Startup A La CarteTM Flat Fee Legal Services for Startup Founders

(So You Can Focus on Your Product and Your Team!)

Ian provided things like organizing documents, shareholder agreements, and option plans exactly when my business needed them. Ian’s approach meant my company got the benefit of top-notch legal services provided by a lawyer with experience in big-name firms, without the big-name price tag.

Jeremy Neuner

Founder, NextSpace (Currently at Google)

Companies I've Worked With

Reserve Your Free Consultation!

Enter your details and I will be in touch to schedule a convenient time for an initial consultation. Our initial discussion will be fact finding so I can suggest the right plan or services, not free legal advice!

My Central Goals

Savings

Offer clients substantial savings relative to traditional law firms

Clarity

Demystify legal services for my clients and anyone else who is interested

International

Help start-ups from outside the US set up shop in Silicon Valley
“Ian Stock negotiated and brought to a successful conclusion the crucial marquee customer contract that my telecoms equipment startup needed to achieve recognition in a tough market. I remember breathing a sigh of relief. As CEO, I appreciated Ian’s responsiveness as much as his excellent work.” Dean Hamilton

Founder, President and CEO, CoSine Communications (now at Jektr)

The Startup Adventure!

Start-ups are an adventure, an exciting voyage into the new and different. The journey unfolds in a multitude of different ways, but here are some basic components the early-stage startup’s life. Each requires mindful planning and execution, and I have helped many founders with all of them over the years.

Why Flat Rate Fees?

Understanding the legal landscape and costs of starting a business can be a daunting undertaking.

Unfortunately, all that you can typically find out about it is that it is complex and of course costly. How costly? Well, very!

That isn’t right. It should be easy to figure out which legal services your early-stage startup will need and how much they will cost.

Based on years of working with hundreds of entrepreneurs who have started dozens of companies, I’ve developed these flat rate fee services to resolve that problem.

I call them the Startup A La CarteTM  suite of legal services.

 

What is included?

Startup A La Carte,TM includes all the necessary legal components to incorporate your business and position you the founders and your Team for success. Services are priced separately – you pay for each as you need it in advance. Not everyone will need all of the services, but we list them all in order that you can evaluate the various costs and make informed decisions.

More on what is and is not included.

I will do my best to answer any legal questions that founders may have which are unrelated to those covered by the specific Startup A La CarteTM legal services. In other words, founders will not have more legal fees to pay me on top of these specific services while they are using Startup A La CarteTM modules.

But this only applies to you, the founders. If other members of your team can call me without charge, I will be quickly buried under a mound of questions that may or may not need answers. I count on you founders to ensure that I only address your serious concerns.

Please bear in mind that I don’t know it all, and will need to refer you elsewhere, e.g. for tax advice, to a litigator in the unlikely event that you get involved in a lawsuit, or to make patent applications.

 

Just for Early-Stage Startups

Startup A La CarteTM covers an early stage start-up from formation until the first round of VC financing or other professional financing. I’d happily handle that for you too at my regular low hourly rate, but mostly VCs prefer to have the start-up use law firms which they are familiar with.

Startup A La CarteTM does not cover an exit, if you’re lucky enough to get one that early in your start-up’s life. But I’m available at my regular low hourly rate for that.

Startup A La CarteTM Pricing

Startup A La CarteTM includes all the necessary legal components to incorporate your business and position you the founders and your Team for success.

Services are priced separately – you pay for each as you need it in advance.

For work to start you also need to complete and sign our engagement letter. That’s it!

$600

Organization of your Delaware corporation

(additional fees to states apply)

Details...

No messing around wasting your time and money in a long analysis of what type of entity you need.

If you’re looking to give equity to contractors or employees, or to raise money from VCs eventually, you need a Delaware corporation. Simple.

Organizing your Delaware corporation involves walking you through and preparing the following:

(i) Action by Sole Incorporator – transitional document

(ii) Certificate of Incorporation, or Charter – the public statement of your corporation’s formation, which I will have filed with the Secretary of State’s office. As you will normally be physically based and doing business outside Delaware, I will also have filed with the Secretary of State of your physical location a Qualification to do Business in that State. The major disbursements are HERE!

(iii) By-laws – your corporation’s private operating rules. Most is boiler plate: I will walk through your key choices with you

(iv) Initial Board actions, taken by unanimous written consent. Again, I will walk through your key choices with you

(v) Founder’s investment letter – formality clarifying restrictions under securities laws on what you can do with your stock even if you are a founder.

Note: the basic fees of incorporating in Delaware and qualifying in your home State run from $1200 to $1800, depending on the State.

