Why start-ups shouldn't skimp on IP documentation

By Robert G. Schwartz on April 25, 2013

You run a technology company. Imagine for a moment that I am a prospective investor or buyer of your company. As I perform my due diligence, among a lot of other questions, I want to find out if I can trust your intellectual property chain of ownership. By that I mean, can I trace a contractual link between your company and all the sources of the technology that you use and distribute, and can I verify that you haven't given away ownership or destructively broad rights to someone else?

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Two places a start-up shouldn't skimp documentation

By Robert G. Schwartz on April 18, 2013

Here’s a story you might have heard before. Fantastic Start-up, Inc. built a nice little business, from two founders and no revenue to 37 employees, 20 paying customers and revenue of $3.8 million last year. It took four long, hard years to get here, but now a VC firm wants to invest, and Fantastic Start-up could do some good things with that money. Due diligence started last week. And it doesn’t seem to be going all that well.

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Restricted Stock Basics

By Robert G. Schwartz on March 25, 2013

Restricted stock is a common way that companies put equity in the hands of their employees. Like stock options, the employee receives a grant (also called an award) from the company, in most cases he doesn’t pay anything for the grant, and usually it vests over time. But there are important differences between stock options and restricted stock. What is restricted stock? Restricted stock is shares of a corporation, issued by the company to a service provider (an employee, director, consultant, advisor or other person), with restrictions on transfer and a risk of forfeiture until specified vesting conditions are met.

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New Studies Show Wind Turbine Syndrome is Psychological

By Eric J. Krathwohl on March 22, 2013

Everyone knows what a NIMBY is and everyone in the renewable space knows what BANANA means (Build Absolutely Nothing Anywhere Near Anything), but here's a new one: "Nocebo." It's the opposite of placebo. Just as science has established the existence of a placebo effect -- thinking yourself out of an illness on the belief you're taking effective medicine, when you're taking a pill with no more curative properties than a piece of cereal -- so science has shown the opposite.

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How are stock options taxed?

By Robert G. Schwartz on March 15, 2013

As explained in an earlier blog entry ("ISOs and NQSOs - What's the difference?"), the U.S. federal tax code recognizes two types of stock options: "incentive stock options" ("ISOs") and "non-qualified" stock options ("NQSOs"). How are they taxed? The best way to understand the difference is to start with a basic tax model, which applies to NQSOs.

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