Monthly Archives: April 2013

Hiring the Right Startup Lawyer

Hiring the Right Startup Lawyer from The Startup Garage

Hiring the Right Startup Lawyer

You own a young company that is seeking VC, angel or perhaps even seed funding.  You want to protect yourself with the right legal documents, ensure that you are taking the right steps and perhaps gain some legal counsel along the way.  You turn to your network circles for a recommendation on a good lawyer.  Before you know it, you are inundated with firms and you don’t know where to begin or which to choose.  Start with these basic criteria to begin eliminating those that aren’t right for you: startup focused, firm size and local.

Right Sized

For the most part, you’ll want to avoid working the large, national law firms.  The one caveat is if they have internal practices that focus on startups.  Otherwise, you’ll find yourself competing for attention with the larger clients that the firm represents.  On the flip side of the scale, make sure you do your homework with any local or smaller firm to ensure that they really have the startup expertise that you need.

Startup Focused

As in nearly every field of service providers, you’ll want to identify a specialist.  You wouldn’t hire a commercial real estate agent to find your next home.  You wouldn’t hire an action sports sales rep to push your medical device.  You wouldn’t hire a back-end software engineer to develop your user friendly website.  Similarly, don’t hire a lawyer that doesn’t specialize in startups.  Keep in mind, the entire firm doesn’t have to be startup focused, just make sure your lawyer is.  Furthermore, many lawyers that work with startups are open to working on a deferred payment schedule.


Whether you are working with a local law firm or the local branch of a national firm, be sure to go with a local lawyer.  A local lawyer, especially one that is startup focused, can help tap you into their key networks where you may find potential funding sources, strategic partnerships or mentorship relationships.

In conclusion, do your homework and stick with local, startup focused lawyers that aren’t looking for bigger fish to fry and will give you the time of day that your company deserves.


Whether you have a question about Hiring a Startup Lawyer, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

TED Talk on Pitching to VCs from “The Pitch Coach” David S. Rose

TED Talk on Pitching to VCs from “The Pitch Coach” from The Startup Garage

TED Talk on Pitching to VCs from “The Pitch Coach” David S. Rose

As an entrepreneur, David Rose has raised millions for his own companies.  As an investor, he has funded millions more.  According to the “The Pitch Coach,” the single most important thing that the VC is going to be investing is YOU.  “Therefore, the entire purpose of the VC pitch is to convince them that you are the entrepreneur in whom they are going to invest their money and make a lot of money in return.”  In order to accomplish this you need to convey several characteristics that will convince the room that you are this person.  The most important characteristics are integrity, passion, experience, knowledge, skill, leadership, commitment, vision, realism and coachability.

Your pitch deck presentation is simply a visual tool to help you deliver this message.  It is paramount that the audience is solely drawn to you, and that your deck merely contains short bullet points, headlines and images that evoke an emotional connection or act as a summary of your presentation.  You will want to develop a separate pitch deck that you will provide as a handout that includes much more information about the pitch.  However, during the presentation itself, the deck needs to be bare bones and the information needs to come from you.

David Rose outlines all of this in his TED Talk in addition to a compelling description of how your pitch deck presentation should be developed:

  1. The first slide should contain the company logo.  At this point, you’ll provide a brief (1-2 sentence) overview of what the company does , how it does it and why it is important.
  2. Next, introduce the management team and key players.  Explain how their experience and skill-sets align with the company and where it is going.
  3. The very next slide needs to clearly introduce who the market is and what the size of the market is.  First and foremost, you target market needs to be focused.  Second, it is important that you use outside validators to convince the audience that what you are telling them is true.  Outside validators can include successful beta runs, size of companies in the same or a similar space, credible research firms, etc.
  4. Once your audience has an overview of the company and understand who the market is, present the product or service.  A simple image on the slide will do.  It is up to you to explain the product in simple and succinct terminology that does not confuse or patronize the investor.
  5. The next slide is about the business model.  Explain how the company makes money and why this model was chosen if necessary.
  6. Follow the business model slide with an overview of the competition.  Investors want to see who the competitors are, their strengths and weaknesses, how you are positioned among them, and most importantly, how are you special.  Be sure to include outside validators here as well, such as strategic relationships.
  7. Discuss any barriers to entry that exist in the industry and how your company has or will overcome them.  You may also want to mention any barriers that your company has or will put in place to deter any new entrants or copy-cats.
  8. Provide a simple P&L on the next slide and discuss the key financial takeaways in your projections.  Be sure that when you present the upside potential that you are not too low in your assessment but that what you present is believable as well.
  9. Dedicate the following slide(s) to the capital amount that you are requesting, the use of proceeds and lastly, your valuation.
  10. Conclude with your logo on the screen and wrap up the key points made above as quickly as possible.

You want your presentation to be like a rocket, building speed and momentum throughout its trajectory until it reaches its destination and ends with a climactic explosion.  So to your presentation needs to continually build momentum, getting stronger and stronger throughout the presentation and ending on an extremely high note.


