Business Startup

Many Startups Are (Unintentionally) Breaking These Wage Laws

Since most startups don’t have a large reserve of cash during their early days, it is common for startups to compensate founders and early employees solely with equity. While this allows startups to conserve what little cash they have, this practice could ultimately be very costly for the company if it runs afoul of wage laws. In today’s post, we discuss various ways that startups may expose themselves (and in some cases their founders, directors, and officers) to liability for violating wage laws, and some steps companies can take to limit that liability.

While the attorneys in our firm do not practice employment law specifically, we come across these issues frequently when working with startups and think it is something founders...

Read More

Corporate Finance & Securities

Employee Equity Explained: Stock Options

Today, we are continuing our series on Employee Equity Explained by discussing stock options specifically.

Stock options are contracts that allow an employee to buy shares (this is called “exercising” the option) at a fixed price. Options are different than receiving stock because an option is exactly as it sounds; it’s an option to buy stock upon certain conditions being met, such as vesting (discussed below).

There are two standard types of stock options: Incentive Stock Options (“ISOs”) and Nonstatutory Stock Options (“NSOs”).

ISOs provide the recipient with certain tax benefits but they can only be provided to employees of the company, not independent contractors or non-employee board members. Additionally, only $100,000 in ISOs can be exercisable in any given year. NSOs on...

Read More

Business Startup

Employer Trends in Parental Leave Policies

We’ve been reading the business news surrounding companies increasing the parental leave they offer their employees. In today’s blog post, we take a more in depth review of the trend locally, discuss what businesses can expect in the future, and remind employers to understand applicable law before developing their parental leave policy.

Parental Leave in the News

Washington tech giants Microsoft, Amazon, and Zillow have recently announced plans to increase their parental leave. Microsoft now offers 12 weeks of fully paid parental benefits to all new mothers and fathers. Amazon also introduced a revamped parental leave policy. Amazon will offer birth mothers up to 20 weeks of leave. Amazon has also introduced a shared leave program; employees whose partners do not receive parental leave...

Read More

Business Startup

News Roundup: Social Justice Hackathon; Shark Tank; and Surge Launch

What we’re reading this week at InVigor:

This weekend is the Social justice hackathon event, bringing law students, lawyers and developers together to create software applications designed to improve access to legal service.

Why Mark Cuban is willing to back the worst company in ‘Shark Tank’ history.

How to know when it’s time to hire an assistant.

New Surge Launch accelerator pairs startups with mentors and up to $80K in seed funding.

Leaders of the tech world are asking, what do you still wish there was uber for?

...

Read More

Business Startup

News Roundup: Chicago Women Entrepreneurs; Amazon Under Fire; and Historical Heroes

What we’ve been reading this week at InVigor:

Chicago is the top city for women entrepreneurs in the world.

Today marks 10-year anniversary of Hurricane Katrina. This article reminds us that natural disasters are far from equal-opportunity catastrophes

Amazon under fire, but has yet to yield same day shipping for all products

US National Labor Relations Board is redefining what it means to be an employer

4 amazing charts from historical heroes. Everyone loves a good chart

This man spent a month replying to all his PR emails with “I love you”

Flickr I Photo: Liquer Felix

...

Read More

Business Startup

Uber Driver Is An Employee According to California

The California Labor Commission recently ruled that a San Francisco Uber driver is an employee, not an independent contractor. This ruling, which came to light last Tuesday when Uber filed an appeal, could have major ramifications. The debate over whether on-demand laborers should be classified as employees or independent contractors has been going on for a few years now fueled by the explosive growth of companies such as Uber and Lyft. And regulators in different states are sure to look at this ruling when they have to make a decision on the issue.

The case that was before the California Labor Commission involves a San Francisco driver, Barbara Ann Berwick, who worked for Uber from July to September 2014. She had...

Read More

Corporate Finance & Securities

Employee Equity Compensation Plan: How to Slice the Pie?

Startup founders will often wonder how much employee equity they should give.  While there is no bright line rule for how to allocate equity in your equity compensation plan, there are a number of factors to consider to craft the appropriate equity compensation plan for your startup.

Types of equity to grant

Equity can be broken up into common stock and preferred stock. It’s unusual for a startup to issue preferred stock to anyone but an investor in the company, so we’ll focus on common stock. Common stock is a security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy. Common stockholders are on the bottom of the...

Read More

Business Startup

Why a Repurchase Option Matters to Startups

Most founders are concerned about making sure each of the co-founders are invested in the company. Founders often ask about protecting against a co-founder leaving the company, taking his or her equity, and sharing in the potential future upside value of the startup without continuing to work for that right. To protect against this, startups often have a “repurchase option” to buy back shares from the departing founder.

When Can the Company Exercise the Repurchase Option?

While terms can vary, the shares issued to the founders are often subject to a vesting schedule that requires the founder fulfill certain obligations—e.g. to stay with the company a period of time, achieve certain milestones, or any other creative requirements the founders agree on— in...

Read More

146 N Canal Street, Suite 350   |   team@invigorlaw.com