mefi july 9 startup legal and ip - colmenares.pdf

7/28/2019 MEFI July 9 Startup Legal and IP - Colmenares.pdf

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10 Questions Founders shouldask their law rm. !

And possible answers. !

Alan Colmenares

Medellin 2013


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the best time to start meeting and getting to know lawyersis long before you ever start your company.

Mark Suster, Both Sides of the Table


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Since were mentioning Mark Susterhere in Medellin


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He grew up inColombia !In Medellin , actuallyI grew up withPlatanos and Arepasas well as tongue andbrisket. !

Mark Suster, writing abouthis father (2013).


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First, general thoughts

Best to choose a rm that is known as aleader in working with startups.

Do it right the rst time (SuperTrendiexample). Firm knowledge is important, but chemistry

is also important. Mistakes can be costly.


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Launching the company


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1. Where should I incorporate?


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Possible responses

Colombia Panama Offshore US


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2. What rights should stock holdershave?


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Possible responses

CommonStock

PreferredStock


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Other options?


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Class F !


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3. What other documents do Ineed?


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Possible responses

Incorporation agreeement Employment contract Employee Stock Option Plan (ESOP) Terms and Conditions/Privacy Policy Trademark ling IP Rights Assignment / Vendor Agreement Mutual Non-Disclosure Agreement (NDA)


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4. Should I have advisors sign anagreement?


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5. What tax considerations should Ibe aware of?


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Example 83(b) Election


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Make sure those initial 5 questionsare answered and taken care of rst.


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Now, a small taste of possible TermSheet questions


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7. What are anti-dilution Provisions?


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Pro rata

Full ratchetWeighted average

ConversionPrice


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8. What is Right of FirstRefusal?


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9. What are Drag-Alongrights?


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Majority of common stock or preferred stock?


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10. What is a convertiblenote?


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Beware hidden liquidation preferences andother things.

Cap

Discount


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Resources http://www.startupcompanylawyer.com http://venturehacks.com/

http://www.bothsidesofthetable.com/ 2010/01/21/how-to-work-with-lawyers-at-a-startup/

http://www.wsgr.com/WSGR/Display.aspx?

SectionName=practice/termsheet.htm http://www.docstoc.com/docs/10303638/

FFI-Plain-Preferred-Term-Sheet

mefi july 9 startup legal and ip - colmenares.pdf

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