Whether you have a question about “The Pitch Coach”, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Bootstrapping Responsibly

Bootstrapping Responsibly from The Startup Garage

Bootstrapping Responsibly

Usually, the most successful bootstrapping entrepreneurs are those that take a close look at their spending habits – both personal and business expenses – and cut out anything that is superfluous. However, many entrepreneurs make the mistake of cutting or forgoing key expenses such as health and life insurance.

Whether you are a single, young, healthy individual or a mid-life married individual with a spouse and kids, your (and your family’s) health and well-being should always come before the business. Life’s big risks, such as serious illness, permanent disability or early death, should not be ignored in exchange for your startup’s longevity. Cutting these costs is not considered lean or bootstrapping – it’s irresponsible.


Whether you have a question about Bootstrapping Responsibly, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Convertible Note Transaction Documents

Convertible Note Transaction Documents from The Startup Garage

Convertible Note Transaction Documents

Many business owners who are unfamiliar with the convertible note process are unaware that of the legal documents needed in convertible debt financing.  In addition to the convertible note itself, a startup will need two additional documents: a convertible note purchase agreement and written consent of the startup’s board of directors authorizing the convertible debt round.

Whether you have a question about Convertible Note Transaction Documents, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

The Importance of Copyright Assignments

The Importance of Copyright Assignments from The Startup Garage

The Importance of Copyright Assignments

A copyright isn’t a single right; it is a combination of rights. Copyright owners can transfer some or all of the rights. A full transfer of rights is called a copyright assignment. It’s important for start-ups to get a full copyright assignments for their logo, website, software, etc that is created for the company by independent contractors or service providers.

If you have not received a full transfer of rights from the original copyright owner, the author of the work, you most likely do not own the copyright. Think of it like buying a CD. You own the CD, but the band or record label owns the copyright to the book and you are not able to copy and sell it.

If you do not own the copyright to your website or software for example, the developer of that material can resell it or use it as they please. It is critical that you receive a written copyright assignment from the owner of the copyright or its agent as you will need to present this when registering for your copyright.

Whether you have a question about Importance of Copyright Assignments, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Pay to Pitch? NEVER

Pay to Pitch? NEVER from The Startup Garage

Pay to Pitch? NEVER

Your start-up should never have to pay money to pitch to potential investors. Several “angel groups” will express interest in your start-up only to inform you later that they charge a fee, sometimes up to $5,000.

Some of these wealthy angels argue that these fees act as a filter. First, a potential investor should be able to tell whether they are interested in you and your start-up without you needing to waive money in their face. Second, there are thousands of other investors that don’t require fees to filter their investment opportunities. As an angel investor, it is their job to filter their opportunities and manage their returns.

While it may seem like an extremely difficult uphill battle to source funds, your start-up should never have to empty its own pockets for a measly pitch. Angel investors are wealthy; that’s why they are in a position to invest in the first place. A pitch fee is a nominal amount of money to a true angel investor, yet a large sum to you and your start-up.  If it talks like a scam, smells like a scam and looks like a scam…it’s probably a scam! Even if one of these so called “angel groups” that charges presentation fees actually invests in the companies that pitch to them, there are plenty of other groups and private investors that do not make you take such risk.

Jason Calacanis wrote an excellent post on this topic if you would like to learn more. He also includes a list of angel groups that are under investigation for such practices.

Whether you have a question about Never Paying to Pitch, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

What You Need To Know About Starting a Non-Profit

What You Need To Know About Starting a Non-Profit from The Startup Garage

What You Need To Know About Starting a Non-Profit

Corporations usually acquire funds from government agencies and private foundations. They use these funds to achieve goals that aim at improving social benefits. If you want to fund a non-profit corporation and effect positive changes to the community, check out the following list. It will enable you to gain better understanding about the benefits and the drawbacks of non-profit corporations.

Non-Profit Qualifications

Many types of groups can seek non-profit status. The following ones may be eligible: childcare centers, shelters for the homeless, community health care clinics and hospitals, museums, churches, synagogues, mosques, and other places of worship, schools, performing arts groups, and conservation groups.

Tax Exemptions

Non-profit groups can gain tax exemptions when they obtain corporate status. Non-profit corporations usually get their tax exemptions from Section 501(c)(3) of the Internal Revenue Code. It not only enables a non-profit to be free from paying taxes, but also allows people and organizations that donate to the non-profit to take a tax deduction for their contributions.

Shielded From Personal Liability

Forming a non-profit corporation can protect its staff from the corporation’s debts and liabilities. If any employee obtains a judgment against the non-profit, this judgment can reach only the non-profit corporation’s assets. Personal assets of all the people working in the non-profits are shielded from personal liability.

Roles and Salaries

The board of directors run a non-profit corporation and they hire management team members. They oversee the financial area and do strategic planning. A board member can also be a payroll member working for the organization.

