Skip to Content
Cairncross & Hempelmann

Are Special Classes of Founder Stock Right for You?

There is a tried and true structure for capitalizing a technology startup: conventional common stock to the founders, conventional common stock reserved for employees in a stock option pool, and preferred stock to investors.

Cairncross & Hempelmann

It’s an “Economic Reality”: Your Independent Contractors May Actually Be Employees

The federal Department of Labor (“DOL”), the agency charged with enforcing the Fair Labor Standards Act (“FLSA”), recently published an Administrative Interpretation clarifying the test businesses must apply to determine whether workers are properly classified as independent contractors or if they are, in fact, employees.

Cairncross & Hempelmann

How Do Stock Options Work?

For most high growth emerging technology startups, equity is cheaper than cash when it comes to compensating employees.

Cairncross & Hempelmann

Forming Your Startup the Silicon Valley Way

In most jurisdictions, all you need to do to legally incorporate is submit your articles of incorporation to the Secretary of State of the jurisdiction in which you want to incorporate and adopt a set of bylaws, and many online companies (and attorneys) will take care of these two things for you for a nominal price.

Cairncross & Hempelmann

Don’t Give Away the Farm in a Bridge Financing: Conversion Discounts vs. Conversion Caps

In the world of convertible debt, arguably the single most important term for both the startup and the investor is the provision concerning when and how the investor’s convertible promissory note converts into equity.

Cairncross & Hempelmann

The Interests of Investors and Founders Aren’t Always Aligned

Founders of technology startups often believe that their interests are aligned with those of their investors, and that belief is generally true. However, there are many situations where the interests of the founders and other shareholders differ from those of the outside investors.

Cairncross & Hempelmann

“Par Value” – What it Means and How it Can Affect Your Startup

Par value. It’s a concept that many entrepreneurs see in their corporate documents, but few truly understand. What is par value? What does it mean when you see it in your documents?

Cairncross & Hempelmann

Avoid Shareholder Lawsuits by Understanding Director Fiduciary Duties

I had a professor in law school who could spend days discussing all the nuances of fiduciary duties for directors in privately held corporations. We literally spent 8 weeks of a 10-week quarter primarily talking about all the ins and outs of this dry (yet important) subject.