Many entrepreneurs exploring funding options ask whether equity crowdfunding is a viable choice. The answer, as with most legal questions, is “it depends.” Equity crowdfunding gained traction with the Jumpstart Our Business Startups Act (JOBS Act) in 2012, which allowed companies to raise capital from the public without the need for costly SEC registration. However, despite the promising opportunity, this funding approach comes with benefits, regulatory requirements, and significant limitations.

One common question from founders is whether they can include non-accredited investors—like friends or family—when raising capital. The quick answers are: “It’s possible, but complicated,” and “You generally shouldn’t unless you’re prepared for the added compliance burden.” Let’s dive into why raising funds from non-accredited investors can be challenging and what regulations apply.

I get frequent questions from founders navigating convertible debt for the first time. Convertible debt can be an excellent financing tool, but it’s also complex and nuanced. Here are some of the questions I’m most often asked. Feel free to reach out if there’s something you’d like me to add!

Convertible debt is a popular fundraising tool for early-stage companies, offering a flexible way to raise capital without immediate valuation pressures. It combines elements of both debt and equity, providing investors with a note that typically converts into equity upon the company’s next qualifying financing round. Here’s a breakdown of the key features and considerations for startups considering convertible debt.

Incorporating your business is a milestone, but it’s just the beginning. Once you’ve established your company as a Delaware corporation (or other entity), there are essential next steps that will set your business up for future growth, investment, and compliance. Here’s a checklist to guide you through the critical actions to take after incorporation.

For startups, offering equity to key contributors—whether employees, consultants, or advisors—can be a powerful tool for attracting talent and fostering long-term engagement. However, deciding whether to grant stock or stock options involves strategic considerations, as each has distinct legal, financial, and tax implications. This article provides a comprehensive overview of the differences between stock and options, helping companies make informed choices that align with their goals and establish a clear ownership culture.

For many US startups, stock options are a crucial tool for attracting and retaining talent, incentivizing employees, consultants, and advisors. However, issuing options comes with intricate legal and tax considerations, and missteps can lead to costly complications. Here are five common pitfalls that US companies encounter in the process of granting stock options—and strategies to avoid them.

For many startups, attracting experienced advisors is an essential step in building expertise and credibility. Advisors bring unique business and technical insights, often lending their time in exchange for equity through option grants. However, structuring these grants effectively can be nuanced, balancing the interests of both the advisor and the company. Here’s a look at some important factors to consider when setting up advisor option grants.

This glossary serves as a comprehensive resource for founders, investors, and anyone involved in business and legal transactions. Each term is defined with detailed explanations, clarifying its role in corporate governance, venture financing, intellectual property management, and regulatory compliance. While some of these terms may be familiar, others are specific to niche areas like securities law, anti-dilution mechanisms, and fiduciary duties, each carrying significant implications for business strategy and legal obligations.