Founders and operators of any growing business inevitably need to review and negotiate contracts with various outside service providers and vendors. Most large and established vendors, such as AWS, Google or Salesforce, have standard boilerplate contracts that are NOT negotiable.  However, for many other vendors, especially those providing custom deliverables or services, it’s important to review and negotiate the Read More

Congratulations, you’ve closed your first Preferred Round Financing!  Closing an investor led, priced round financing is a huge milestone in the life of a startup company, and most founders are relieved to finally complete a financing and get back to focusing on their product or business. While most of the “hard work” of a financing is done after the initial close, it doesn’t mean there aren’t important tasks for the Read More

In this second part of this two-part blog post, we continue to review additional key terms, including founder re-vesting, board seats, legal fees, opinions, no-shops and preferred approval thresholds. 9. Founder Re-Vesting Another investor request that often comes up in financings is founder re-vesting.   Note that in a term sheet, this is often NOT an explicit term, but will simply be a provision or language in the Read More

In the realm of corporate governance, decisions made by a majority vote are the norm. However, certain crucial matters demand a higher level of agreement: unanimous shareholder approval. In this post, we will examine the intricacies and fallout of non-unanimous shareholder approval by exploring the reasons behind it being implemented, the potential implications for corporations, and the options available for Read More

In a prior Inceptiv blog post, we talked about steps a company can take before signing a term sheet. In this two-part blog post, we dive in deeper, and review some key terms that you as a founder/company should focus on when negotiating a private company, preferred stock, priced round financing term sheet.   As previously noted, while most companies are eager to capitalize on the momentum of the deal and want to sign Read More

At the heart of an entrepreneur in the tech industry is someone fueled by innovation and driven to revolutionize industries. Whereas that is the foundation, it must be paired with appropriate legal strategies to secure the necessary startup funding within the tech industry. By appreciating the legal landscape and implementing deliberate tactics, you can enhance your chances of attracting key investors while Read More

Congratulations, you received a term sheet for a financing.  That’s a huge vote of confidence and, likely, represents the culmination of many hours of work by Company management.  After celebrating, what should you do next? Most companies, eager to capitalize on the momentum of the deal, want to sign the term sheet right away and move on to closing the transaction. Although that desire is understandable, once a term Read More

Many founders decide on forming a C-corporation as the legal entity of choice for their company.  When forming a C-corporation, founders are issued equity in the C-corporation, often referred to colloquially as “founder shares” or “founder stock.”   While there are many existing tools and services (such as Stripe Atlas and Clerky) that quickly and inexpensively allow for the incorporation of a Read More

In the course of raising money, start-up companies are often asked by investors to sign a “Side Letter.” A Side Letter is a short agreement (perhaps 2 -3 pages) that typically asks for additional investor rights, such as information rights and pro-rata rights.   Although these short agreements are commonly requested and generally straightforward, there isn’t a standard template or form of Side Letter.  And in some Read More

Most early stage start-up companies initially raise money from outside investors using convertible securities, such as convertible notes or Simple Agreements for Future Equity (“SAFEs”). These agreements allow the company to receive money from an investor in exchange for a promise to give the investor equity in the company at some future date, usually when the company issues preferred stock to investors in a later Read More