Start-Up in the US: Issues for foreign companies
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An Italian entrepreneur starting a startup in the US would need to consider several legal issues. The US startup process is more informal than in Italy, with no requirements for statutory auditors or minimum capital. The entrepreneur would need to choose an entity structure like a corporation or LLC and determine where to incorporate. Management and financing structures would also need to be established, including potential sources like friends/family, angels investors, venture capital, or strategic partners. Overall, thorough preparation and understanding of US laws around taxation, employment, and immigration is crucial for a successful startup in the US.
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Start-Up in the US: Issues for foreign companies
- 1. January 10, 2014 Majda Barazzutti © 2014 Valla & Associates, Inc., P.C. www.vallalaw.com 1
- 2. What issues would an Italian entrepreneur who wants to do a startup in the US have to deal with? © 2014 Valla & Associates, Inc., P.C. www.vallalaw.com 2
- 3. U.S. vs. Italian Process Informal Private No statutory auditors No minimum capital requirements No legal impediments to ongoing losses © 2014 Valla & Associates, Inc., P.C. www.vallalaw.com 3
- 4. Choice of Entity Corporations LLC’s All the rest (LP, LLP, branches) Where to incorporate? Cost: Be aware of Voucher Program © 2014 Valla & Associates, Inc., P.C. www.vallalaw.com 4
- 5. Management Board of Directors Officers: President Treasurer Secretary An all-Italian management? D&O © 2014 Valla & Associates, Inc., P.C. www.vallalaw.com 5
- 6. The Golden Rules • Prepare, prepare, prepare… • Employment issues: Employment “at will” , but… • Follow the rules • Immigration: Take it seriously • Pay your taxes • Time IS money 2009 Valla & Associates, Inc., P.C.
- 7. Financing is a Staged Process Common Stock Bootstrapping Friends and Family Angels: Equity, Warrants, Convertible Notes “Series Seed” Series A Preferred (B, C, etc.) Liquidity Event © 2014 Valla & Associates, Inc., P.C. www.vallalaw.com 7
- 8. Alternatives: Strategic Investors Stage of Product Development: Scalability Aims Differ Not Interested in Helping the Company Grow Conflict of Interest: greater returns from commercial rights than growth Expertise Could affect future VC financings © 2014 Valla & Associates, Inc., P.C. www.vallalaw.com 8
- 9. Venture Capital Identify the Right VC Due Diligence The Risk of “Finders” © 2014 Valla & Associates, Inc., P.C. www.vallalaw.com 9
- 10. A Typical Term Sheet Valuation/Number of Shares/Price Liquidation Preference Redemption Conversion Antidilution Voting Rights Protective Provisions Vesting of founders' stock © 2014 Valla & Associates, Inc., P.C. www.vallalaw.com 10
- 11. (Almost) anything can be negotiated Make sure you understand what you’re signing Find expert advice © 2014 Valla & Associates, Inc., P.C. www.vallalaw.com 11
- 12. Thank you! In bocca al lupo! Valla & Associates, Inc., P.C. 1990 N. California Blvd., Suite 1060 Walnut Creek, CA 94596 USA E-mail: majda.barazzutti@vallalaw.com Phone: +1 925 705 7623 Fax: +1 925 705 7629 www.vallalaw.com © 2014 Valla & Associates, Inc., P.C. www.vallalaw.com 12