If your startup includes online products for children, you’re likely aware of the Children’s Online Privacy Protection (COPPA) Rule. Late last year, the Federal Trade Commission proposed a number of changes to the policy, with the goal of shifting “the burden from parents to providers to ensure that digital services are safe and secure for children.”
Newsletter
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Term Sheet Negotiations: Commonly Negotiated Terms With Venture Capitalists
You just received a term sheet for a round of preferred equity financing in your company – how exciting! But what do the terms mean, and which ones should you really care about? Your company’s initial rounds of financing set the precedent for future raises, so it is important for you, as the founder, to know what you are agreeing to with an investor.
What you need to know about generative AI and copyright
Whether your startup is based on an innovation with generative AI or your company is simply using it as a creative tool, you’ll want to read up on the copyright implications of using artificial intelligence to create content.
Creating a Startup While Employed: Important Things to Consider
After working as an employee for someone else, you want to take the leap and form your own company – great! But, understandably, you may not be ready to quit your day job and lose your steady stream of income. Before investing time and money into your startup, it is important to consider the interplay between your current job and the startup – namely, if there are things that could impact your ability to work for both (outside of not having more than 24 hours in a day).
Learn what the CTA means for your startup
The federal Corporate Transparency Act went into effect on the first of the year, adding new requirements for businesses to report details about ownership and control of their companies. The new law targets bad actors such as terrorists and criminals who hide assets in shell companies and by other illegal means. The CTA requires many businesses to file “Beneficial Ownership Information” reports, and there are specific requirements for companies formed after Jan. 1, 2024. To learn more about the new law and your obligations (or whether you’re exempt), read the blog post at O&A, P.C.
What is a Cap for SAFEs and Convertible Notes?
Now that you’ve formed your business and you and your fellow founders are hard at work building your startup, if you are like most burgeoning businesses, at some point you will need an injection of cash to keep the lights on and the engine running. But as founders of an early stage private company, you often have limited cash resources at your disposal. As such, your first foray into raising outside capital needs to be efficient and cost-effective.
What Does “Fully Diluted” Mean?
“Fully Diluted” is a phrase often thrown around when discussing a company’s capitalization. But what does it really mean? Understanding your company’s capitalization is critical during any stage of the company’s lifecycle, not only to maintain an intimate understanding of current overall ownership, but also as a way to gauge whether a potential investment is worth the equity you’d be giving up in return.
What are Blue Sky Laws and How Do They Affect Me?
To succeed as an entrepreneur, there are many laws which you need to be aware of, including “Blue Sky Laws.” In the United States, Blue Sky Laws are the securities laws of the individual states, and they reflect the ways each state regulates the offer or sale of “securities,” or the trade of financial assets such as stocks, options, or bonds.
Papering a Preferred Equity Venture Deal: an Introduction to the NVCA Deal Docs
As an entrepreneur, you are no stranger to making key decisions for the growth of your business as you secure your team, build out your business plan, and seek funding to scale. It goes without question that one of the more monumental decisions will be determining when to raise venture capital. After you make the determination to raise venture capital, you will spend time pitching your business and product to venture capitalists to seek out potential financing partners and investors.
What Are the Differences Between Founders, Directors, Officers, and Employees?
You need others to help build your business, but as you build your team, it is important to distinguish the different roles in your corporate structure. Are you dealing with co-founders with whom you started the company? How do you divide up the equity? Do you have a board of directors, and if so, who is on it? Did the board appoint any officers? Do you need to hire employees, advisors, or contractors to help carry out the company’s objectives? Answering questions such as these is essential to running an efficient and successful corporation.