swampthing

The knowledge that my ancestors have been through a lot worse.

I suspect the use-case they have in mind are folks who have CI hooked up to Github (so using this feature will automatically trigger tests).

Hey, good to see you again! You're far too kind :) It's very rewarding to hear that we could make a difference. Best of luck to you as well!

Definitely outside my area of expertise :) I suspect it's only civil, assuming your products are not regulated in some way. But I really can't say for sure - sorry!

Whoa, good catch - we'll get that fixed. Thanks!

1 & 3. Unfortunately, I have not seen any high quality services geared toward non-startup businesses. Believe it or not, that's actually a harder problem than the one we're solving. There is just much less standardization outside of the world of startups, due to how fragmented the market is. There might be some useful content out there, but I don't know of any personally (let me know if you find some!).

2. I don't know of any resources on this (although I'm sure they exist), but good insurance brokers can often walk you through a lot of the analysis. I've heard Heffernan is a good one (https://www.heffins.com). The good insurance brokers are usually pretty objective and not very sales-y. If you need to get super in-depth in analyzing a policy, you may eventually need to talk to an insurance lawyer - but I suspect most people don't go that far.

4. It's tough. It tough even for attorneys to find competent attorneys outside of their own practice areas, because it's hard to tell who's good. One of the major issues is that most legal work never gets tested out. Clients can certainly have their impressions based on their interactions, but until legal work is tested out - either by being reviewed by other attorneys, or in courts, there's just no way for a client to ascertain the quality of the work product. Legal services are a credence good: https://en.wikipedia.org/wiki/Credence_good The best thing you can do is to find people who have similar businesses and successfully survived the risks you're trying to protect against, and then see what lawyers they recommend. I realize this is a ton of work, and it may not even be possible in many cases. Depending on where you're located, we might be able to give you some attorney leads - feel free to ping us at support@clerky.com.

We'd love to, but are pretty focused on the US at the moment. Maybe one day :)

Thanks for the suggestion! We have all the pages listed out in the navigation - you might have to click on the hamburger menu in the upper left if you're on a mobile device. Or let me know if I misunderstood :)

One of our illustrious editors will respond to your questions!

That was a huge motivation in writing this. I've found that it's common for people to gloss over legal questions with a surface-level answer, and use a variety of tactics (including making the other person feel dumb) to dissuade any follow-up questions (usually because they want to hide their inability to answer follow-up questions).

Thanks! Feel free to email us at support@clerky.com and we can see if we can help (assuming you have a DE C-corporation). I'll keep an eye out for your email :)

It depends on what kind of company you're looking to build. If you're going to be looking to raise money, especially from an accelerator or VC, the standard approach is to form a Delaware corporation.

But for other types of businesses, there can often be no standard approach. Out of curiosity, why are you looking at WY in particular?

As for your second question - unfortunately, there's no way to do so at the moment :) But thanks for the sentiment!

Thanks for the kind words George - and thanks for being an editor :) I completely agree with you on the scope limitations - we're looking forward to pushing the boundaries out a bit more over time with additional articles.

Glad to help! The handbook will pay for itself just as a support resource for us :)

1. That's routinely transferred over in the restricted stock purchase agreement, or else in a separate technology assignment agreement. Just depends on the preference of the lawyer. But yes, this is absolutely crucial as part of the formation process.

2. It's almost always easier to just issue new stock rather than re-distribute whatever shares were already issued. It's not difficult to add a new co-founder at all, fortunately :) Any startup lawyer can help you with this, or else we have templates for it on Clerky too. Note that if you don't have enough shares available for issuance in the corporation, you'll typically want to file an amendment to your certificate of incorporation in order to authorize more.

3. I don't know about progressive equity in particular, but in general, it's not too difficult to adopt a new stock plan as long as there are standardized forms for it. You can have old and new stock plans co-existing next to each other. That said, for something new like progressive equity, your lawyers might want to review everything to make sure it all works - that would add to the cost.

4. That all sounds about right. Delaware will require you to submit an annual report (just basic details about your corporation - doesn't take long). Early on, there's usually no need to have a lot of formality around board meetings. You'll need to pay your registered agent fees every year too. Different states and localities might have their own requirements - in some cities, you have to get a business license, for example. In terms of records, I would recommend just keeping all your legal paperwork as a matter of course.

Ah sorry, I wrote my first answer before seeing your edits. I'll just number my responses here for convenience.

2. It shouldn't change much early on... it would probably be premature optimization to think about it early on, to be honest. The shareholder limits can lead a company to go public, but I think the laws have changed since Microsoft's time to make this less of an issue. Of course, you still have the issue of shareholder liquidity, so I suppose you will want to plan to be able to buy back people's equity :) Also, VCs will usually have demand registration rights that can force the company to go public at some point (never seen those negotiated away though).

