Search Results for: stock

In the News: Founders Circle Explores Tick Tock of Stock Options

Mandated by the SEC, unexercised employee stock options expire 10 years from date of grant and are absorbed back into the company. In the past this was never a problem, but now that top companies are staying private longer they are forced to rethink how they manage employee incentive stock programs. Goodwin partners Lynda Galligan […]

Founders Circle Explores Tick Tock of Stock Options

Mandated by the SEC, unexercised employee stock options expire 10 years from date of grant and are absorbed back into the company. In the past this was never a problem, but now that top companies are staying private longer they are forced to rethink how they manage employee incentive stock programs. Goodwin partners Lynda Galligan […]

Founders Alert: Be Aware of Stockholder Inspection Rights

We want to make sure founders are aware of a Delaware law that stockholders are using with increasing frequency to inspect the books and records of the Delaware corporations in which they hold stock. Section 220 of the Delaware General Corporation Law provides stockholders with the right “to inspect for any proper purpose . . […]

Founders Series: Stock-Based Compensation – Part III

In the second post examining stock-based compensation issues, we looked at the types and uses of stock options . We now examine additional stock-based compensation considerations that founders should take into account. Other Stock-Based Compensation Considerations  Vesting It is important to consider vesting schedules and the incentives caused by such schedules before implementing any stock-based compensation […]

Founders Series: Stock-Based Compensation – Part I

Our most recent round of “Founders Series” posts focused on anti-SPAM legislation . Adding to this discussion about important matters for startup founders to think about, we now turn our attention to issues relating to Hiring and Compensation – including posts focusing on and explaining stock-based compensation; equity incentives; 83(b) memoranda; and specifics regarding employees and […]

Founders University: Incentive Stock Options vs. Non-qualified Stock Options

Welcome back to Founders University, our core curriculum designed to provide startup founders with the basics needed to launch a company while minimizing costly missteps or mistakes. For our next session of Founders University, we share a comparison of Incentive Stock Options (ISOs) and Non-qualified – or Non-statutory – Stock Options (NSOs). In this course, […]

Startups Take Note: Pinterest Will Allow Ex-Employees to Keep Vested Stock Options for Seven Years

Digital pegboard company Pinterest made big waves in the startup community by announcing that it would allow employees with at least two years of tenure to keep their vested stock options for up to seven years after they leave the company. By removing the standard 90-day post-employment option exercise period on most departing employees, Pinterest […]

Rethinking Start-Up Equity: The Dynamic Stock Plan

Serial entrepreneur and friend of Founders Workbench, Jay Adelson, thinks current methods for distributing startup equity are outdated. The traditional stock option, which allows employees to purchase 25 percent of their equity with no further commitment to the company after one year, is increasingly resulting in one-year terms that end on the vesting cliff date, […]

3 Tips on Attracting Top Talent With Stock Options

This week in Entrepreneur, Goodwin Procter partner Lynda Galligan discusses how to use stock options to attract start-up talent when your company has limited cash on hand. According to Lynda, these three tips will help founders lure ideal candidates: Know what you’re offering. Make smart offers for key talent. Determine the right terms for acquiring […]

83(b) Election: Tax Consequences of Restricted Stock Purchases

U.S. Federal Income Tax Consequences of the Purchase of Restricted Stock or Restricted Units; Section 83(b) Election The following summarizes certain U.S. federal income tax consequences of a taxpayer’s purchase of shares of capital stock in a corporation or units in a limited liability company (the “Equity”) that will be subject to vesting restrictions and possible […]

Stock-Based Compensation

Start-up companies frequently use stock-based compensation to incentivize their executives and employees. Stock-based compensation provides executives and employees the opportunity to share in the growth of the company and, if structured properly, can align their interests with the interests of the company’s shareholders and investors, without burning the company’s cash on hand. The use of […]

Participating vs. Non-Participating Preferred Stock

From time to time we are going to give a brief primer on common terms and issues in venture financings.  Today, we’re tackling participating vs. non-participating preferred stock, a fundamental economic term in VC deals that goes to the heart of the business deal between investors and management in connection with a sale of the […]

Favorable Tax Treatment Extended for Founders and Investors Receiving Stock in Certain …

