The High-touch Legal Services® Blog…for Startups!

© 2009-2017 Dana H. Shultz, Attorney at Law

Kickstarter Limits Foreign Entrepreneurs

Kickstarter logoKickstarter is a funding platform for creative projects. Recently, I have seen a surge of interest among foreign companies wishing to set up Kickstarter projects in the US. This post discusses the challenges those companies will face.

Kickstarter Creator Requirements

Kickstarter states the following concerning Who can use Kickstarter (updated November 24, 2017): (more…)

WSJ: Angel Investors are Getting Harder to Sell

WSJ.com logo

In an article published today (Chasing the New Angel Investors), the Wall Street Journal discusses why entrepreneurs must work ever-harder to persuade angel investors to invest.

According to the article, although seed and startup angel investment has increased, there are several reasons why that money is more difficult to attract:

  • Since the recession, many angels have become more demanding, looking for proof of marketplace acceptance rather than a hunch that it exists.
  • Angel groups, which syndicate deals among their members, have a more-formal review process that may involve discussions by dozens of potential investors.
  • With less venture capital available, angels are more concerned about whether a company can grow to profitability or a successful exit.

The article’s advice for entrepreneurs: Have something to show, know your business thoroughly, and polish your pitch.

Dana H. Shultz, Attorney at Law? +1 510 547-0545? dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.

Attention Entrepreneur: Have You Planned Your Estate?

I frequently talk to individuals who are about to start new businesses. Sometimes, our conversation reveals that the nascent entrepreneur is:

  • Age 30-something,
  • Married, and
  • Parent of a young child, or has a first child on the way.

When I learn this, I immediately ask, “Have you done any estate planning?” The answer invariably is “No.”

(more…)

WSJ: Entrepreneurs Turn to Peer-to-Peer Loans

WSJ.com logo

In an article yesterday (“Peer-to-Peer Loans Grow”), the Wall Street Journal discussed increasing use of peer-to-peer lending sites such as Prosper and Lending Club by small-business owners.

The reason such use is increasing: During and since the financial crisis, small businesses have had a difficult time obtaining bank loans, and the loans that they can obtain often have unfavorable terms.

How peer-to-peer lending works: The borrower pays the site a fee. The site analyzes the borrower’s creditworthiness, sets an interest rate accordingly, and posts the loan. Investors anonymously invest small amounts – less than $1,000 – in loans that interest them. As each loan payment is made, each investor receives his or her portion. Because the site has low overhead, borrowers pay a lower interest rate that they would to a bank; in turn, investors receive a higher return than they would from many other investments.

The sites are regulated by the Securities and Exchange Commission. As a result, they issue prospectuses that highlight the risks of using the sites. For example, the Prosper Prospectus includes more than 20 pages of risks related to borrower default, Prosper’s ability to service the notes, and the like.

Perhaps most important, in the event of a? default, the lenders cannot go after the borrower directly. As a result, lenders should be prepared to lose the entire amount of their investments. However, with default rates of less than three percent, peer-to-peer lending can make sense for investors who spread their money in small chunks among many loans – and it makes a huge amount of sense for borrowers who cannot obtain money elsewhere.

Dana H. Shultz, Attorney at Law? +1 510 547-0545? dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.

You May Not Need a Lawyer (Yet)

U.S. Small Business Administration logo

A few days ago, a first-time entrepreneur contacted me, asking that I advise him on such issues as employees vs. independent contractors, equity compensation, and the like. As we exchanged e-mails, however, I could see that there were fundamental business issues to which he had not given sufficient consideration. (more…)

Can I Get an H-1B Visa Working for My Own Company?

Logo of U.S. Citizenship and Immigration Services, which issues the H-1B visa

I have written about opportunities for foreign entrepreneurs who wish to obtain U.S. work visas. (See Visa Basics for Foreign Entrepreneurs Coming to the U.S., Visa Basics for Foreign Entrepreneurs, Part 2: What Constitutes Work?) This post focuses on a particularly interesting aspect of this issue. It asks whether and how a foreign entrepreneur can form a corporation in the U.S. and, then, obtain an H-1B visa to work for that corporation.

(more…)

Visa Basics for Foreign Entrepreneurs, Part 2: What Constitutes Work?

Seal and tagline for the United States Citizenship and Immigration Services

In Visa Basics for Foreign Entrepreneurs Coming to the U.S., I discussed certain immigration statuses (visa waiver, B-1 and H-1B visas) that permit a non-resident alien to take a passive role in a business (such as forming it) but not to work for it. This post discusses the boundary between permissible passive activities and prohibited work.

(more…)

Top Ten Intellectual Property Mistakes of Startup Entrepreneurs

The document Top Ten Intellectual Property Mistakes of Startup Entrepreneurs is available as a Free Download on the Downloads page.

Here are the ten mistakes that are discussed:

  1. Failing to use employee invention agreements
  2. Assuming that the company owns contractors’ work product
  3. Using another company’s license agreement
  4. Thinking that patents are the only IP that matters
  5. Filing a for provisional patent before the scope of the invention is clear
  6. Treating the federal government like non-governmental infringers
  7. Neglecting to identify and protect trade secrets
  8. Believing that “open source” means “no restrictions”
  9. Giving the “family jewels” to an overseas supplier
  10. Registering the wrong entity as the owner of IP

Related post: The Top Ten Legal Mistakes of Startup and Early-stage Companies

Dana H. Shultz, Attorney at Law  +1 510 547-0545  dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.

How to Avoid Corporate Guarantees

Startup and early-stage entrepreneurs often are pressured to provide personal guarantees for their companies’ obligations. Presser & Goldstein, LLC in Boca Raton, Florida has posted Avoiding Corporate Guarantees, which discusses how business owners can avoid or limit personal guarantees.

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.