Last spring, Red Russak founded Startup Seattle to bring together Seattle’s startup community resources and help entrepreneurs connect and grow new ideas and businesses. The Puget Sound Business Journal reports that some big players have now joined Russak’s cause, including Chris DeVore of TechStars and Founders Co-op, Ex Lazowska of the Univ. of Washington’s computer science department and Greg Gottsman of Madrona Venture Group. Now, with the help of these big name entrepreneurs and… Read the rest
I recently read an article detailing the impact of the market downturn on U.S. law firms. Relying heavily on data presented by the Hildebrandt/Citi Private Bank 2012 Client Advisory, the article discussed the steady—if not drastic—decline in revenue, demand, and “realization” since September 2008. One of the most alarming statistics was the decline in the collected realization rate against the standard, i.e. the percentage of work performed at a particular firm’s standard rates that is actually collected from clients.… Read the rest
Mergers and Acquisitions
Starbucks Acquires Teavana for $620 Million Cash
On Thursday, the Seattle-based coffee giant announced its plan to acquire Atlanta-based tea company, Teavana Holdings Inc. This acquisition comes as part of Starbucks’ general strategy of moving into non-coffee areas, including juice and tea. The U.S. tea industry is a $95 billion market.
The acquisition certainly doesn’t break the bank for Starbucks, as it is sitting on roughly $1.5 billion in cash.
Mega Law Firm Merger Announced
What do you get when you combine two of the larger… Read the rest
You’ve likely noticed the growing trend of small businesses ‘going green.’ More and more businesses are operating on green power in an effort to help the environment. For some of these businesses, it goes beyond the positive environmental impacts, ‘going green’ is a way for the company to build its branding and profitability.
The Growing Trend in Small Business
Earlier this year, the Environmental Protection Agency (“EPA”) released an updated list of organizations that voluntarily choose to use clean, renewable electricity to run their business. Wind, low-impact hydropower, and solar energy qualify as “green” power.… Read the rest
Two close friends decide to start a company. They agree on just about every issue, including how the business should be formed and managed. They are ready to launch, make money, and grow their idea into a sustainable business. Each partner has an equal stake in the company, and they’ve decided that each will receive equal compensation as well. They want it to be simple, no lawyers, no accountants, no additional partners, etc. You get the picture, right?
Both partners trust each other, and neither has any reason to believe that their relationship will deteriorate. What they haven’t taken into… Read the rest
When discussing choosing the right business entity, it’s important to understand the significant (and subtle) differences between the various choices. Today’s post details the differences between the limited liability company (LLC) and the S corporation.
State v. Federal Distinction
For state law purposes there are two primary entities that merit consideration: corporations and LLCs. Corporations and LLCs both offer limited liability to business owners, which means that absent extraordinary circumstances if the business is sued, only business assets are on the hook—i.e. your personal assets would be safe from any judgment.
For federal… Read the rest
The Two Basic Approaches
There are many ways to divide the equity of a startup, but broadly speaking there are two approaches: (1) go with what’s “fair”; or (2) try to ascertain the market value of the founders’ present and future conduct.
The “Fair” Approach
The basic premise of this approach is that founders putting in equal time should have equal ownership interests. The main benefit is to the relationship between the founders. When they are equal owners, they need to act with greater consensus. When one founder doesn’t get his or her way, they don’t feel like they… Read the rest
An often overlooked part of purchasing a business is the transfer of intellectual property rights. Included in these rights is copyrights, trademarks, patents, and other non-disclosure rights. Today’s post details three basic questions you should ask before you purchase a business.
Can the business’ logo be transferred as part of the purchase?
There are situations where even if the logo is transferable, you may not want to transfer it. If the logo infringes on the intellectual property rights of another business, you shouldn’t… Read the rest
News Corporation Splitting Into Two Companies
Rupert Murdoch has confirmed that News Corporation, a $54 billion media company, will be splitting into two different entities. The existing company will retain the news-related assets of the company, while the new company will focus on the entertainment-related assets of the company including FX and Fox News (yes, it seems that News Corporation execs categorize Fox News as primarily entertainment, and not news). The split will be completed in the next year. News Corporation shareholders are expected to receive one share of the… Read the rest
A recent article on Inc. discussed some tips to keep you motivated when selling your company. We’ve expanded on these ideas and listed the important considerations that you should be aware of when you’re going through the sell process.
The sale takes longer than you expected
First things first, selling a business is a complicated process and generally takes longer to complete than you expected. This is especially true if you aren’t familiar with the process before hand. Knowing upfront that the process is long and arduous is important.
Keep your motivations… Read the rest