Curtis Roberts, Esq.

I'm Curtis Roberts. A startup lawyer based in Santa Monica. Let me help you get your idea off the ground and take it to the next level. So whether you are looking to start a business or are ready to raise money from venture capitalists, you are in the right place. give me a call so we can talk about your business today.

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Sustainable Startups - How Can Founders and Entrepreneurs Protect Themselves?

In the past article series I discussed how founders in venture backed companies lose control and find and themselves thrown out of their companies. If you haven’t read it yet click here. In this article, I am going to discuss how founders and entrepreneurs can and should protect themselves. 1. Focus on Goal Alignment Selling a portion of your company comes at a heavy cost and while funding partners (Venture Capitalists and Angel Investors) may have brilliant visions for your

VC and Angel Contracts: Why Overoptimistic Entrepreneurs Lose Control of Their Companies - (Series P

Select Provisions of Venture Capital Contracts In the previous posts I have been discussing some ways entrepreneurs and startups can protect themselves when signing a deal with VC or Angels. In this article I will discuss some provisions the wary founder should be cautious of when looking over a VC contract. In the robust VC market of the late 1990s many of the below provisions were of little effect, because the appreciation trajectories of company valuations were positive an

VC and Angel Contracts: Why Over-Optimistic Entrepreneurs Lose Control of Their Companies - (Series

Board Control in a Venture Backed Company Over the last couple of posts I have described a common scenario wherein an entrepreneur loses control of her company because of several factors. In this post I will be discussing the Board of Directors. Investors know that appointment to the board of directors is critical in terms of control. A venture capitalist's control over a start-up's board of directors is a critical source of its governance powers. Founders rarely keep contr

VC and Angel Contracts: Why Over-Optimistic Entrepreneurs Lose Control of Their Companies - (Series

Typical Venture Capital Contracts and Agreements Common v. Preferred Shares With venture capital’s checkered past, that includes changing market conditions, a fickle regulatory environment, and extreme uncertainty in entrepreneurial investments, it is no wonder that venture capitalists have craved control wherever possible. This control has manifested itself in in what is collectively referred to as venture capital contracts. By controlling the venture, the venture capitalist

VC and Angel Contracts: Why Over-Optimistic Entrepreneurs Lose Control of Their Companies - (Series

"In a sense, venture-capitalist financed firms are much like a marriage, in that the partners come to learn much about each other only after entering into the transaction, and, as in marriage, there is always the possibility that a divorce will ensue." Imagine, for a moment you are an entrepreneur with an idea for a super computer inexpensive enough to target the average consumer. After years of perfecting the prototype in your garage on a shoestring budget, loaned from fami

Preferred Stock

Preferred stock is represents an ownership interest that has a higher claim on company income and assets than common stock. Preferred shares generally have a quarterly dividend that has to be paid before dividends to common shareholders. The shares usually do not carry voting rights when issued to the public at large, however in the context of venture agreements, Angels and VC will generally bargain for voting rights. The details of each preferred stock depend on the issue an

Common Stock

Common stock is a type of security representing a percentage of ownership in a company. This is the most prevalent type of security used by corporation. You may be familiar, as anytime you see a stock ticker symbol on the DOW or S&P 500 these almost always represent the price of one share of common stock (i.e. Apple). Private corporation will almost always issue common stock as well. Common shareholders usually can vote on leadership and in the event of liquidation common sha

Founder's Disease

Also referred to as Founder's syndrome or founderitis. As a company grows the initial founder(s) do not gain the necessary skill set to meet the demands of the organization as the scale of the company increases. Sometimes it results in failure of the company. The symptoms most often include an inability to delegate or to maintain control over the right parts of the organization.

Living Dead!! (AHHH)

Venture Firms try to avoid “the living dead,” also referred to as a “zombie company” or “sideways situation,” which is a profitable entity that requires ongoing VC monitoring, but where the growth opportunities are not high enough to generate an attractive internal rate of return and are routinely liquidated, usually via trade sales, by venture capitalists hoping to turn to more promising ventures.

Accredited Investor

An accredited investor is a legal term defined by the Securities and Exchange Commission (SEC) in Rule 501 of Regulation D. It means that an individual has over $1 million in net worth, or income over $200,000 in each of the last two years (or $300,000 with spouse) and reasonably expects to reach the same income level in the current year. There are many companies that operate under a Regulation D exemption (Rule 505 and 506) Meaning they sell their products exclusively to acc