Representing Start-Ups & Emerging Companies

CHAPTER 1: Introduction
§ 1.01 The Start-Up Landscape
[1] Overview
[2] Characteristics of Start-Ups
[a] Innovation-driven
[b] Rapid Growth Potential
[c] High Risk, High Reward
[d] Limited Resources
[e] Flexible and Agile
[f] Small, Passionate Teams
[g] Flat Organizational Structure
[h] Technology-centric
[i] Customer-focused
[j] Uncertain Revenue Streams
[k] Equity-based Compensation
[l] Networking and ecosystem reliance
[m] Exit strategy Orientation
[n] Culture of experimentation
[o] Funding Stages
[3] Key Players in the Entrepreneurial Ecosystem:
[4] Recent Trends in Start-Up Activity
[5] Key Industries and Emerging Technologies
§ 1.02 Defining Emerging Technologies and High-Tech
[1] Overview
[2] Artificial Intelligence (AI) and Machine Learning
[3] Fintech and Blockchain
[4] Internet of Things (IoT)
[5] Information Technology
[6] Other Areas With High Start-up Activity
§ 1.03 - Stages of a Start-Up's Lifecycle
[1] Ideation
[2] Formation
[a] Business Plan
[b] Legal Entity Establishment
[c] Team Building
[d] Initial Product/Service Development
[3] Raising Capital
[a] Bootstrapping
[b] Friends, Family, and Fools (FFF) Funding
[c] Angel Investors
[d] Venture Capital (VC)
[e] Crowdfunding
[4] Growth
[a] Overview
[b] Product/Service Launch
[c] Customer Acquisition
[d] Scaling Operations
[e] Market Expansion
[f] Team Expansion
[g] Conclusion
[5] Exit Strategies
§ 1.04 - Primer on legal and regulatory frameworks relevant to start-ups and emerging technologies
[1] Corporate and Securities Law
[a] Overview
[b] Choosing the Right Business Structure
[c] State Registration Requirements
[d] Corporate Governance
[e] Securities Regulations
[f] Funding and Investment
[e] Conclusion
[2] Employment
[a] Hiring Practices
[c] Compensation and Benefits 
[d] Workplace Policies
[3] Intellectual Property
[4] Patents
[5] Trademarks
[6] Copyrights 
[7] Trade Secrets
[8] Data Security and Privacy
[9] Industry-Specific Regulations
[a] Financial Technology (Fintech)
[i] Banking Regulations
[ii] Anti-Money Laundering (AML) Compliance
[b] Healthcare Technology
[i] FDA Approval Process
[ii] HIPAA Compliance
[c] Artificial Intelligence (AI) and Machine Learning:
[i] Ethical AI Guidelines
[ii] Algorithmic Transparency Requirements
[d] Internet of Things (IoT)
[i] Device Security Standards
[ii] Spectrum Allocation and Wireless Regulations
[e] Autonomous Vehicles
[i] Safety Regulations
[ii] Liability Frameworks
[f] Conclusion
CHAPTER 2: Selection and Formation of the Business Entity
§ 2.01 The Role of Counsel
§ 2.02 Considerations in Selection of Business Entity
§ 2.03 Available Forms of Business Organizations
[1] Sole Proprietorships
[2] General Partnerships
[3] Limited Partnerships
[4] Limited Liability Partnerships
[5] Limited Liability Limited Partnerships
[6] Limited Liability Companies
[7] Corporations
[8] Joint Ventures
[9] Joint-Stock Companies
[10] Business Trusts
§ 2.04 Indemnification and Insurance
§ 2.05 Formation of Business Entity
[1] Corporations
[a] Choice of State of Incorporation
[b] Delaware Corporations
[c] Articles of Incorporation
[d] Bylaws
[e] Organizational Minutes or Consents
[f] Stock Certificates and Issuance
[g] Additional Miscellaneous Requirements
[2] LLCs and Other Partnerships
[a] Considerations for LLCs and Other Partnership Entities
[b] Formation Documents by Type of Partnership
[i] Overview
[ii] General Partnerships:
[iii] Limited Partnerships (LPs):
[iv] Limited Liability Partnerships (LLPs)
[v] Limited Liability Limited Partnerships (LLLPs)
[vi] Tax and Regulatory Considerations:
[c] Certificate of Organization
[d] Operating Agreement
[3] Corporate Transparency Act (Beneficial Ownership Information)
[a] Overview
[b] Entities Subject to Reporting:
[c] Information to Be Reported:
[d] Definition of Beneficial Owner
[e] Timing and Updates:
[f] Penalties for Non-Compliance:
[g] Purpose and Enforcement
[h] Practical Considerations

