Ian has over thirty years experience representing technology and other growth companies on an extensive array of business matters. You will be hard pressed to find anyone anywhere close to approaching his level of experience and ability. We have referred multiple matters to Ian – generally where there has been a conflict or where a client has needed sophisticated legal services but could not justify paying big-firm rates – and have never been disappointed.
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!
Former VP and General Counsel, Atmel Corporation
Three Pricing Models
I’m available on an hourly basis ($500/hr) for specific projects,
Or on a monthly retainer basis, with different levels of retainer (see below),
Or as an early-stage startup you can also get just the services you need with flat fee pricing (check it out! It’s a great deal).
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.
What is included?
My flat fee services include 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 only for what you need.
Not everyone will need all of the services, but I list them all in order that you can evaluate the various costs and make informed decisions.
What is not included?
Legal questions which are unrelated to those covered by the specified legal services.
If you have other needs for corporate or commercial guidance, I will be happy to help. You can decide whether to proceed with me, and if so on a time basis or on a retainer basis (see below).
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.
Info for Early-Stage Startups
These flat rate services are for early stage start-ups from formation until the first round of VC financing or other professional financing.
I’d happily handle that for you too, but most VCs prefer to have their start-ups use law firms which they are familiar with (for you, that could be a mixed blessing!)
Flat rate fees do 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 hourly rate for that too.
$1500
(N.B third party costs, such as state filing fees, agent for service of process fees, minute book and share certificates are additional)
(up to three individual contracts)
Details
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.
Details
(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.
Details
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.
Details
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.
Details
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.
(up to three)
Details
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.
Details
These include routine: licenses in or out; Supplier Agreements; Product Sales; other 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 $2,500 each. But remember, significant negotiating and rewriting will add to the ptice.
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.
Ian Stock
In addition to flat rate fees I’m available on an hourly basis ($500/hr) or on a slightly discounted monthly retainer (see below).
Basic
Support- In-person meetings
- Support via phone, Skype, email, text, Slack, etc.
- Document prep and review
- Corporate Compliance
- Tech Transactions
- Joint Ventures
- M&A
- Financing
Extended
Support- In-person meetings
- Support via phone, Skype, email, text, Slack, etc.
- Document prep and review
- Corporate Compliance
- Tech Transactions
- Joint Ventures
- M&A
- Financing
Platinum
Support- In-person meetings
- Support via phone, Skype, email, text, Slack, etc.
- Document prep and review
- Corporate Compliance
- Tech Transactions
- Joint Ventures
- M&A
- Financing