No, You Don’t Need a Holding Company for Your Startup

One question I seem to be hearing more often from prospective clients lately: “How do I set up a holding company for my startup?” The answer is you don’t. Or, perhaps more precisely, you shouldn’t. A holding company is a company that owns other companies. The classic and most successful example is Berkshire Hathaway, the … Read More

The Single Worst Reason for Choosing a Startup Lawyer

If you were getting a divorce, would you ask your soon-to-be-ex-spouse for a divorce lawyer referral? No, you wouldn’t, because that would be so obviously stupid that no rational person would ever consider such an idea. Your soon-to-be-ex-spouse would be the last person you would want to help you in that scenario. Then why would … Read More

Limits on Limited Liability: When You Become Liable For Your Business’s Debts

Many people form LLCs or corporations to protect their personal assets. You don’t want to lose your car, your house, or your personal savings because a business venture didn’t work out. Forming an LLC or corporation gives you access to limited liability. But LLCs and corporations must be property run to maintain that limited liability. … Read More

Summary of Colorado Blue Sky Laws

Summary of Colorado Blue Sky Laws (Updated)

I’ve found that while entrepreneurs have an excellent sense of the law when it comes to term sheets and venture deals, they have a much more limited understanding of securities laws. What’s worse, many lawyers I’ve talked to aren’t aware of the details of Colorado’s securities laws, either. Most competent attorneys know about the basics … Read More

When to Use a Non-Disclosure Agreement (NDA) for Your Startup

When to Use a Non-Disclosure Agreement (NDA) for Your Startup

I once heard a mentor at an accelerator say, “NDAs are worthless and if you see a founder trying to get someone to sign an NDA, it’s a clear signal that they’re a startup amateur. Ideas are worthless. I should be able to tell everyone in the world my idea, and if someone beats me … Read More

How to Approach Negotiations: Game Theory and Generous Tit for Tat

How to Approach Negotiations: Game Theory and Generous Tit for Tat

In business negotiations, it’s critical to develop a reputation as someone who will cooperate and get things done. But business is competitive and occasionally aggressive, and there’s a fine line between having a desire to cooperate and ending up a pushover to more aggressive competitors. So where does one strike a balance between the need … Read More

Splitting Equity

How to Split Equity in Your Startup (updated)

Most startup founders have a pretty basic understanding of how to split equity in their startup. “I want to split equity 70-30” or “I want to split it 50-50.” That’s an okay starting point, but it doesn’t get you all the way there. To get it right, you need to understand the little nuances. And … Read More

Why Your Kickstarter Project Should Form a Limited Liability Company

Kickstarter alone has led to almost 3 billion dollars of funding to nearly 120,000 projects. Crowdsourcing has become a viable alternative to traditional funding sources, whether the focus is launching a specific project or building a business. The success stories of crowdsourced funding are as varied as the projects funded. However, the lessons from failed … Read More

Five Reasons NOT to Form Your Startup As an LLC

There are plenty of savvy startup experts who will tell you that there is absolutely no reason to form your startup as an LLC. You should always be a Delaware C Corporation. If you talk to any of the major accelerators, that’s what they’ll tell you. Same for most VCs. But make no mistake, there … Read More