CHAPTER 3: Introduction to Financing the Business

§ 3.01 Corporate Finance Overview
[1] Introduction
[2] Equity, Debt and Other Financing Arrangements
[a] Overview
[b] Equity Financing
[a] Overview
[b] Pre-Seed Financing
[c] Seed Financing
[d] Startup Financing
[e] Early-Stage or First-Stage Financing
[f] Expansion or Growth Financing
[g] Later-Stage or Buy-Out Financing
§ 3.02 Debt Financing
[1] Overview
[2] Sources of Debt Financing
[3] Bridge Financing
[a] Introduction
[b] Purpose of Bridge Financing
[c] Negotiating and Structuring Bridge Notes
[i] Repayment Terms
[ii] Interest Rates and Fees
[iii] Security and Collateral
[iv] Guarantees
[v] Conversion or Option Rights
[vi] Transferability and Covenants
[vii] Change of Control Provisions
[viii] Default and Remedies
[ix] Principal Amount and Maturity
[x] Interest Terms
[xi] Repayment Terms
[xii] Security and Collateral
[xiii] Conditions for Issuance
[xiv] Use of Proceeds.
[xv] Default and Remedies
[xvi] Registration and Transferability
[xvii] Additional Provisions
[d] Key Terms in Bridge Financing Documents
[i] Mandatory Prepayment Terms
[ii] Convertible Features
[iii] Purpose of the Loan
[iv] Repayment Terms
[v] Security and Collateral
[vi] Conditions for Issuance and Assumption of Debt
[vii] Investor Protections and Rights
[viii] Private Placement Memorandum (PPM)
[4] Sample Bridge Financing Convertible Promissory Note
[5] Sample Security Agreement (Bridge Financing with Secured Promissory Note)
§ 3.03 Government Funding
[1] Overview
[2] State Level
[a] Alabama
[b] New York
[c] Massachusetts
[d] Rhode Island
[e] Connecticut
[f] California
[g] Washington
[h] Iowa
[i] Colorado
[j] Oregon
[3] Small Business Administration (SBA) Loans
[a] Introduction
[b] 7(a) Loans
[c] 504 Loans
[d] Microloans
[e] Disaster Recovery Loans
[4] Other Federal Agencies
[a] Generally
[b] National Science Foundation (NSF)
[c]Department of Energy (DOE)
[d] Department of Commerce
[e] Export-Import Bank of the United States (Ex-Im Bank)
[f] National Aeronautics and Space Administration (NASA)
[g] Department of Agriculture and Department of the Treasury
[5] State Venture Capital Agencies
[a] Overview
[b] Oregon
[c] Florida
[d] Arkansas
[e] Michigan
[f] Connecticut
[g] Illinois
[h] Rhode Island
[i] Iowa
§ 3.04 Strategic Partnering
[1] Introduction
[2] Joint Ventures
[a] Overview
[b] Structure and Contributions
[c] Funding Commitments
[d] Risk Sharing and Financial Support
[e] Ownership and Control
[f] Legal and Regulatory Considerations
[3] Sample JV Agreement
§ 3.05 Securities Laws Considerations for Raising Capital
[1] Introduction
[2] Registration of Securities Under the Securities Act of 1933 and Blue Sky Laws
[3] The Costs and Risks of Registration
[4] What is a Security?
[5] Overview of Statutory and Regulatory Framework
[6] Federal Securities Laws
[7] State Securities Laws
[a] Overview
[b] State Jurisdiction over Offers and Sales of Securities
[c] Raising Capital in States: Non-Public Private Offerings
[d] Categories of State Registration: Public Offerings
[e] Coordinated State Review of Registered Public Offering
[8] Exemptions from Federal and State Registration Requirements
[a] Generally
[b] S.E.C. Rule 506 and the § 4(2) Private Offering Exemption
[c] S.E.C. Rule 504
[d] S.E.C. Rule 1001: The “California Exemption”
[e] S.E.C. Rules 147 & 147A: The § 3(a)(11) “Intrastate” or “Local” Offering Safe Harbors
[f] S.E.C. Rule 701: Exemption for Securities Issued as Compensation
[g] The Uniform Limited Offering Exemption (“ULOE”)
[h] The Uniform Securities Act Exemptions
[i] Overview
[ii] Exempt Securities
[iii] Exempt Transactions
[iv] Accredited Investor Exemptions
[v] State-Specific Exemptions
[vi] Exemptions for Small Issuers and Limited Offerings
[i] Limited Offering Exemption
[j] The Institutional Investor Exemption
[k] The Pre-incorporation Exemption
[l] Existing Security Holder Exemption

