There are seven taxes that you have to pay in the state of California. These seven are as follows: city taxes, state taxes, federal government taxes, sales taxes, income taxes, and withholding taxes. It is important to know what these are. Make sure to get the appropriate licenses and do the appropriate filings whenever you’re doing business in California. If these taxes go unpaid, they will cause problems later on.

A key issue that comes up when going out to raise money is preferred stock versus common stock. When you first form your company, you’re showing common stock to the founders. Eventually, you will issue preferred stock to sophisticated investors. You want to try not to have to issue this kind of stock until it is absolutely necessary. The reason for that is preferred shareholders have rights that common shareholders don’t have. In a preferredRead More…

Almost every company that comes into our offices is looking to raise capital. The limitation on raising capital is generally not that the idea isn’t good enough, it’s the management team. One of the members of this management team is what we call “the translator.” It’s a person who takes your idea and puts it into a format in writing and in a presentation that investors can understand. If you don’t have a good translatorRead More…

Corporate Tax is a critical issue when you’re forming your new company. You don’t want to pay corporate taxes if you don’t have to. The corporate tax rate at the federal level is about 35%, while at the state level it’s about 9%. You get a credit for the state tax against the federal tax, but you’re still paying about 40% in taxes. Then, when you pay out a dividend, the individual pays his ownRead More…

When building a company, there will be a point where you go after your first million dollars or more. For this, you must choose an investment banker. Finding the right banker is not an easy process. You must ensure the person you chose understands your marketplace, understands your product relatively well, and has raised money for similar companies. These things will help to ensure the highest possible probability of success in a capital raise. YourRead More…

When you start your new company, you’ll likely want to build a board of directors to raise capital in order to have good people involved in your company. Most people don’t want to be involved in a start-up as a board of directors member because there is liability between the board member and the shareholders. Rather, for a startup, we create a board of advisors. Advisors have no voting rights. They can sit on theRead More…

Corporate bylaws are generally thought of as a standard set of documents that you get from a legal zoom or a legal forms book.  They tell you when to hold your meetings, how to hold those meetings, and the kinds of notices that are required for those kinds of meetings.  They also talk about the officers and directors roles in the company.  It’s important to make sure you understand what your bylaws say at theRead More…

Corporate bylaws are generally thought of as a standard set of documents that you get from a legal zoom or a legal forms book.  They tell you when to hold your meetings, how to hold those meetings, and the kinds of notices that are required for those kinds of meetings.  They also talk about the officers and directors roles in the company.  It’s important to make sure you understand what your bylaws say at theRead More…

What do you do about banking when you first start your company?  You’re probably not going to get a line of credit unless you have a personal guarantor. A personal guarantor is when you give somebody equity in your company for them to sign off on a bank loan.  They’re putting the money in, and if the company doesn’t succeed, they have to pay it back. You choose your bank for convenience and to buildRead More…

When you go out to raise money, put together a business plan to see if you can get investors interested in what you’re doing.  We actually have a series of documents we like to see our clients prepare.  The type of investor you have dictates what kind of documents you are going to present.  So, of course, there is going to be some form of a business plan, preferably under 10 pages long.  Sometimes theyRead More…