Delaware C Corp
Need a Delaware C Corp Startup Lawyer? Andrew S Bosin is an experienced Delaware C Corp Startup Attorney representing companies at the initial start-up stage. From his offices just outside of New York City in New Jersey Andrew represents Mobile App, SaaS, Tech, Software, Internet, e-commerce and Blockchain companies, startups, entrepreneurs and vendors.
Andrew represents companies seeking to incorporate in Delaware in all fifty states and offers a fixed rate legal fee Delaware Startup legal package which includes all legal services and the drafting of business contracts and legal documents.
Andrew’s Delaware startup legal package consists of: drafting Bylaws, Initial Board Consent, Action of Sole Incorporator, Board Consent Approving Founders’ Stock, Restricted Stock Purchase Agreement, 83(b)(6) Tax Election and Invention and IP Assignment Agreement.
Andrew also helps C Corps with Vesting of Equity and Options, Employee Stock Option Plans (ESOP), Employment Agreements, Independent Contractor Agreements, Executive Compensation Packages, Termination Agreements and Job Offer Term Sheets.
Andrew is focused on providing SaaS entrepreneurs with knowledgeable, experienced and responsive legal advice and services at reasonable rates and by being the go-to law firm when it comes to helping SaaS startup founders build game-changing companies. From inception through exit, Andrew knows what it takes to create, finance and scale a SaaS startup.
It is an absolute fact that 90% of startups fail. If you are contemplating joining a SaaS startup you need to do yourself a favor and engage in some serious due diligence before joining any startup.
SaaS Lawyer Andrew S Bosin LLC with offices outside of New York City in New Jersey speaks from experience when discussing what you should know before joining a SaaS startup. This is because Andrew built and scaled a SaaS business with partners that was awarded a patent for its application.
Andrew was personally involved in every aspect of his SaaS company including performing all of the legal work for the Delaware C Corp, raising money from investors, closing multiple capital financing rounds, negotiating software development deals and negotiating agreements for global businesses to use his company’s SaaS application. Along the way, Andrew interacted with investors, attended conferences and participated in his company’s sales and marketing processes.
Andrew works with early stage SaaS entrepreneurs and startup co-founders in helping them create a sound corporate legal structure by drafting bylaws, founders restricted stock agreements and intellectual property assignment agreements.
Andrew also works with SaaS startups in negotiating investor documents and agreements such as Subscription Agreements, SAFEs and Promissory Notes. Andrew also reviews venture capital (VC) terms sheets.
Why do you want to create or join a SaaS startup? This is the question that you need to ask yourself and think about before you quit steady, full time employment. With so many avenues available for you to research online about SaaS startups there is a treasure trove of material about the SaaS “startup grind” and how difficult it is to take an idea or concept, develop it and then successfully market and sell it to enterprise customers.
Are you joining a SaaS startup because you want to be your own boss or you want to work with other entrepreneurs outside of a traditional workplace setting? Do you want to be part of a SaaS startup because you read somewhere or someone told you that this is a great way to get rich?
One thing that won’t escape you on the internet is that 90% of startups fail. They fail for a myriad of obvious reasons like the startup runs out of money. But there are other reasons that you probably would never think about such as what if the startup builds a great product but picks the wrong industry to market it to and cannot pivot quickly enough to right the ship and sell to other types of customers? There is a huge possibility that you and your partners could create something specialize but nonetheless not remarkable. What does this mean? It means that you could test your product with 50 users who have a need for your type of product and they might provide great feedback but if your product does the same thing as ten other products already out there then chances are you will not have any success trying to sell yours to enterprise customers.
You need to be prepared when joining a SaaS startup for financial uncertainty. Even if you receive a salary it will probably not match what you made when you worked a typical 9 to 5 job. How are you going to make up that income?
Getting a salary in a startup is no guarantee that it will continue for any length of time. A startup might have funding for two years which is based on anticipated customer revenues. If the revenues fall short of projections and the company cannot secure additional funding you can be certain that salaries will be cut or taken away so the startup can have a chance at surviving financially.
