…

1. How do you handle assets (in particular IP) transferred into the corporation at formation time - if, for example, the founders have been working on it as a project beforehand? 2. How difficult is it to add a co-founder after formation but before investment? Does this require a lawyer, or are there standard forms that can be filled out? How does founder stock get re-apportioned, or must new stock be re-issued? 3. H…

1. That's routinely transferred over in the restricted stock purchase agreement, or else in a separate technology assignment agreement. Just depends on the preference of the lawyer. But yes, this is absolutely crucial as part of the formation process.

2. It's almost always easier to just issue new stock rather than re-distribute whatever shares were already issued. It's not difficult to add a new co-founder at all, fortunately :) Any startup lawyer can help you with this, or else we have templates for it on Clerky too. Note that if you don't have enough shares available for issuance in the corporation, you'll typically want to file an amendment to your certificate of incorporation in order to authorize more.

3. I don't know about progressive equity in particular, but in general, it's not too difficult to adopt a new stock plan as long as there are standardized forms for it. You can have old and new stock plans co-existing next to each other. That said, for something new like progressive equity, your lawyers might want to review everything to make sure it all works - that would add to the cost.

4. That all sounds about right. Delaware will require you to submit an annual report (just basic details about your corporation - doesn't take long). Early on, there's usually no need to have a lot of formality around board meetings. You'll need to pay your registered agent fees every year too. Different states and localities might have their own requirements - in some cities, you have to get a business license, for example. In terms of records, I would recommend just keeping all your legal paperwork as a matter of course.

Re: Show HN: U.S. Legal Concepts for Founders – Online Handbook

#25

Post by swampthing »

arikr wrote: post #21
swampthing wrote: post #16

Earlier quoted context omitted.

Ah sorry, I wrote my first answer before seeing your edits. I'll just number my responses here for convenience. 2. It shouldn't change much early on... it would probably be premature optimization to think about it early on, to be honest. The shareholder limits can lead a company to go public, but I think the laws have changed since Microsoft's time to make this less of an issue. Of course, you still have the issue of…

Thank you so much. Really appreciate you taking the time and giving direct answers. Will share the guide wherever relevant, I think it's an awesome initiative and I hope it pays for itself in leads.

Glad to help! The handbook will pay for itself just as a support resource for us :)

Re: Show HN: U.S. Legal Concepts for Founders – Online Handbook

#26

Post by swampthing »

grellas wrote: post #20

A few thoughts on the Handbook: 1. Law can be a morass and who then can you rely on when trying to understand it via online resources? Well, for startup legal issues, the answer now is the Clerky Handbook: thoroughly and carefully vetted by those who have lived and breathed this stuff for decades while working in the trenches with founders of all stripes. If you want reliability, you can’t ask for better. 2. The Hand…

Thanks for the kind words George - and thanks for being an editor :) I completely agree with you on the scope limitations - we're looking forward to pushing the boundaries out a bit more over time with additional articles.

Re: Show HN: U.S. Legal Concepts for Founders – Online Handbook

#27

Post by patio11 »

mrkurt wrote: post #13
thomasdub wrote: post #11

Earlier quoted context omitted.

Curious - what's a disaster about Stripe Atlas? I would have considered going down that route if I was to start a company

Well, they screwed up filing docs for a friend of mine, we haven't gotten an EIN after a month, and the bank account with SVB is really limited (SVB won't do a credit card for those accounts, for example). I used them primarily to get the bank account with minimal fuss and now I'm regretting it. :)

Would you mind sending me an email (my HN username @stripe.com)? I work on Atlas and I'd be happy to look into what went wrong and what we can do to fix things.
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