$1200

Initial Intellectual Property Protection and Contractor Relations

(up to five individual contracts)

Details...

These contracts implement your initial IP protection, and also your initial relationships with contractors and other third parties

(i) Mutual Non Disclosure Agreement, or NDA, which protects your trade secrets, as well as those of the people you’re dealing with. You can make this “one-way,” meaning that only your start-up’s confidential information is protected, but anyone experienced with her own IP on the other side will want a mutual NDA.

(ii) Consulting Agreement with an independent contractor, including a mutual NDA and a Proprietary Information and Innovation Assignment Agreement. The latter seeks to ensure that your company, the entity paying for the contractor’s services, obtains their benefit in terms of any intellectual property resulting from those services

(iii) Offer Letter for employees, and related Invention Assignment Agreements. Early stage start-ups are not always in a position to begin employing people right away, because of the administrative and financial burdens of doing so relative to engaging independent contractors. If you do, Offer Letters and related Proprietary Information and Innovation Assignment Agreements come with the package.

$2400

Founder Restricted Stock Purchase Agreements

(up to three contracts)

Details...

These complicated agreements perform a simple and necessary function.

If you have two co-founders, you may well wish to share the initial equity in your corporation equally among the three of you. All very fair and balanced.

But what happens if one of you loses interest, or finds an alternative path that interests him more, in other words, what happens if one of you leaves?

It happens all the time, and is only unfair if the departing founder keeps all her stock despite leaving while the others work on for months or even years without her. Where does the equity come from for the person who assumes her functions?

A Restricted Stock Purchase Agreement fixes this problem essentially by having each founder’s shares vest over time. Again, simple to state, difficult to implement. For example, the shares are deposited in escrow during the vesting period, and a neutral escrow agent needs to be appointed.

Stock Certificates will be created for each Founder.

Section 83(b) election. Very important. Must be filed with the IRS by each founder within 30 days of purchasing restricted stock. Don’t blow this one! If you do, it can’t be fixed.

State “blue sky” filing. In California, Section 25102 (f) filing.

I will walk you through both the contacts and the logistics of implementing them.

$1800

Shareholder Agreement among Founders

Details...

Founders make a deal with each other. They typically know each other, and have some idea of each other’s respective strengths and weaknesses.

This Shareholders Agreement ensures that their deal is only changed if they all agree.

If one founder receives an offer for her shares, she can only accept it if her co-founders agree or if her buyer also agrees to buy their shares.

No founder can replace herself without the agreement of her co-founders. They are dealing with her, and may not share her enthusiasm for her replacement.

These sorts of issues need to be regulated. The human element often brings down even the best ideas with the most hard-working team. No-one can remove all of the risks of the human element, but some important ones are taken care of by the Shareholders Agreement.

$3000

Stock Option Plan

(up to five option agreements)

Details...

The Stock Option Plan (now often called an Equity Incentive Plan) is what enables you to share in your start-up’s eventual upside with contractors, employees, even members of your Board of Directors.

Just as the upside is not guaranteed, neither is the exit which enables your people to share in it. Unless your start-up is going to achieve a FaceBook or Tesla level of success, the gain in options will only be realized when your company is acquired or experiences an initial Public Offering, or IPO. Long odds.

In some ways, those are the same odds that you founders face, and to that extent you are all in the same boat.

Even though the return on options is far from assured, tradition says that an early stage start-up conserves cash by granting employees and others options instead of full salaries.

Here are the basic steps in implementing an Option Plan.

(i) First, the existing shareholders need to consent to and approve the Plan, and in particular the number of shares that will be in the initial option pool. The shareholders need to be onboard, because the Plan “uses” the corporation’s shares into which the options may be exercised. In other words, because it dilutes the shareholders. It is a good idea to adopt the Plan before much time passes, because only the Founders are shareholders early
In the corporation’s life. As more people become shareholders, more people need to agree to the Plan.

(ii) The Equity Incentive Plan itself is prepared in accordance with the shareholders’ wishes. For the price that i am offering, it will not have all the bells and whistles that big law firms include. Rarely used, they offer little benefit to the Corporation. The Plan will enable grants of options and stock purchase rights.

(iii) The Board too approves the Plan, and grants options in accordance with it. This package includes a Board consent to the grant of options to up to five people, which will serve as a model for future grants. All grants are made by the Board during the early stages of a Corporation’s life. The key action taken by the Board here is valuing the corporation, because the exercise price of the options must be based on an accurate valuation.

(iv) A form of Option Agreement will be prepared, and tailored to the initial grants. We will collectively decide on vesting schedules and the like. These agreements are themselves somewhat complex, because they include documents to be signed upon exercise of the options.

