Early stage startups tend to seek legal advice only when IP is involved.
That mindset can come back to bite entrepreneurs…hard.
During a recent LC Best Practices event, WilmerHale’s Joe Wyatt and Ashwin Gokhale gave multiple examples of how firms can help startups with everything from avoiding landmines to benchmarking equity for employees and advisors.
Here are some top picks:
1. You may not own that logo your friend designed for you…unless you’ve secured the rights.
2. Advisors typically get .25% to 1% vesting monthly over 24 months.
3. When issuing founders stock, think about positioning for funding as well as a liquidity event—splitting equally among the founders is seldom a good idea.
4. On crowd funding: pre-selling products by crowdfunding can be great; never do the other type of crowd funding–small amounts from non-professional investors. Best to minimize the number of investors and always deal with professional investors.
5. Valuation is like selling a used car–it’s what each side is willing to take, there’s no absolute formula or recipe.