CHAPTER 4 – EQUITY FINANCING
§ 4.01 Angel Investors and Venture Capital
[1] Overview
[2] Preparation for Seeking Venture Capital Investment
[a] Identifying Investors, Accelerators and Incubators
[b] Executive Summaries and Business Plans
[c] Preparing Financial Statements and Forecasts
[d] Developing a Pitch
[e] Pre-Investment Checklist (Technology Company)
[f] Financing Presentation Checklist (Technology Company)
[g] Sample Financing Proposal (Technology Company)
[2] The Venture Capital Deal
[a] Angels, Private Venture Capital Firms, and Institutional Investors
[b] Term Sheets and Letters of Intent
[c] Nature and Terms of Security
[d] Venture Financing Agreements
[i] Subscription Agreements
[ii] Investor Rights Agreements
[iii] Restated Certificates of Incorporation
[e] Negotiations, Due Diligence, Closing and Documenting the Deal
[f] Sample Convertible Preferred Equity Term Sheet with Commentary
[g] Sample Down-Round Term Sheet with Commentary
[h] Sample Investor Commitment Letter for Roll-Up Business with Commentary
§ 4.02 Stock Purchase Agreements
[1] Overview
[2] Key Provisions of Stock Purchase Agreements
[a] Covenants of the Parties
[b] Restrictions on Transfer
[c] Notice
[d] Rights of First Refusal and Co-Sale
[e] Representations and Warranties
[f] Survival of Warranties
[g] Conditions to Closing
[4] Accompanying Agreements
[a] Investors’ Rights Agreements
[b] Co-Sale Agreements
[c] Voting Rights Agreements
§ 4.03 Stock Authorization and Issue
[1] Overview
[2] Articles of Incorporation and Initial Authorization
[3] Amended and Restated Certificate of Incorporation
[4] Corporate Approvals of Amendments to the Certificate of Incorporation
§ 4.04 Preferred Stock
[1] Overview
[2] Purpose and Terms of Preferred Stock
[3] Examples of Preferred Stock Conversion and Anti-Dilution Adjustments for Certificate of Incorporation
§ 4.05 Registration and Investor Rights Agreements
[1] Overview
[2] Standard Provisions of Investor Rights Agreements

Chapter 5: Liquidity Events: Initial Public Offerings, Mergers and Acquisitions, Corporate Restructuring and Bankruptcy

§ 5.01 Introduction
§ 5.02 Overview of Exit Strategies and Liquidity Events
[1] Motivations of Entrepreneurs and Investors in Liquidity Events
[2] Types of Liquidity Events
§ 5.03 Initial Public Offerings (IPOs)
[1] Overview
[2] Offering Process
[3] Preparing for Initial Public Offering
[4] Selecting an Underwriter
[5] Liquidating Shares After the IPO
[6] SEC Registration Statement
[7] Disclosure Requirements
§ 5.04 Mergers & Acquisitions
[1] Overview
[2] The M&A Process
[3] Forms of Consideration
[4] Form of Acquisition Structure
[5] Merger Agreements
§ 5.05 Liquidation of Privately-Held Company
[1] Introduction
[2] Out of Court Restructuring and Wind Down
[3] Dissolution
[4] Voluntary Dissolution-Delaware and California
[5] Assignment for the Benefit of Creditors
[6] Bankruptcy
[7] Differences between an ABC and a Bankruptcy
[8] Duties of Officers and Directors