(v) A simple form of option tracker will be prepared. As the number of grantees increases over time, keeping track of how many options are outstanding involves keeping track of both new grants and retired options. Options are retired when their grantee terminates service for the Corporation.

(vi) Follow-on administrative work, like a State Blue sky filing covering the shares in the Plan.

$4200

Friends and Family Financing – Convertible Notes

(up to five)

Details...

If you’re not bootstrapping yourself, or even if you are, the first place you look for third party financing is with your friends and family. Makes sense. They trust you and want to support you, and you trust them and will do all that you can to make them proud.

The one area which used to be difficult in friends and family financing was valuing the company. If they were putting in $100K collectively, did that give them 2%, 10% or 25% of the company? To put it another way, was the company worth $5 million, $1 million or $400K? Precisely because of the close personal relationship between those bargaining, the agreed valuations were notoriously unreliable.

Enter convertible notes. Essentially these defer the valuation decision until more professional investors are involved. They have no problem fighting it out with the founders, and neither side has any reserves based on their personal relationships.

Friends and Family initially loan the corporation money, on favorable terms, and with no meaningful security of being repaid. The loan converts into equity when a professional financing occurs, at a predetermined rate which gives friends and family more shares for their buck than the later investors. The investors accept that disparity because friends and family took more of a risk by investing earlier.

Doing a convertible note deal involves:

(i) deciding whether the investors will have a rep on the Board. Normally, friends and family do not feel competent to assume such a role. But at times, someone wants to. To be discussed

(ii) a Note Purchase Agreement covering the sale of the Notes by the corporation to participating friends and family. This needs to alert the investors to some risks of the corporation, although the fact that it’s an early-stage start-up makes the whole investment very risky. To be discussed. This is signed by all investors and the corporation

(iii) the Convertible Notes themselves made by the corporation to each investor

(iv) some form of Investor Rights Agreement. What’s in here depends to some degree on the status of the corporation, but the basic functions of this Agreement are similar to those of the Shareholders Agreement described above

(v) Board minutes approving the deal, and in particular the terms of the Notes. Various administrative formalities, including creating the stock certificates and State “blue sky” filings.

$1200

Supplier and Customer Deals

(per deal)

Details...

These include licenses in or out, Supplier Agreements, Product Sales, the range of tech transactions. You may not have a lot of them as an early stage start-up, but hopefully you’ll have a few, and I’ll do my best to keep them to $1,200 each.

$0

Other Things

(filling in the gaps)

Details...

1. Advisory Board. If you elect to have an advisory board, people in the fields in which your start-up operates whose brains you can pick, we can go over how to compensate them (normally options) and for what services that they will offer.

2. Fill in the gaps. Within reason!

I represent you, the founders, because you are the engine of the start-up economy.

I love what YOU are doing!

I can help you sort out the relationships among founders in a way that ensures that each is treated comparably.

I can handle start-up financing, from friends and family rounds through VC rounds, and from convertible notes through preferred stock.

I can help you with your technology transactions, with customers, suppliers, licensors and licensees.

I can help you with the internal relationships with the Board, an Advisory Board, your employees and your independent contractors.

If you are from outside of the US, I can use my international experience and Silicon Valley knowledge and connections to make your life easier.

And I don’t cost the earth. My rates are very reasonable and if I can assign your work to a paralegal, I will!

Ian Stock

Founder, Entreprelaw

Plans & Pricing

In addition to flat rate fees I’m available on an hourly basis ($350/hr) or on a slightly discounted monthly retainer (see below).

In all cases, I’ve made it easy for you to sign up with a credit card and get the level of service you need and no more. Cancel anytime.

Basic

Support
$600/mo
  • In-person meetings
  • Support via phone, Skype, email, text, Slack, etc.
  • Document prep and review
  • Corporate Compliance
  • Tech Transactions
  • Joint Ventures
  • M&A
  • Financing
PURCHASE

Extended

Support
$2000/mo
  • In-person meetings
  • Support via phone, Skype, email, text, Slack, etc.
  • Document prep and review
  • Corporate Compliance
  • Tech Transactions
  • Joint Ventures
  • M&A
  • Financing
PURCHASE

Platinum

Support
$6000/mo
  • In-person meetings
  • Support via phone, Skype, email, text, Slack, etc.
  • Document prep and review
  • Corporate Compliance
  • Tech Transactions
  • Joint Ventures
  • M&A
  • Financing
PURCHASE

Reserve Your Free Consultation!

Enter your details and I will be in touch to schedule a convenient time for an initial consultation. Our initial discussion will be fact finding so I can suggest the right plan or services, not free legal advice!

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