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Alex King

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RE: Self-Angel-ing in our new venture

Posted By Alex King 02-21-2024 12:32
Found In Egroup: Founders Lounge \ view thread
@Deborah Charych As an upfront disclaimer, what I write below is not legal or tax advice. You are strongly encouraged to seek the input of an attorney and tax professional you've hired to guide the process. You don't often see founders in a position to lead their first-priced rounds, so there ...

RE: Self-Angel-ing in our new venture

Posted By Alex King 02-21-2024 10:56
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Hi @Deborah Charych Am I interpreting this correctly in that you will personally lead the priced round and act as the largest investor, or are you saying you'll put in some money, but more importantly, you hope to set the terms by sourcing non-VC investors? ------------------------------ Alex ...

RE: Specifying the number of ISOs that can be issued

Posted By Alex King 01-10-2024 12:34
Found In Community: Carta Collective \ view thread
@Chris Hoffmann DISCLAIMER: This is not legal advice. No reader should act or refrain from acting based on what is said below. Each reader should consult an attorney as each situation is different, and what is said below may not be applicable. We typically see this handled as such. The Plan will have ...

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 12:27
Found In Egroup: Carta Collective \ view thread
With our time almost up, I wanted to thank everyone who participated. Don't hesitate to contact me directly via email at alex@archetypelegal.com if I can ever be of service. I'll sign off with a couple of trends I'm seeing. 1. The SAFE continues to be a popular form when a startup raises an initial ...

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 12:22
Found In Egroup: Carta Collective \ view thread
@Vik Sharma My pleasure! ------------------------------ Alex King ------------------------------

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 12:21
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@Sarah Katyal Absent the founders coming up with an agreed-upon formula, it is generally more art than science. For example, if the total value contributed is $235k, then if someone contributed $35k, he/she could agree to take 15% of the company ($35k / $235k). The reason it's more art than science ...

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 12:17
Found In Egroup: Carta Collective \ view thread
@Huei-Jung Chen-Oster You're encouraged to speak to a tax professional regarding tax implications, but a few high-level thoughts. The cost basis should be the price they paid for the stock. Taxation will be influenced by whether the options are NSOs or ISOs. Generally speaking, NSOs are taxed on the ...

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 12:11
Found In Egroup: Carta Collective \ view thread
@Varun Poddar The two options that jump to mind are (i) create a class of stock with no voting rights by amending your Certificate of Incorporation and then filling your EIP with those shares, or (ii) create a Voting Agreement and make the RSA grant contingent upon the recipients also join the voting ...

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 12:08
Found In Egroup: Carta Collective \ view thread
Hi @Vik Sharma See my recent post in this thread about issues startups have when raising capital, as I address if a SAFE is even an intelligent vehicle to use. In short, it is a good option for the startup because it's startup-friendly (no interest, no maturity date, etc), but it may be less attractive ...

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 12:03
Found In Egroup: Carta Collective \ view thread
@Tim Chalk A couple of issues jump to mind. For one, the SAFE form is structured for C-Corps, so you'd have to revise it to confirm that conversion would only take place if/when the company converted to a corporation. The SAFE would also need to be transferred to the C-Corp as part of the conversion, ...

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 11:57
Found In Egroup: Carta Collective \ view thread
Hi @Kurt Harrington I'll be in San Diego over the holidays. Feel free to hit me up at alex@archetypelegal.com if you're around and would like to grab a drink. See my recent post which I tagged you around the issues I've seen with offering both a discount and SAFE. As you see on YCs website, they've ...

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 11:50
Found In Egroup: Carta Collective \ view thread
Hi everyone, before I get to the rest of the questions (I have a hard stop at 12:30, but I will do my best to address everyone's questions!!) I wanted to share what I prepared in advance of the chat. My feedback below may even address some questions people have. This is a list of key issues I see arise ...

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 11:39
Found In Egroup: Carta Collective \ view thread
Hi @Ralph Amato If you prove that your product has traction, that will go a long way toward accelerating the capital raise. I recently advised an eco-friendly soap company on a raise, and they were able to land investors with relative ease because they were already in the market (self-funded initially ...

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 11:31
Found In Egroup: Carta Collective \ view thread
Hi @Bodo Voet You're ahead of the game by already worrying about a data room. Far too often, we see clients neglect corporate records and then have to scramble once they have a lead investor. I'll be sharing something I wrote in advance about mistakes I typically see startups make, so be on the lookout ...

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 11:17
Found In Egroup: Carta Collective \ view thread
@Jerry Levin asked: We are a medical device pre-seed startup (incorporated, but need to draft governance docs including stock purchase agreement and equity incentive plan) with about $300k of prospective Safe investors lined up once we formalize that process. The question relates to equity for our initial ...

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 11:08
Found In Egroup: Carta Collective \ view thread
@Jerry Levin Hopefully, @Brent Devey will set me straight if I start doing this incorrectly, but I believe everything will be handled in this thread. I'll be addressing your question shortly. ------------------------------ Alex King ------------------------------

RE: Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 11:06
Found In Egroup: Carta Collective \ view thread
@Nico Escalante asked this question. "I have a question for Alex: We are a pre-seed startup looking to raise capital to get us through launch. We have a deep-pocketed acquaintance who has signaled they are interested in contributing a significant amount in exchange for equity (let's say $500K for ...

Ask a Startup Lawyer Anything about Raising Capital

Posted By Alex King 11-16-2023 11:01
Found In Egroup: Carta Collective \ view thread
Hi everyone, My name is Alex King, and I'm the founder of Archetype Legal, PC (www.archetypelegal.com). My firm serves entrepreneurs, startups, and small businesses as they grow and evolve. We believe the practice of law can be completed with a three-step approach: transparency, philanthropy, and sophistication. ...

RE: Intro

Posted By Alex King 10-04-2023 10:10
Found In Egroup: Founders Lounge \ view thread
Hi Hans, Chris provided some excellent feedback. To take his input a step further, the YC SAFE templates offer a discount-only SAFE that allows you to avoid the valuation question at this early stage. The issue with offering an uncapped SAFE is that it's best used when your next priced round in ...

RE: How much equity to give early employees and advisors

Posted By Alex King 10-02-2023 17:03
Found In Egroup: Founders Lounge \ view thread
Brent, At Archetype Legal, we represent dozens of VC-backed and seed-stage startups, many of which use Carta. I can confirm these numbers resonate with what we typically see. It's helpful to see confirmation from an even larger data sample. ------------------------------ Alex King ------ ...