CHAPTER 6: Public Company Responsibilities and Selected Issues

§ 6.01 Public Company Reporting Requirements
[1] Overview
[2] Role of Directors and Officers in Preparing Reports
[3] Drafting Considerations and Liability for Reports
[4] Mandated v. Elective Disclosure
[5] Analyst and Earnings Calls
[6] Annual Report (Form 10-K)
[7] Quarterly Reports (Form 10-Q)
[8] Current Reports (Form 8-K)
[9] Risk Factor Disclosures
[10] Sample Risk Factor Disclosures for Emerging Technologies with Commentary
§ 6.02 Proxy Rules and Requirements
[1] Overview
[2] Proxy Statement
[3] Annual Report
§ 6.03 Corporate Governance Matters
[1] Introduction
[2] Audit Committee Requirements
[3] Whistleblower Protections
[4] Code of Ethics Disclosure
[5] Compensation Committee Requirements
[6] Executive Compensation Issues
[7] Nominating and Corporate Governance Committee Requirements
[8] Prohibitions on Loans to Directors and Officers
§ 6.04 Issues Relating to Owning and Transacting in Company Securities
[1] Foundation
[2] Share Ownership and Transaction Reporting
[3] Beneficial Ownership Reporting
[4] Insider Trading Liability
[5] Prohibition of Short Sales

Chapter 7: Joint Ventures and Strategic Partnering

§ 7.01 In General
§ 7.02 Introduction to Joint Ventures
[1] Definition of a Joint Venture
[2] Elements of Joint Ventures
[3] Benefits of Joint Ventures
[4] Alternatives to Joint Ventures
§ 7.03 Formation of a Joint Venture
[1] Overview
[2] Due Diligence in the Establishment of a Joint Venture
[3] Structuring and Planning the Joint Venture
[4] Drafting a Contractual Joint Venture Agreement
[5] Sample Joint Venture Letter of Intent
[6] Sample Joint Venture Term Sheet
[7] Post-Letter of Intent or Term Sheet Due Diligence Request List
§ 7.04 Relationship of Joint Venturers
[1] Overview
[2] Agent
[3] Fiduciary
§7.05 Property Rights in a Joint Venture
[1] In General
[2] Real Property
[3] Intellectual Property
[4] Conveying Assets to the Joint Venture
[5] Ownership of Intellectual Property Assets Developed During the Joint Venture
[6] Licensing Developed Intellectual Property Assets
§ 7.06 Operating the Joint Venture
[1] Overview
[2] Branding and Marketing Agreements
[3] Business Opportunity Agreements
[5] Supply and Distribution Agreements
[6] Services Agreements
[7] Employees in Joint Ventures
[8] Employee Leasing Agreements
§ 7.07 Joint Venture Exit Strategies
§ 7.08 Sample Joint Venture and Strategic Partnering Agreements with Commentary