3. Usually startups are more forced into more exotic corporate structures due to having some pre-existing business that is hard to convert into a DE C-corporation. So it's usually not something they sought out. I don't know of any good resources for these types of setups unfortunately - in general, the less standard something is, the more I think an attorney should be involved. I would only recommend DIY approaches in areas where there is a ton of standardization.

4. It sounds counter-intuitive, but for startups, I don't consider there to be any special things to look for. VC backed startups are all setting up to be massive successes - if there were any significant issues with respect to highly profitable companies, they would have likely been addressed.

Which is not to say that you won't need to change things later on - but the optimizations that are not done up-front are skipped because the opportunity cost in the early stages is not worth it. Many startups do not get off the ground because too much time was spent on hyper-optimizing legal / tax up front. It's usually better to just go with the beaten path on the legal front, and focus on the business.

But yes, ultimately, there will probably be some off-shoring involved in optimizing that kind of massive success.

Great idea - we gave PDFs to the editors for reviewing purposes (because it's easier to mark those up than a webpage), but we'll see what we can do to get that in shape for public consumption.

Great question - there's nothing stopping you from doing it at incorporation. But it's pretty rare. Very few companies will have enough negotiating leverage to keep it when they raise money. So rather than complicate things from the start, I think the majority view amongst startup attorneys (there are differing opinions on this) is to go with the standard setup, then add in super-voting later on if the company is in a strong position.

Thanks! This was definitely a labor of love :) Those are great suggestions - I'll put them on the todo list.

Hi everyone! I'm one of the cofounders of Clerky :)

We've gotten a ton of questions from founders over the years - this handbook is what we always wished existed, so that we could point people to it. There are already a lot of great blog posts by attorneys out there, but we thought it was also important to have something that (1) helps founders build a solid foundation of knowledge rather than piecemeal, (2) covers the terminology and practices used across startup law firms (thanks to our incredible editorial board), as opposed to one attorney or one firm, and (3) is kept up-to-date as laws or market practices change.

We're very excited to be finally sharing this with the community - please let us know what you think!

A few notes:

* This is very much aimed at startups of the type that might apply for YC one day, seek angel or VC money, etc. Obviously there are many other kinds of businesses, but it's really hard to write something that is broadly applicable, unfortunately. My apologies in advance to founders of other types of businesses.

* The content that we have has been thoroughly vetted, by more top-tier startup attorneys than you can shake a stick at. That said, the scope of the handbook in terms of topics covered should be considered a first cut, as should the presentation. We have many articles on the todo list, and also have some ideas for how to better present some of the more complex concepts.

Finally, feel free to use this thread as an opportunity to ask any general questions you might have about legal issues for startups - my cofounder Chris and I (we're both startup attorneys) will do our best to answer. Some of our editorial board might pop in from time to time too!

Founder of Clerky here :) Feel free to shoot us an email and we can see if we can help... there is no good one-size-fits-all approach (as you've discovered), but we're happy to see if there's something about your situation that might make it easy to connect you with a bank. For example, it's not necessarily the foreign address that makes it difficult - a lot of banks will be happy to open bank accounts for people with SSNs that happen to live outside of the US.

I don't think you can judge whether someone is oppressed based on how successful they are. If they're successful, it might mean they weren't oppressed, or it could just mean they overcame the oppression.

Microsoft Word

Usually, you would have the transaction approved (or rejected) by the disinterested members of the board (i.e. the directors with no conflicts of interest).

I think I missed a step somewhere - why did the remote work cause the metrics to go out the window? Or were the metrics just tied to face time(!)?

I'm not familiar with Texas law, but it seems likely that there's more to it than that... at the very least, you probably need board approval before issuing equity.

But in any event, I was referring to authorizing more shares under the certificate of incorporation - which is basically setting the maximum number of shares that the company can issue. That's a different process than issuing shares (though every time you issue shares, you should make sure you have enough authorized and available for issuance).

Most likely not - the rights and preferences of the preferred stock will get determined by the deal you negotiate with the VC, so anything you have before that will likely get thrown away anyways. It'd be very unusual to start off with preferred stock at formation.

We just created some new templates for these kinds of scenarios, but it really depends... could you email us at support@clerky.com so we can learn more about your situation? Just mention this thread :) Thanks!

Good to hear... we repeatedly ran into this issue with them over the course of several years. I can't tell you how many times we argued with them over this. But it sounds like they may have reformed their ways!

That might work with some registered agents, but it won't with Incorp - they will require you to either have a new registered agent in place, or you need to dissolve your company.

Yes, that's correct - although for corporations, you typically don't have to pay it for the first year (as long as you foreign qualify in CA for that year). So at least you get a small reprieve there :)