Business Startup

Understanding Contract Terms (Post 9): Amendments

We continue the Understanding Contract Terms series by explaining amendment clauses. Most contracts include some form of amendment clause. Amendment clauses are important to understand when determining your rights and liabilities under almost any contract and how those rights and liabilities can be amended.

When it Matters to Have a Well-drafted Amendments Clause

There are often times when circumstances change and the terms of a contract no longer accomplish the objectives of the parties. In those situations, it’s important to follow the process outlined in your amendments clause in order to modify the existing contract. An amendment does not replace the entire original contract, just the part that is being modified. Having a clear amendments clause in your contract will help reduce...

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Business Startup

Understanding Contract Terms (post 8): Assignments

We continue the Understanding Contract Terms series by explaining assignment clauses. Most contracts include some form of assignment clause. Assignment clauses are important to understand when determining your rights and liabilities under almost any contract.

Assigning a Contract

To understand why this clause is included in the contract it is important to first understand what it means to assign a contract. An assignment of a contract occurs when one party to the contract transfers to another party their  obligations, benefits, or obligations and benefits, of the contract.

In general, assignments are permitted unless there is an express prohibition against assignment in the contract. But this is a very general statement. Certain types of contracts, including “personal service contracts,” are by default unassignable. Also, contracts...

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Business Startup

iVLG News Roundup Week 12 2014: Seattle Startup Acquired; Microsoft Trade Secret Victim?; Time Warner CEO Makes $42,000 Per Hour

Former Microsoft Employee Arrested for Stealing Trade Secrets

A former Microsoft software architect, Alex A. Kibkalo, was arrested in Bellevue this week on federal charges cased on the allegation that he unlawfully passed proprietary information, including unreleased Windows 8 code, to an anonymous blogger. But Microsoft failed to maintain momentum as the victim in the case when it was criticized for the method by which it uncovered the crime it ultimately turned over to the FBI.  Microsoft was approached by a source who had been asked by the blogger to help interpret the misappropriated proprietary data, and the source disclosed that the blogger used a Microsoft account. Per the Microsoft terms of service, Microsoft decided it had the right to read the...

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Business Startup

iVLG News Roundup Week 11 2014: Crowdfunding Platform Expands; Top Level Domain .Sucks; Seattle #4 for Startups

Fundable Acquires LaunchRock; Candy Crush Goes Public

Equity crowdfunding platform Fundable acquired crowdfunding user engagement company LaunchRock in a deal that seeks to create “one of the largest, if not the largest, footprints in business crowdfunding.” The acquisition price, which was paid in cash and Fundable stock, was not disclosed.

Fundable reportedly used LaunchRock to help launch its business only 18 months ago, and Fundable CEO Will Schroter “love[d] the company so much [he] bought it.” With more than 10 million combined users and 500,000 combined registered startups, the deal highlights the potential size of a growing equity crowdfunding market.

Candy Crush game maker King Digital Entertainment, profiled in earlier news roundups for their aggressive trademark registration and “defense” tactics, filed this week to go...

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Business Startup

Why Do Startup Companies Use Vesting Schedules for Founders?

As a startup founder, you’ve probably heard that your startup’s shares should be subject to a vesting schedule. You may not know why a vesting schedule is important when issuing startup founders’ shares. Today’s post highlights some of the major reasons why a vesting schedule makes sense for most startup companies, including why investors prefer investing in companies that use vesting schedules when issuing stock to the founders.

An  example of why startup companies use vesting schedules for founders Suppose ABC Company was founded by John and Jane. ABC has created a new crowdfunding portal where investors can invest in businesses online. ABC raised a small friends and family round of investment to help launch the company. John and Jane have been...

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Business Startup

iVLG News Roundup Week 10 2014: Bitcoin Turmoil and Creator’s ID?; CNN Flips Zite to Flipboard; SEC Employees Make Insider Trading Gains?

Bitcoin Turmoil and Creator’s ID Apparently Revealed

After the Mt. Gox bankruptcy unfolded last week, this week brought news that the CEO Autumn Radtke of First Meta bitcoin exchange died under suspicious circumstances in Sinapore. And Canada based bitcoin bank Flexcoin revealed it was shutting down after being robbed of $600k worth of bitcoin. The response to the Flexcoin theft was muted in wake of the ~$350 million Mt. Gox heist. And in response to the Mt. Gox debacle, Japan decided bitcoin is not a “cryptocurrency” and announced regulations and taxes that treat bitcoin like a tangible commodity. 

What’s more, Newsweek revealed the apparent name and location of the alleged creator of bitcoin inviting ire from many, especially after the 64 year old California resident led press...

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Business Startup

Who is liable, me or the business? Agency liability issues your business should know:

The term “acting on behalf of“ is often used when signing documents for a business transaction and when talking about liability for the actions of employees and owners. In legal terms, we talk about this concept as an “agency relationship.” In an agency relationship, the agent is acting for the principal in some fashion. The extent of each parties’ liability for an act is based on whether an agency relationship was in fact created and the scope of the agent’s authority to act. 

What is an Agency Relationship?

An agency relationship is a legal relationship between two parties that permits one of those parties to act on behalf of the other party. The acting party is referred to as the “agent”, and...

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Business Startup

iVLG News Roundup Week 9 2014: Bitcoin Under Fire as Mt. Gox Implodes; Candy Trademark Abandoned; Personal Service Startups Take Center Stage

Bitcoin Processor Mt. Gox Implodes

The bitcoin exchange Mt. Gox imploded this week after the company failed to make it through the theft of approximately $473 million due to a security flaw in the company’s software. The bitcoin heist perpetrated by still unknown thieves sent shock waves through the bitcoin community; some regulators, including US Senator Joe Manchin, took a stance in response that seeks to ban the cryptocurrency. While it may be just the growing pains of a new bitcoin industry or that a rogue Mt. Gox acted without responsibility, or both, some nations, including Russia, China, Vietnam, and Thailand have taken steps to end bitcoin use. Mt. Gox filed for bankruptcy on Tuesday, which means the extent to which the Mt....

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Business Startup

iVLG News Roundup Week 8 2014: Mergers and Acquisitions for Google (and Apple?); Tesla Celebrates in Seattle; Seattle to Host First Bitcoin ATM (not)

Google Continues Mergers and Acquisitions Spree Buying Spider.io to Protect Ad Revenue Web

Google announced Friday that it has acquired London based ad fraud detection group Spider.io, which is led by a small team of talented developers. The firm specializes in discovering pay per click ad fraud, which has for a long time cost web marketers big money. Terms of the acquisition weren’t announced. Considering Google makes money from clicks, it may seem like the fox is now guarding the hen house. But a more appropriate analogy is probably that Google’s Spider.io is now guarding its massive online advertising web.

Tesla Beats Washington State Auto Dealers and Does Not Deny Apple Acquisition Rumors

Tesla won a victory at the Washington State Legislature this week...

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Business Startup

Washington House Passes Crowdfunding Bill

A few weeks back, we provided you with an overview of Substitute House Bill 2023, the new legislation that would bring crowdfunding to Washington state.

Crowdfunding allows companies to raise funds from the public in exchange for equity in the company (as opposed to just company swag or first delivery of a product). The bill—which has now passed the House by a vote of 89-9, but is waiting to be passed through the Senate—includes obstacles that may trip up companies trying to take advantage of the new crowdfunding rules in Washington. Since our last discussion of this topic, the bill was amended, and we’ve highlighted some of the major amendments below.

Highlights from the Amended Bill

The notable changes to the bill include:

A definition...

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