CHAPTER 8: Employment and Compensation

§ 8.01 Employment Law Principles and Practical Considerations
[1] At-Will Employment
[2] Employees v. Independent Contractors
[3] Contract Principles Affecting Employment Agreements
[4] Employee Inventions and Work-for-Hire
[5]Drafting and Negotiating Considerations for Employee Compensation and Agreements
[6]Talent Acquisition and Retention in Competitive Industries
§ 8.02 Employment Offer Letters
§ 8.03 Employment Agreements
[1] Standard Provisions of Employment Agreements
[2] Founder Agreements
[3] Key Employee Agreements
[4] Other Personnel
§ 8.04 Stock-Based Compensation
[1] Restricted Stock Compensation Arrangements
[2] Stock Option Arrangements
[3] Employee Stock Ownership Plans
§ 8.05 Non-Qualified Deferred Compensation
§ 8.06 Qualified Deferred Compensation Plans
§ 8.07 Fringe Benefits
[1] Accident, Health and Life Insurance Plans
[2]Nonstatutory Fringe Benefits
§ 8.08 Retention Agreements
§ 8.09 Restrictive Covenants
[1] Introduction
[2] Overview of Nondisclosure, Noncompetition, and Nonsolicitation Agreements
[3] Choice-of-Law Provisions
[4] Enforceability
[5] Reasonableness Requirements
§ 8.10 Employee Handbook and Company Policies
[1] Introduction
[2] Employee Handbooks and Handbook Acknowledgement
[3] Confidentiality Policies and Agreements
[4] Wage and Hour Policies
[5] E-Mail and Technology Policies
[6] Workplace Privacy
[6] Ethical Standards and Conflicts of Interest
[7] Whistleblower Policies
[8] Artificial Intelligence Policies
Chapter 9: Intellectual Property & Technology 
§ 9.01 Intellectual Property Rights
[1] Overview
[2] Patents
[3] Copyrights
[4] Trademarks
[5] Trade Secrets
[6] Right of Publicity
[7] Mask Works
§ 9.02 Developing an IP Strategy and Protection Program
[1] Foundation
[2] IP Audits & Developing an IP Docket
[3] Understanding How IP Relates to the Business Model of the Company
[4] Obtaining and Maintaining IP Protection
[a] Overview
[b] Patent Prosecution and Maintenance
[c] Copyright Registration
[d] Trademark Registration and Maintenance
[e] Prioritizing High Value IP Assets
[5] Portfolio Management
§ 9.03 Patent Considerations
[1] Overview of What to Consider
[2] Employee Invention Assignments
[3] Preventing Premature Invention Disclosure
[4] Inventor Interviews and Invention Disclosure Forms
[5] Freedom to Operate
[6] Understanding the Competitive Patent Landscape for the Company
[7] Patent Marking
§ 9.04 Copyright and Trademark Considerations
[1] Legal Frameworks for Understanding Copyright and Trademark Law
[2] Copyright Ownership and Work for Hire
[3] Trademark Clearance Searches
[4] Rights Clearance
[5] Trademark Use Guidelines
[6] Copyright and Trademark Notices
§ 9.05 Trade Secret Considerations
[1] Legal Framework Surrounding Trade Secrets
[2] Maintaining Secrecy
[3] Confidentiality and Nondisclosure Agreements
§ 9.06 Leveraging IP Assets 
[1] Introduction
[2] IP Licensing and Assignment
[3] IP as Collateral
[4] IP in Bankruptcy
§ 9.07 IP & Technology Licensing
[1] Overview of Key Aspects
[2] Benefits and Risks of Licensing IP
[3] Key Terms in IP License Agreements
[a] Representations and Warranties
[b] Scope of License and Field of Use Provisions
[c] Quality Control Measures in Trademark Licenses
[d] Royalties or Other Consideration
[e] Exclusivity and Effect of Exclusivity on Licensees Rights
[4] Standard-Essential Patents and FRAND License Terms
[5] Technology Transactions
[a] Overview
[b] Software
[c] Software-as-a-Service
[d] OEM and VAR Agreements
[6] Antitrust Issues in IP Licensing
[7] Cross-License Agreements and Settlement of IP Disputes
§ 9.10 Policing and Enforcement of IP Rights
[1] Overview
[2] Monitoring for Infringement
[3] IP Litigation
CHAPTER 10: Data Security & Privacy
§ 10.01 Definitions and Principles of Data Security & Privacy
[1] Defining Data Security
[2] Defining Data Privacy
[3] Personal Information
[4] Fair Information Practice Principles
[5] Privacy by Design
§ 10.02 Data Security & Privacy Laws
