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TAG: Legal
In Demand: Free Early Stage Start Up Legal Library
TheFunded.com Advice
Posted by KipMcC on 2009-08-28
Tags: Operations Lawyers NDA Legal Incorporating Agreements
The next time you talk to your law firm, let them know they should pioneer (be the first, take credit) the following concept:
Early-stage, cash-efficient start-ups increasingly require an equally efficient supply chain in order to make it work. Take for example Capital Factory, Y-combinator or even micro-style investments from more traditional VCs. A start-up raising $20k – $250k simply cant afford traditional legal costs associated with:
* incorporating,
* equity and option plans,
* option grants,
* convertible debt agreements,
* all docs associated with being INITIALLY funded (term sheets, standardized series-A docs),
* NDAs,
* separation agreements and release paperwork,
* contractor agreements, and so on.
I propose the following: forward-thinking law firms should create a FREE legal library that includes AT LEAST the items listed above. The should GIVE this library to start-ups that agree to become clients after a funding event of a particular size…maybe $250k or more. To be clear: I’m suggesting that law firms loss-lead with this free legal library and win clients that may become the next Google (or, realistically, may also go out of business). It’s time for the supply chain to evolve. we're starting to see some standardization of termsheets...now let's continue the thought.
PRIVATE: Members OnlyFree Legal Agreement Generators
TheFunded.com Advice
Posted by fnazeeri on 2010-01-21
Tags: Operations Legal Agreement
I just came across these free tools for generating website terms of service agreements and privacy policy agreements.
PRIVATE: Members Only (161 Characters)Experience with Law Pivot.Com
TheFunded.com Discussion
Posted by Anonymous on 2011-02-17
Tags: Legal Lawyers
Our Lawyer Wants to Be Appointed as an Officer...
TheFunded.com Discussion
Posted by Anonymous on 2009-10-09
Tags: Operations Legal officer
Penalties for Using a Non Registered Broker to Raise Money
TheFunded.com Advice
Posted by raisecapital on 2009-07-14
Tags: Funding Sources Broker Dealer Legal
In California, 25501.5 of the Corporations Code gives any person who purchases a security from, or sells a security to, a broker-dealer that is required to be licensed, but is not, the right to bring an action for rescission of the purchase or sale, or if already sold, for damages. Five year statute of limitations, or two after discovery, which ever is first.
1029.8 of the Code of Civil Procedure was amended to cover people who should be licensed as a broker-dealer, but who are not and take a commission for selling securities.
The purchaser can sue the "finder" for damages, and may recover treble damages (limited to $10,000 above the purchase price) and may be awarded attorneys fees and costs.
Most important, the law give the investor the right to rescind their investment (get their capital back) for two years, which puts the capital at risk for that period of time. That may make additional rounds more difficult to raise.
So the finder is, in fact, guaranteeing the investment.
Has anyone run into this in fund raising? Have they asked the finder about it? Has anyone recouped their investment or known of someone who did using this law?
By the way, it is my understanding that this doesn't apply to officers of the corporation.
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