1. Common Mistakes
Start-ups Make
By Michael Moradzadeh
Presented at Stanford University on March 4, 2013
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2. No Agreements in Writing
– Contracts memorialize understandings, and act as
evidence
– Contracts force parties to think through possibilities
– Contracts ensure both sides understand each other
– What happens if contract is broken?
– Define terms!
– Contracts with founders, employees, investors, customers,
vendors
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3. Bad (or no) Employment and/or
Independent Contractor (“IC”)
Agreements.
– Difference between employee and IC
– Intellectual Property issues
– Employee benefits
– Defaults without agreement
• Term is at will
• Expectations undefined
• Who pays taxes?
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4. Giving equity without vesting.
– Importance of vesting versus unrestricted stock
– Option plans and 83(b) filing
– Restricted Stock Agreements
– Warrants
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5. Not protecting confidential
information.
– Non-disclosure Agreement/Clause
– Non-competition Agreement/Clause
– Non-solicitation Agreement/Clause
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6. Other considerations.
– Right to use other’s IP
(trademark, patent, copyright, etc.)
– Remember business considerations – don’t
hurt the relationship
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7. Contact Information
Michael Moradzadeh
michael.morad@rimonlaw.com
RimonLaw.com
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