Josh Cook

Your question has been sent to Josh Cook. Ask another

• I need a Non-Disclosure Agreement. I have found a few examples online, where can I get some help for little to no money?

  • 

    The good news is there are A LOT of resources online right now – startuplawyer.com, orrick.com and a few other local firms offer some forms online. Remember, however, almost all of them come with a caveat to check with an attorney before hand.

• I just got the go-ahead on $200,000 worth of funding for my technology start-up. We are an LLC. Should I transfer to a corporation status now, or wait for future needed investors before issuing shares? Thank-you.

  • 

    Most investors typically require you to convert before they fund. If thats not the case, there are several factors to consider. For example, if you think you’re going to be the next Zynga and will be throwing off tons of cash, it may make sense to stick as an LLC for a short while. That being said, in my experience, one way or another, if you take on any institutional venture money, you’ll end up converting to a corporation. There’s not a particular issue with converting down the road – maybe additional time/expense with lawyers and accountants.

• I am looking at an opportunity to see oil mineral rights in Oklahoma through a new company in Ontario. Do I require a license to sell this line in the province of Ontario? Or the state of Oklahoma?

  • 

    Unfortunately, this is a bit out of my area of expertise. We focuse more on technology startups.

• Can you hold collaborators to and NDA before you incorporate?

  • 

    Yes, individuals, just like corporations, can enter into binding NDAs.

• I'm looking at moving one of my employees to the U.S. as well as me going down there for 3-6 months to build the market. I'll also be hiring someone down there.What kind of visas do I need for me, my Canadian employee, and what do I do about my new U.S. employee. Do I need to hire them using Canadian payroll? or do I need to set up a whole other payroll account?

  • 

    The best answer on this is to talk to an expert immigration attorney. This is important enough to spend and money talking to an expert.

• What are common legal mistakes you see startups making in the first year?

  • 

    Communication. Communication. Communication. With your lawyer, cofounders, investors, etc. We’re all moving at the speed of sound to get up and going and ensure we’re not missing an opportunity. Take a second and talk to your lawyer to ensure you understand your capitalization and vesting, for example. Make sure you and your cofounders have set appropriate expectations.

• What is the best way to take on an Angel investor in an S-Corporation?

  • 

    S corporations have limitations on their capital structure – among other things, they can’t have entity stockholders (ie, an LLC can’t hold shares) and they can only have one class of stock (ie, you can’t have common and preferred stock). Those 2 limitations alone typically mean that you’ll need to be a C corp. The good news is that converting from C to S is fairly easy (but not vice versa).

• What is the incorporation state of choice for most technology start-ups? Although C-Corps are the most common type of entity used for future IPOs, I have not seen extensive use of awesome states like WY and NV.

  • 

    I would say that well over 90% of the Companies we work with are Delaware C-corporations.

• What are the most important questions to ask to a prospective startup lawyer?

  • 

    Great question. You should explore a few various categories:

    Cost – how much will this cost and when will you bill me?

    Experience – What other companies have you represented and how long have you been practicing. Tenure matters for lawyers. We can all mechanically do the legal work, but having the ability to say that something is “not market” or identify nuanced legal issues comes with experience.

    Do I like you? – You don’t need to be best friends with your lawyer, but you need to be able to communicate. That is probably the most important part of your relationship

• What are the best options for health insurance when starting a company.

  • 

    Most young companies leverage a third part to help with this – Trinet is an example.