You also need to think about the fact that resources we all take for granted while working for large companies will simply not be available when you join a startup. For example, if you had a health insurance claim question you didn’t think twice about speaking with HR. In some startups there is no HR and your left calling your company’s PPO to speak to someone located in another state who can hopefully answer your questions. When you work for a large company you get use to tech and IT support, lunch services, cafeterias, travel and entertainment expenses, dinners out with clients, corporate retreats to place such as Las Vegas, Palm Springs or Scottsdale. In a startup, for the most part, you will have none of these things. If you need to go to an industry conference to connect with potential customers chances are you and your partners will be paying out of your own pockets for hotels, meals and airfare.
One of the most important things you need to know before joining or starting a startup is what is the level of commitment by the other owners of the company. Meaning, are they all in and working for the startup as their full time job. Or, do they all still have to work full time and they are working on the startup part time. There is nothing bad about having to work while at the same time trying to get a startup off the ground. You just need to have realistic expectations as to how long it could take for the company to develop a product, market it, sell it successfully and make some money. If none of the founders have left their day jobs it could 2-3 times as long to build and scale a startup as opposed to owners who are working full time on their startup. And, don’t be surprised if a startup whose founders still hold day jobs have a tough time raising money from serious investors. No serious investor is going to risk their hard earned money on a group of individuals who themselves won’t take the risk of quitting their day job to join their startup full time.
It is also extremely difficult to schedule meetings with potential clients, investors and contractors during the day when you are still working full time for a company other than your startup.
You need to also assess what the other owners are bringing to the table now to contribute to the growth of the company. A lot of startups make the mistake of bringing on co-founders whose roles are not fully defined because the product has not been built and they might not do much for let’s say a year when the product is done and the company is ready to sell it in the marketplace.
What are the problems with this situation? Let’s say you are being brought on as the developer and getting stock in exchange for the work you will perform. And, let’s also assume you are a co-founder. If funds are limited your role during the first year might be the most important in the company. It doesn’t have the money presumably to hire an outside developer and you are going to be putting in more time than any of the co-founders in the early stages. This is the most critical time for you to carve out your stake of the equity pie and you need to be extremely vocal about it.
If some of the co-founders who are contributing nothing in the first year other than their thoughts on the “idea” and nothing else and they want as much stock as you then you have two choices. You can either accept an even split of the equity or you can draw a line in the sand and tell them that your work effort and what it means to the survival and growth of the company is more important than anything else not to mention your time commitment and that you want more stock. If the other co-founders don’t agree with your position you could either walk away or accept what equity is being given to you. Either way, you have an objective view of what dealing with your co-founders is going to be like in the future. Clearly, if you don’t get more equity despite the fact that without you there is no company then you know for sure your getting into business with a bunch of greedy pigs.
You need to protect yourself legally when you begin conversations or negotiations to join a startup. If the startup is bringing you on board because you created the technology or software it’s a good idea that you sign a Non-Disclosure Agreement saying that you are under no obligation to enter into a contract or deal with the company and that your intellectual property is confidential information that the startup cannot “steal” or “use” in the event you choose not to join the startup. All too often entrepreneurs in the excitement of wanting to join a startup give the startup the keys to the candy store and unfortunately sometimes this is how technology is stolen or misappropriated.
You should also never join a startup and quit your day job unless you have an agreement in writing memorializing the terms of your deal with the company. If you are being issued stock in the startup you need to make sure the agreement states how much you are receiving at the time the agreement is signed and how much stock vests over time. You need to also find out whether or not your business relationship or employment with the startup if it is terminated can the startup claw back the stock that you have already been issued.
There is also something very different about the culture in a startup. To begin with, there is no traditional work day or work hours. There are periods of time when you might be expected to work 18 hour days and on weekends let’s say to get the product finished. There is also the possibility of having to miss or cancel dinners, birthdays, kids’ sporting events and even vacations because the startup especially if you are a co-founder comes first. Sometimes there is also the feeling of isolation because you are working on some projects by yourself with perhaps little to no interaction or feedback from co-workers.