[1] Overview
[2] Representative State Privacy Laws
[a] California Consumer Privacy Act of 2018 (CCPA) and the California Privacy Rights Act of 2020 (CPRA)
[b] Illinois Biometric Information Privacy Act (BIPA)
[c] Washington's My Health, My Data Act
[3] State Data Breach Notification Laws
[4] State Data Broker Laws
[5] Representative Federal Privacy Laws
[a] Gramm-Leach-Bliley Act (GLBA)
[b] Fair Credit Reporting Act (FCRA)
[c] Health Insurance Portability and Accountability Act (HIPAA)
[6] International Privacy Laws
[a] General Data Protection Regulation (GDPR)
[b] Legal Obligations
[c] Compliance Requirements
[d] Potential Legal Risks
[e] Practical Considerations
§ 10.03 Developing a Data Security & Privacy Compliance Program
[1] Overview
[2] Data Mapping: Understanding How the Company Collects and Uses Personal Data
[3] Privacy Impact Assessments
[4] Privacy Policies
[5] Responding to Consumer Rights Requests
[6] Documentation and Demonstrating Compliance
[7] Employee Policies and Training
[8] Vendor Due Diligence
§ 10.04 Cybersecurity Frameworks and Best Practices
[1] Introduction
[2] National Institute of Standards and Technology (NIST) Standards
[3] Service Organization Controls (SOC) 1 and 2
[4] International Standardization Organization's Standard 27001
[5] Center for Internet Security's (CIS) Cybersecurity Standards
§ 10.05 Data Incident Response and Notification
[1] Introduction
[2] Data Breaches
[3] Ransomware Attacks
[4] Response Management Team
[5] Tabletop Exercises and Preparedness
§ 10.06 Cross-Border Data Transfers
[1] Overview
[2] EU-U.S. Data Privacy Framework
[3] Standard Contractual Clauses
Chapter 11: Corporate Compliance Considerations for Technology Companies
§ 11.01 Introduction to Compliance Considerations
§ 11.02 Antitrust Considerations
[1] Developing an Antitrust Compliance Program
[2] Company Policy Regarding Compliance with the Antitrust Laws
[3] Employee Training and Reporting Requirements
[4] Hart-Scott-Rodino Act Premerger Notification 
§ 11.03 Foreign Investment in the United States
[1] National Security Concerns
[2] Reporting Requirements
[3] The Exon-Florio Amendment to the Defense Production Act of 1950 (Exon-Florio)
[4] Exon-Florio Notices
§ 11.04 Foreign Operations by U.S. Companies
[1] Introduction
[2] Anti-Bribery and the Foreign Corrupt Practices Act
[3] How to Implement an Effective FCPA Compliance Program
§ 11.05 International Trade and Import-Export Law
[1] Overview
[2] Laws Governing International Trade
[3] Protections Against Infringing Imported Goods
[a] International Trade Commission
[b] U.S. Customs and Border Protection
[4] Export Controls
[a] Overview of U.S. Export Control Regimes
[b] Implementing an Export Control Compliance Program
§ 11.06 Advertising & Marketing
[1] Introduction to Compliance Considerations
[2] Federal Trade Commission Enforcement of Unfair or Deceptive Business Practices
[3] Consumer Protection Laws
[4] Telephone Consumer Protection Act (TCPA)
[a] Overview of the TCPA
[b] Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act
[c] Children's Online Privacy Protection Act (COPPA)
[5] Rights Clearance
§ 11.07 Domain Names
[1] Overview
[2] Registering Domain Names
[3] Domain Name Disputes
[a] UDRP and URS Proceedings
[b] Anticybersquatting Consumer Protection Act (ACPA) Actions
§ 11.08 Blockchain and Cryptocurrency
[1] Overview of Challenges to Compliance
[2] Regulation of Digital Assets
[3] Intellectual Property Considerations for Blockchain Technologies
§ 11.09 Artificial Intelligence (AI) and Machine Learning (ML)
[1] Introduction to the Impact to Corporate Compliance Considerations for Technology Companies
[2] Legislative and Regulatory Landscape for AI and ML
[a] Overview
[b] Algorithmic Bias
[3] Intellectual Property Considerations for AI and ML
[a] Overview
[b] Human Authorship Requirement for Copyright Registration
[c] Patentability of AI-Assisted Inventions
[d] Intellectual Property Disputes Concerning AI Model Training