When you launch a startup, you will need to consider how you want to form your business, define founders’ roles, and protect your business’s intellectual property. As your technology company grows, you may need to seek financing or issue securities to help you expand your business operations.
Carbon Law Group has the experience you need to launch and manage your startup. We understand technology companies’ unique requirements, from the formation and foundational issues to soliciting venture capital and issuing securities, to managing tax law and corporate law, and to intellectual property protection. We have handled a broad range of legal matters that impact technology startups and companies. We will use our experience to guide your company through a successful launch or expansion.
LIST OF SERVICES (Technology Services)
Investor Agreements in Technology Industry
When you solicit seed, angel, and venture capital financing, your company will need an investor agreement. An investor agreement will help you limit investors’ power and control and help your company comply with securities regulations.
You will want to control investors’ power and control of your business. For example, if you grant initial investors pro-rata rights, then you risk stopping future investor solicitation. Or, if you grant too much power to many investors, then you could significantly hinder your company’s growth.
Securities regulations apply to companies launched as formal legal entities that accept investor capital, such as S-Corporations and C-Corporations, limited liability companies, and limited partnerships. A company’s failure to comply with securities regulations can result in stiff financial penalties and even require a company to buy back all of the investors’ shares.
When you are launching a new company, dealing with investors can be intimidating. You may feel that you do not have much leverage with investors. You might even be tempted to agree to terms and conditions that are not advantageous for your company in the long term.
Carbon Law Group can help you fashion investor agreements that protect your position while appeasing your investors’ concerns and needs for capital returns. We will negotiate for you. We can help you create an investor agreement that will satisfy all parties’ interests without sacrificing your power and control of your business. We will then guide you through the process of issuing investor shares that meet all applicable securities regulations.
Founder Agreements in Technology Industry
Many startups begin as an idea shared between friends, who then decide to start a business. The founders’ focus tends to be on the idea, and not the finer points of their company’s formation. This, in turn, can lead to misunderstandings and problems as the company grows.
The following are just some of the issues that founders much consider when starting a business:
- What roles and responsibilities will founding partners play?
- How are deadlocks going to be decided?
- What happens if roles change over time?
- How is “ownership” determined?
- How is compensation calculated?
- How is capital investment balanced against “sweat equity?”
Carbon Law Group can guide you through your company’s formation. We can help you choose whether you want your company to be a limited liability company, a corporation, or a partnership. We will explain the benefits and consequences of each choice, and how your choice will affect founding members’ roles and responsibilities, ownership percentages, decision-making power, how those roles change over time, and compensation. Once you decide on how you want your company formed, we will draft a founder’s agreement for you that clearly defines your choices.
Non-disclosure, non-solicitation, and confidentiality agreements
Your technology company’s most valuable assets are its ideas, designs, trade secrets, and other intellectual property. This is why technology companies must carefully secure their intellectual property, especially from the outset. Your company must be protected from losing intellectual property because a partner or employee has left the company. Without protection, that partner or employee could use your company’s intellectual property for his or her own gain, to your company’s detriment. That, in turn, could be financially devastating to your business.
Under California law, most non-compete agreements are unenforceable. There are a few limited exceptions, but in most cases, California courts will not enforce non-compete agreements. In Arizona, non-compete agreements can be enforceable. A non-disclosure, non-solicitation, and confidentiality agreement can help you protect your company’s intellectual property. Carbon Law Group will help you create agreements that limit how departing partners and employees exercise their acquired knowledge.
Trademarks & Intellectual Property
Software development is one of the hottest and most lucrative sectors in the technology space. Multi-million dollar applications are being launched every day.
A technology company’s brand is valuable intellectual property. A brand is how a company differentiates itself from others in the same market. With a recognizable brand, a company can create customer loyalty. A company’s name, taglines, and logo all contribute to a company’s brand. If the company’s brand is not protected, then other companies can try to capitalize on a company’s brand and customer goodwill. Brand recognition is a valuable piece of intellectual property that, if managed and protected properly, can potentially be worth millions.
Carbon Law Group can assist you in trademarking your company’s name, taglines, and logo. Carbon Law Group can conduct a preliminary or full trademark search report, evaluate your brand, and file your trademark application and statement of use.