Good News!!!  Favorable Tax Treatment Extended for Founders and Investors Receiving Stock in Certain “Qualified Small Businesses” Just in time for the holidays, Congress recently extended certain favorable tax benefits under the Small Business Jobs Act of 2010 with respect to individual tax payers that receive stock in certain “qualified small businesses” through the end […]

Founders Flash: Key Vesting Terms Every Entrepreneur Should Know

Taking the leap into the world of entrepreneurship? The first step is to familiarize yourself with common startup terminology and industry lingo so you can enter your business meetings with confidence. In this issue of the Flash, we are define three types of vesting terms every entrepreneur should understand. For more key terms, please check […]

Founders Flash: Key Entrepreneurship Terms To Help Your Startup Survive

New companies face an uphill climb that only gets steeper. As a first-time founder, it can be easy to misstep so it’s important to know the basic legal terms to help your startup survive and reach its goals. In this issue of the Flash, we are defining five basic legal startup key terms every entrepreneur […]

Founders Flash: Key Terms Every Entrepreneur Must Know Before Meeting With Investors

Between venture capitalists, angel investors and equity crowdfunding, more and more channels of funding are becoming available for your startup. To enter into these meetings with confidence, entrepreneurs must be prepared and armed with basic startup terminology. In this issue of the Flash, we are defining five key terms every entrepreneur should be familiar with […]

Brenda Sharton

Brenda Sharton, a senior partner with Goodwin, is a first chair trial lawyer with over 25 years of experience. Ms. Sharton is the Chair of Goodwin’s Business Litigation practice as well as its Privacy + Cybersecurity practice. She counsels and represents public and private corporations and their boards in complex commercial litigation, arbitrations and civil […]

Michael Jones

Michael Jones is a partner in Goodwin’s Securities Litigation + White Collar Defense Group with a focus on working with Technology and Life Sciences clients. He has been recognized by the Daily Journal as one of California’s top 40 Under 40 lawyers, listed in The Legal 500 U.S., and recognized as a Super Lawyer “Rising Star” for his […]

Top-up Option Grants: What Founders Should Consider

Equity grants are often a source of contention for founders of emerging companies. Slicing up the “pie” in the early stages can give rise to tense conversations between the founding team and among investors. One related issue that sometimes gets less attention is the issue of “top-up” option grants to early employees outside of the […]

Deadline Approaching for Reporting 2016 ISO Exercises and ESPP Transfers

Summary Section 6039 of the Internal Revenue Code requires corporations to provide information statements to employees (including former employees) and information filings to the IRS regarding exercises of incentive stock options (ISOs) by employees and former employees. Similar information statements and filings are required to report transfers of shares of stock by employees and former […]

Shoobx, Goodwin Partner to Offer Enhanced Legal Technology Automation to Emerging Companies

Goodwin and Shoobx, a startup aimed at helping entrepreneurs incorporate, receive funding and grow, have announced a partnership to offer their product on Founders Workbench, and to support the firm’s startup clients and emerging companies practice. Shoobx assists companies with incorporation, equity management, HR onboarding, governance, fundraising and legal collaboration. “Our partnership with Shoobx is the […]

Founders Flash: As angel investors pull back, will valuations follow?

The Flash loved the ride last year, when valuations for startups seeking funding hit five-year highs and the good times rolled. Since then, angel investors have withdrawn a bit, signaling new-found caution when it comes to young company valuations. With angel investors serving as a key source of financing for early-stage companies, this one bears […]

Founders University: Avoid Common Traps when Granting Equity Incentives

Welcome back to Founders University, our core curriculum designed to provide startup founders with the basics needed to launch a company while minimizing costly missteps or mistakes. For our next session of Founders University, we examine the various traps that threaten founders when granting equity incentives. In this course, partner Lynda Galligan explains what to […]

Founders Flash: Amidst #GreatFallOfChina, Starbucks CEO Stays Cool – and Smart

The Flash was not alone in following Twitter’s top trending hashtag last week after more than $1 trillion (!!) was wiped from Asian markets – Starbucks CEO Howard Schultz also noticed. And he did something interesting – and smart – in response. In a compelling memo sent to all 190,000 Starbucks employees, Schultz eased team […]

