Representing Startups: Choice of Entity, Protection of IP, Employment Agreements, Equity Compensation and More

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, May 2, 2017

Recorded event now available

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Program Materials

This CLE webinar will provide corporate counsel with an understanding of the critical issues which must be addressed by a startup prior to commencing business. The panel will discuss how to document the management role, compensation and exit strategy for the founders, the importance of entity type and structure, protection of trade secrets and intellectual property, employment agreements and equity compensation, issues with third-party contractors, and more.

Description

Per the Bureau of Labor Statistics, over 600,000 businesses are created each year in the U.S. Whether started by entrepreneurs or existing companies, each must consider many of the same business and legal issues before conducting business. The roles, equity ownership and compensation of the founders must be clearly defined, and there should usually be an agreement on how equity will be transferred and the business will proceed if one or more of the founders departments from the company.

The startup must immediately position itself to finance its operations, hire employees and contractors, transact business with third parties, and protect its intellectual property and trade secrets. Equity compensation may be a necessary component of hiring key employees, but it must be structured so as not to impair the ability of the company to issue stock or raise capital in the future.

The startup must have an entity structure that limits liability, accommodates future growth, and takes state and federal tax laws into account. It must also have form contracts and procedures in place which enable it sell to and service its customers and it usually must do so for a limited legal budget. All of these tasks require the involvement of corporate counsel.

Listen as our authoritative panel discusses how to document the management roles, equity ownership and compensation for the founders in a startup venture. They will also discuss entity selection, employment and contractor agreements, equity compensation, protection of intellectual property and trade secrets, form contracts necessary for transacting business, and other matters which must be resolved before moving forward with a new business.

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Outline

  1. Selection of business entity—tax, finance and other considerations
  2. Equity structure and compensation of founders and employees
    1. Equity structure options
    2. Equity compensation for founders and future employees
    3. Shareholders Agreements
  3. Employment and service provider issues
    1. Documenting the relationship properly
    2. Employees vs. independent contractor relationships
  4. Protecting IP
    1. Confidentiality/ NDA agreements for employees and contractors
    2. Protecting company IP and branding
  5. Financing business operations
    1. Determining source of capital—debt and equity
    2. Positioning company for raising capital
  6. Form contracts to transact business with customers

Benefits

The panel will review these and other key issues:

  • How should equity ownership, management responsibilities and compensation be documented between the initial founders?
  • When is a trademark, copyright and/or patent needed and how does existing IP get assigned to the new company?
  • What steps should be taken with employees and independent contractors to protect trade secrets?
  • What are the pitfalls to avoid when deciding on equity compensation for employees?
  • How can choice of entity, state of formation, and entity structure impact future capital raising and tax liability?

Faculty

Michael D. Weil
Michael D. Weil

Partner
Orrick Herrington & Sutcliffe

Mr. Weil represents clients in high-stakes employment, trade secrets and employee mobility litigation throughout...  |  Read More

Joshua R. Garber
Joshua R. Garber

Law Offices of Joshua R. Garber

Mr. Garber is dedicated to representing startups, emerging companies, and other businesses. He also routinely...  |  Read More

Mital Makadia, Esq.
Mital Makadia, Esq.

Grellas Shah

Ms. Makadia concentrates her practice on corporate and securities law. She works with companies in a range of areas,...  |  Read More

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