SUP Client Success: WE Drive-Ins Launching Reinvented Movie Experience

Recent SUP client WE Drive-Ins (WE) is reinventing the great American drive-in experience by reinvigorating prime Class A office parking lots as venues for first-run films. WE will launch publicly Feb. 11 with the screening of Oscar-contender Minari at the historic former Sears lot at Fourth Street and Colorado Avenue in Santa Monica, California.

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Yes! I Was Granted Stock! Is It Taxable?

With little cash coming in the door and debt accumulating, startups do not have the means to pay big salaries to attract top tier talent and add to their headcount. That  is why startups should consider adopting a stock incentive plan to compensate and motivate employees, contractors, and advisers with stock instead of salaries. Although it may mean “working for free” for now, talented employees will be enticed by the idea of owning a piece of the startup because it could mean a big pay off later when, and if, the startup has a successful initial public offering or is acquired. Although the employee, contractor, or adviser may feel like they are “working for free,” the IRS disagrees.

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What is intellectual property? Why is this important before starting work?

When discussing intellectual property (IP) with founders, I get two very different questions from founders, and both questions  have the same answer.  The first question is, “This IP is my baby, can I keep it instead of giving it to the company?” The second is, “Can’t we worry about IP later?”  

The answer to both questions is always “no” if you aspire to obtain venture capital investment to grow your company. Venture funds will take a hard pass on any startup that does not own or has not taken steps to protect its IP. 

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What is a Convertible Instrument?

Whether it’s your Uncle Bob’s pocket money from selling a Chevy or a more significant investment from your friend’s professor’s brother who happens to be an angel investor, early investments in your startup may come from surprising places. Regardless of where the money comes from, one of the most common methods to document the investment for pre-revenue and pre-product startups is  by using some form of convertible instrument.  

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Why Should I Choose to Form as a Delaware C Corporation if I’m Forming a Startup?

As of 2019, more than 1.5 million business entities have been formed in Delaware – that’s more than 1.5  businesses per resident of the U.S.’s second-smallest state. 

The reason is not that Delawareans are extremely entrepreneurial citizens, of course. Rather, Delaware is the legal home for businesses operating throughout the United States, with nearly 68% of Fortune 500 companies choosing it as their legal starting point, due solely to Delaware’s favorable corporate laws. 

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