10 Legal Tips Setting Up Your Start Up in the US
Jul 11, 2015
10 Legal TipsSetting Up Your Start Up in the US
Set Up Your Start Up
setupyourstartup.com
facebook.com/SetUpYourStartUp
PolandGermany
Greece
Chile
UK
● EU & US educational & professional background
● 6 years Silicon Valley experience
● Set up & consulted 40+ startups internationally
About me
1. How to incorporate
Do it online... ...or hire an attorney!
2. Where to incorporate
1CUSTOMERS 2
INVESTORS
3TAXES
3. Which State
Delaware California New York
4. Which Entity
Limited liability protection
BOD
Annual Meetings
Investors’ Preference
Taxation
Corporation
5. Logistics
Business Address Registered agent
Bank Account
Accounting
Logistics
6. Costs in US
Incorporation Maintenance 1st Year
Legal fees $1,500 - $3,000 $500
Filing feesDE Secretary of State
$300 $400
Registered Agent $50-$250 $50-$250
Tax filings 0 $1,000 - $1,500
Bookkeeping 0 $500 - $1,000
6. Costs in the UK
Incorporation Maintenance 1st Year
Legal fees £800 - £1,000 (including VAT registration)
£180
Filing fees £13 £13
Registered Agent 0 £180
Accounting fees 0 £500 - £1,000
Bookkeeping 0 hourly rate
7. IP strategy
Patent Trademark
Copyright
LicensingNDAs
IP strategy
- Independent Contractors
- IP Assignment
- Confidentiality
- Termination
8. Hiring
9. Founders’ Agreements
- Percentages
- IP Assignment
- What happens if a founder leaves
- Non-Compete
10. Common mistakes
- Hiring without Agreements
- Founders’ Disputes
- Complicated Structures
- Overthinking
Investment TermsUS vs UK
Seed Funding
Your attorney... ...the investor’s attorney
Who is going to do the work
Terms you are negotiating
Liquidation preference
Company valuation
Board seat
Option pool
Terms
Convertible notes
- It is a loan (sort of)
- No valuation
- Speed, simplicity & cost
Convertible notes at a glance
Take his money back Convert into shares
Investor’s optionInvestor’s option
Equity Financing
- Valuation
- Preferred stock
- Expensive - due diligence
- Vesting / option pool
Convertible Note
- No valuation
- Less complicated & cheaper
- Debt
Equity vs Convertible Note
US
- Higher valuations
- Less veto rights
- No Drag Along
- No vesting in Term Sheet
UK
- Lower valuations
- More veto rights
- Drag Along is common
- Founders’ vesting
- SEIS
US vs UK
Thank you
Let’s connect
linkedin.com/in/tsakona
facebook.com/ctsakona
twitter.com/ctsakona
US EU