Profits and Exit Strategy

Profits cannot be divided among corporation members beyond reasonable salary payment. A non-profit corporation cannot be sold for money. If its board of directors decided to dissolve it, its debts and liability have to be paid off, and all its assets need to distributed to another non-profit corporation.

The government provides non-profit organizations with many benefits, but they also post some regulations to limit certain behaviors. It is necessary set up a consultation with a lawyer and know the benefits and drawbacks for a non-profit. Your strategy should take advantage of the laws and should be documented in your business plan.


Whether you have a question about Starting a Non-Profit, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Hunger Games – Learning to Share

Hunger Games - Learning to Share from The Startup Garage

Hunger Games – Learning to Share

Self-preservation is unavoidable in the world of start ups.  It’s what keeps your start up alive.  It’s what allows your start up to grow.  It’s what keeps your start up yoursWRONG.  Many entrepreneurs treat their start-up like their baby.  And who could blame them.  They have invested personal savings, time, sleepless nights and great risk.  Why wouldn’t they try to grasp the rains and keep control at all costs?

As nearly every entrepreneur learns sooner or later, in order to make your start up work, you are going to have to work with many types of people – including investors, key employees, consultants and strategic partners – which could result in issuing equity in exchange for services or investment.

Being vigilant about keeping control of the start up is fine.  If it is your goal to run the business, you will certainly need to be prudent about how you issue equity and to whom.  However, once you have issued equity (to investors, consultants, key employees, etc), don’t make the mistake of viewing them as outsiders that are trying to steal your start up.   Rather, team up with these people to develop your start up and take it to the next level.  After all, now that they are co-owners, you have the same end goals.

Whether you have a question about Learning to Share, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Behavioral Targeting and What it Means to You

Behavioral Targeting and What it Means to You from The Startup Garage

Behavioral Targeting and What it Means to You

The internet is a constantly evolving mass of information that has only been around for a few decades, but is making a deeper and wider impact on global society each and every day. The concept of behavioral targeting is relatively new and is making an impact on each individual who uses the internet.

What is behavioral targeting you ask? Well, it all begins when targeting companies reach agreements with publishers and they put a specific piece of code into their website. As you browse the web, this site places a “cookie” on your browser. Now that the cookie is attached to your browser, the targeting is already under way. Data points are constantly being gathered as you navigate the world wide web taking note of the sites you are on, what you buy, as well as what you search for. As time goes on this data amasses itself and not only puts you in demographic categories but also takes note of your interests, preferences and hobbies.

The ability to gather this information on every individual using the internet allows companies to target specific segments of the population and thereby achieve a higher rate of interaction when marketing online. This may seem like a very costly way to advertise on the surface but the rate of interaction that you get from this method may prove to be extremely cost effective in the long run.

There are overreaching effects outside of the obvious marketing and advertising impacts that this technology can have for start-up companies trying to reach new customers. A whole new level of personalization is on the horizon. Jeff Hirsch, president and CEO of AudienceScience says that “10 years from now we will all look back and laugh that we ever had to type something into Google to find what we were looking for.” The algorithms that are being developed for this level of personalization are extremely complex and are now able to grasp a human’s depth and therefore avoid inundating you with Nike ad’s just because you were on These newer and constantly evolving algorithms are breaking down website content that you view and these targeting techniques are viewing people as multi-dimensional beings.

The fact that these data points are constantly being compiled means that advances in this concept will come quick. If you are a startup company it would be wise to research this field and determine the best ways for your firm to use it to your advantage. When it comes to technology it doesn’t take long to get left behind so stay on the cutting edge with this one because its benefits to start-ups and entrepreneurs are limitless.

Whether you have a question about Behavioral Targeting, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How to Read a Patent – It’s All In the Claims

How to Read a Patent - It's All In the Claims from The Startup Garage

How to Read a Patent – It’s All In the Claims

It may seem simple, but reading a patent and fully understanding what the patent actually covers can be rather difficult.  Let’s begin by reviewing the main sections of the patent.  First, we have the patent identification information: the patent number, title, patent holder’s name, owner of the patent (if different), the filing date, the issue date and cited references.  Next, we have an abstract which outlines the type of the invention and its basic functions.  We then have the patent specifications which explain how to develop and use the invention.  We then have drawings of the invention.  Lastly, and most importantly, we have the claims, or the legal limitations that the patent covers. 

While the specification will cover the invention in general, it does not represent the patent’s legal coverage.  Claims are usually very specific and do not cover many of the key functions of the invention as described in the specification.  Claims come in two primary classifications, independent claims and dependent claims.  Dependent claims incorporate an earlier claim and an additional element making a new, slightly different claim.

Constructing your claim can be very difficult and will likely include several rounds of modifications during the patent prosecution process.  Saving money on your startup by claiming a patent on your own and avoiding the cost of patent and I.P. lawyers, may sound like a good idea.  However, if you are not familiar with the claims process, you will likely find that the process will be difficult and time consuming.  Even worse, your start-up’s patent may not cover key claims that will protect your invention down the road.

Whether you have a question about Reading Patents or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!