Founders Flash: Female entrepreneurs making strides in startup ownership

The Flash took favorable note of recent U.S. Census Bureau data showing that, although the growth rate of new businesses overall has stalled, the share of women-owned small businesses has climbed. Indeed, the number of women-owned businesses grew at a 27% clip between 2007 and 2012 – during which time the total number of U.S. […]

Founders Series: Financing Strategies for Startups

Our first round of “Founders Series” articles focused on topics relating to startup formation – including choosing the right structure, tax considerations, a checklist for forming a C-Corp, and important regulatory matters. To round out this discussion about important items for founders to consider, we now examine strategies for getting venture capital and other funding […]

VIDEO: Founders University: 83 (a) vs. 83 (b) Elections

Welcome back to Founders University, our core curriculum designed to provide startup founders with the basics needed to launch a company while minimizing costly missteps or mistakes. For our next session of Founders University, we examine the concept of restricted stock taxation. In this course, partner Lynda Galligan discusses restricted stock and explains the differences […]

VIDEO: Founders University: Basic Tax Concepts

Welcome back to Founders University, our core curriculum designed to provide startup founders with the basics needed to launch a company while minimizing costly missteps or mistakes. For our next session of Founders University, we provide a quick overview of basic tax concepts as they relate to compensation and investment income. Partner Lynda Galligan gives […]

Founders Flash: Overdoing the “Party Rounds” Leaves a Lead Investor Gap

The Flash understands that entrepreneurs thrill on having multiple angel investors when fundraising. But too much of such “party rounds” can be a bad thing, as no one investor serves as lead and leaves startups wanting focused help if the company hits a rough patch. The Flash looks at compelling research suggesting that having many […]

TCN: Know Your Valuation for Equity Compensation (And Avoid the Perils of 409A)

If you are a CEO or a CFO of a high growth startup, it is vital to understand how to value your company correctly. This limited seat lunch will address questions related to offering employees stock options, the difference between ISOs and non-ISOs, general valuation concepts and approaches outlined by the IRS as they apply to […]

Goodwin Procter Advises lynda.com in $1.5B Acquisition by LinkedIn

Founders Workbench loves a successful exit – especially when our Goodwin Procter colleagues are closely involved. Those factors came together recently when GP client lynda.com stole the business news headlines by announcing its $1.5 billion acquisition by online professional network giant LinkedIn. This was a big deal within the startup community. Spending $1.5B to buy […]

Founders Flash: A Most Crafty IPO for Etsy, the Largest-ever B-Corp IPO

Online crafts seller Etsy debuted on Wall Street last week, and The Flash certainly took notice. In addition to the company’s volatile stock movement, The Flash learned a few interesting tidbits about this hot company: Etsy is the largest B-Corp to go through the IPO process, and the company has NEVER turned a profit (and […]

Founders Flash: Silicon Valley startups still searching for leadership diversity, Y Combinator says

The Flash this week looks at statistics released last week by Y Combinator during its semiannual Demo Day, and sees that its startup founders are overwhelmingly white and male. Though the lack of diversity in tech has been well covered, these numbers serve as a reminder of the need for diverse leadership among startup companies. […]

Founders Series: Tax Considerations for Startups

In our initial “Founders Series” post, we examined one of the very first steps to creating a successful company: choosing the legal structure that will best suit the needs of the business and its owners. We now focus on what tax considerations founders should take into account when launching their startups – whether they have opted […]

Founders University: Corporate Governance

Welcome back to Founders University, our core curriculum designed to provide start-up company founders with the basics they’ll need to get their company off the ground. In our first session, we covered the basic differences between a C corporation and an S corporation. For our second session of Founders University, we share an overview of […]

Caine Moss and Emma Mann-Meginniss Offer Founder-friendly Financing Tips to VentureBeat Community

Goodwin Procter attorneys and Founders Workbench contributors, Caine Moss and Emma Mann-Meginniss, recently wrote an article explaining founder-favorable terms to work towards when forming and financing new ventures. Posted to technology news site VentureBeat, the article offers useful tips for founders to consider when negotiating with venture investors in the current hot venture-capital and exit […]