Startup Lawyers for Iowa

HI Erin. Congratulations on starting your cold pressed juice venture. That is exciting. I do have experience drafting agreements between founders and investors. Vesting agreements can be very flexible to meet the needs of the parties. They are very useful when a party is investing sweat equity in addition to or in place of cash. I am happy to discuss such agreements with you and how they relate to your particular venture.

Hello, I can help you with this project. I’m a semi-retired, long-time Texas attorney with substantial experience in business and corporate law. I counsel startups and small businesses, help them set up corporations or LLCs across the country and draft a variety of contracts and corporate documents. You should have an LLC for liability protections, whether it's in Michigan or in Texas. Actually, you would be better off organizing a Texas LLC because your Michigan LLC would have to register in Texas so you would be paying extra fees. There is no licensing requirement for nanny agencies in Texas. If you are interested, I will make you a flat fee bid to set up an LLC for you here in Texas. Thx. JV PS For more information about business entities, download a free copy of my ebook "Should Your Small Business Become a Corporation or an LLC? A Look at Liabilities, State & Federal Taxation & More!" from my website types-of-business-ownership.com

This is really a business question, as much as it is a legal question - although lawyers can certainly help you structure and document it once answered. That said, I think you're likely to find a spectrum of answers - on one end of the spectrum, there are 3 investors with equal shares (each having 1/3 of the equity - 2 of which receive their percentage in consideration for $ investments, while you receive yours for your efforts in running the business day-to-day- in this scenario, everyone and everything they bring to the table is equally valued); on the other end of the spectrum, there are 2 investors with equal or otherwise proportionate shares (each having 1/2 of the equity - or some other percentages that total to 100% - in consideration for their respective $ investments, which may differ depending on the value of the businesses underlying the loans), and you are considered an employee of the business (not an investor), who will receive compensation for running the business- presumably a salary and possibly including incentives based on the success of the business; and of course, there are some variations that could impact any or all parties in the middle of the spectrum. I suggest that you have a conversation with your potential partners to learn how each party views the value being brought to the enterprise by the others and begin the negotiation from there. Note also that this deal sounds simple in theory but may become a little complicated due to the funding mechanism being used on the back end.

Every term in a term sheet, by definition is important. A term sheet is a summary of the most important parts of a "deal" - a way of getting to and negotiating the hear of the deal before filling in the gaps with boilerplate. Therefore, you should make sure that you understand all of what has been proposed and negotiated in the term sheet - even the provision that don't seem that important - because they wouldn't be in the term sheet if they weren't a key term to one side or the other.

It's not necessary but it can be a really good idea. You'll want to address things like the equity split, vesting schedule, each cofounder's contributions (cash, IP, time, etc.), how much time each cofounder will be expected to spend (and if someone is starting out part-time, when they are expected to go full-time), and you may want to address consequences for failing to meet the required contributions and time - for example, company can claw back shares at original price and expel the cofounder.