George Grellas's Answers

Selling a business? What's the legal perspective?

From the FAQ section of my website: "A small business is normally sold by asset sale, stock sale, or merger, with asset sale being the overwhelming vehicle of choice for most small businesses. Sometimes this can be done via a basically canned process by listing through a business broker who will work as appropriate with others to provide for all the formalities. In that case, you get a homogenized process that may or may not suit your needs. Best is to get legal or accounting advice on...

3 people marked this answer as helpful

How does a person who starts a business and seeks seed capital keep from getting diluted?

By definition, an investor who puts money into your company will get some equity interest and so you can never avoid some dilution unless you use debt financing. A typical startup business will issue cheap stock at inception to its founders and will then use a higher valuation at a later phase to take in investor money while attempting to reduce the dilutive hit. If you invest $100K at the start, and you are the sole investor, you would place a market cap on the company of $100K. If you then...

1 person marked this answer as helpful

Things to look for when choosing a lawyer for a startup~

The answers given already by Mr. King and Mr. Michelen are good ones covering the broader issues you should consider. I would just add this: make sure your lawyer understands the distinctive aspects of a startup on formation. If you have a typical Silicon Valley tech startup, this is how I describe these distinctive aspects in a FAQ section on my website (addressed to a California audience): "A 'startup' business, as that term is used in Silicon Valley parlance, does indeed differ from a...