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How Much Equity do Startup Advisors Get?

There are no hard and fast rules about assigning advisor equity, but there are some guidelines that show an average range of 0.2% to 1%. When assessing how much equity to allocate to an advisor consider two primary questions. First, evaluate the advisor’s experience. It’s helpful to consider whether they have first, second or third […]
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Where Can I Find Good Templates for Founder Agreements?

While it is possible to find just about anything on the Internet, including already-to-sign co-founder agreement, you’d be wise to consult an attorney before deciding on which document you’ll use.  State laws and industry-specific legislation could make these generic agreements inadequate for your purposes. Plus, different business structures will have their own particular restrictions as […]
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The Mystery Behind a Delaware Corp

If you ask 10 entrepreneurs in Silicon Valley where they’re incorporated, I bet you that 9/10 will say that they’re incorporated in Delaware. At LawTrades, we always get asked why attorneys recommend Delaware. Delaware is a completely random state but here’s why it’s a popular choice for entrepreneurs and investors. Convenience Delaware is an easy […]
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What Is the Legal Documentation Needed to Start a Web Startup?

You’ll want to form your business. Either an LLC, C-Corp or S-Corp for most web startups. Get your post incorporation documents in order if you ever plan on taking investors and/or hiring people. This includes stuff like bylaws, initial board consent, restricted stock purchase agreement, confidential information and assignment agreements etc. Decide whether you want […]
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Why Does Y Combinator Recommend Against Forming an LLC?

VC’s and angel investors don’t like LLC’s because of familiarity/experience working with Delaware C-Corps, tax reasons, and stock structure/financing flexibility. My recommendation is to go the Delaware C-Corp route, 9/10 times, especially if you’re a high-growth tech startup. LLCs have only been around for a lot less time than C-Corporations, so angels and VC’s just […]
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What is a Convertible Note?

The climate is improving for startups as many things change in favor of entrepreneurs. One of the most important circumstances fueling startup growth in recent years is the rise of the convertible note, which is now the most popular form of seed financing. Below we’ll look at what a convertible note is, and why companies […]
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