What else do you want to find out? You need to know for the product that the startup intends to build what experience and connections do the other co-founders have in the vertical that when the product is done either the co-founders have their feet in the door of companies they have relationships with and can sell the product to or they know investors that will be ready to fund the company once the product is finished being built. If the answer to both questions is no your startup is going to have a tough time surviving. The two most critical things for the survival of a startup are signed contracts and money to keep going.
You should also find out and do your own research to see what kind of success or track record the other co-founders have had in their business lives or in other startups. If one of the co-founders has successfully built and exited from a startup and raised a decent amount of investment monies along the way this is the type of person you want to get into business with if they check all of the other boxes. They have already done the startup grind and can raise money. What this means is that they have a proven track record of success and will have the ability to attract key hires and investment monies.
You should also find out what the strategy is to build out the business and market the product to potential customers. Does the startup have a fundamental understanding of the marketplace that it is going to be selling its product into? Do the other co-founders have any experience in selling into the company’s target audience, vertical or industry? If the answer is no to all of these questions the startup is going to have a tough time gaining traction and making any sales. If any of the other potential co-founders tell you that prior industry experience or “real” connections in the industry the company is selling into does not matter and because they have built the “best” product they will be able to sell it you should think twice about getting into business with these individuals.
It is also important to learn whether or not the company has or is going to create digital financial records to track and estimate costs, revenues and capital expenditures on a monthly, quarterly and yearly basis. This is important for a variety of reasons. For starters, startups need to be very careful how they spend and manage their cash. Preparing a budget along with tracking costs and expenses on a spreadsheet will help a startup stay on track and manage its money effectively. And, no shrewd investor is going to give the startup any of their money unless it can demonstrate an ability to effectively manage and track costs, expenses and revenues.
What else? Does the startup know any successful executives in your startup’s industry that have agreed to be advisors or on the company’s board of directors? It is not a deal breaker but having these types of professionals advising your company will not only help it get from point A to point B a little smoother it will also add credibility to the company when trying to sell the product to potential customers. Another thing to ask is how much stock these advisors or board members are receiving.
You should also bring up the subject of an exit or selling the company. The reason why this is important is because if you are seeking monies from a VC or serious investor they are going to want to make sure that every co-founder is on the same page as the VC with an exit strategy. If one co-founder wants the company to continue until it hits let’s say $20 million in sales while two other co-founders want the company to reach $40 million in sales before selling its going to be a rough meeting with any potential VC.
This is just a sampling of some of the things you need to know before joining a SaaS startup and not an exhaustive list.
Andrew’s clients span a wide range of SaaS, software and cloud industries from Health Tech to HR Solutions to Real Estate to Big Data, Artifical Intelligence, Analytics and Blockchain Technology and each comes to Andrew with a distinctive personality and business vision. In all their diversity, their common thread is one Andrew shares as well: a skill for cutting edge innovation. Andrew’s clients keep him on his toes and at the top of his game and he wouldn’t have it any other way.
Andrew helps C Corps located in New York, NYC, Brooklyn, Connecticut, Boston, Philadelphia, Pittsburgh, PA, New Jersey, Charlotte, Raleigh, Atlanta, Washington, DC, Virginia, Los Angeles, Silicon Valley, San Francisco, San Diego, California, Salt Lake City, Provo, Denver, Boulder, Phoenix, Ohio, Orlando, Tampa, Miami, Florida, Chicago, Illinois, Seattle, Delaware, Maryland, St. Louis, Kansas City, Austin, Dallas, Houston, San Antonio, Texas, Nashville, Memphis, Idaho, Alaska, Canada, Toronto, Montreal, Vancouver, Mexico City, India, Europe, UK, London, Dublin, Rome, Paris, Amsterdam, Berlin, Israel, Hong Kong, China, Poland, Denmark, Singapore, Barcelona, Madrid and Australia.
Please call Andrew for a free Delaware C Corporation consultation at 201-446-9643.
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