Two Reasons Why Every Startup Needs a Lawyer

I can see you rolling your eyes now, “Why do I, a seasoned entrepreneur, need a lawyer?” You’ve been through the song and dance before – the formation, the hiring, the financing, the exit – and paid through the nose for it in legal fees. Why do it again? Why not just do it yourself, using the know-how and forms you acquired from your previous startup? Here are two reasons, the second of which is perhaps the most important.  (BTW, the I address attorney costs and how to pay for your lawyer in other posts). Not Every Startup is the Same. You intuitively know that every startup is different. So, why treat your present startup…

Why Startups Fail

All of us have read the statistics about the percentage of startups that fail (and the even smaller percentage that receive venture financing).  But why is that?  Well, there are two reasons IMHO:  Lack of focus and bad decisions. 1. Lack of Focus. How many times have you sat through a discussion with a friend or colleague who walks you through their grand idea for a new product or service and the story keeps going on and on and on?  The ideas flow like water off Niagara Falls.  Well, maybe not Niagara Falls but you get the point – one idea leads to another, then another, then another.  Entrepreneurs are excellent idea people but very…

Four Reasons to Work With a Small Law Firm

Of the state’s 22,000 practicing attorneys, 19,000 work in law firms with 17 or fewer lawyers, according to a Washington Bar Association estimate. More than 60 percent work in firms with five or fewer lawyers. Of the 3,000 that work in larger law firms, the vast majority work in three offices:  the Office of the Attorney General for the State of Washington, K&L Gates, or Perkins Coie. If you are a tech or biotech startup and your inclination is to work with a larger firm, chances are you will have to take a number.  Here are four reasons to consider using a smaller law firm. 1. Responsiveness. Getting quick responses to your legal questions as…

How to Start Up in a Down Economy

Many people find that down economies are often the ideal time to start a new business. When economic conditions are bad, many people look for ways to save money and time doing the things that they would otherwise be doing but for the financial pinch. This spells opportunity for the entrepreneurial spirit. So, what steps do you need to take to seize this opportunity and hang the open sign quickly? 1. Business Formation. The first thing you will need to do is form your business. This is a function controlled by the states, not the Federal government. So, in order to form your business you will need to register the business with your state Secretary…

How to Avoid Costly Founders Stock Mistakes

You have decided to brave the startup waters and form your own business.  You decide that a corporation is the way to go so you file your articles of incorporation with your particular Secretary of State. The articles can be a form you complete online that is provided by the Secretary of State or a document drafted by your attorney. No matter how you choose to file your articles of incorporation, you will need to specify the number of “authorized” shares in your corporation. If you don’t know how many to authorize, don’t worry. This number of shares is largely arbitrary and can be changed at a later date using a board resolution. The number…