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I'm a former lawyer (corporate, technology, IP) who started a s/w company in 2000 and sold it for $120M in 2005. So I've been there and done that. I help (for free) Atlanta-based hacker teams think through the "legal issues" involved in starting a business, but I'm not really a lawyer any more. It's not that complicated: (1) IMHO you should think first about the founder equity vesting issues. On the one hand, it wouldn't be fair for a co-founder to bail out after 2 months and keep all of her equity. On the other hand, it wouldn't be fair if her co-founders kicked her out after 2 months for no reason and left her with almost no equity. So there's a balance that needs to be reached, and the discussion can be emotional. With the lawyer's help, the team can strike their desired balance in an agreement that governs equity vesting, such as a restricted stock agreement. I can send you a sample agreement to illuminate the trade-offs. waytking AT gmail DOT com. (2a) If all founders can't agree on the founder equity vesting balance, you do not have a startup team. Form another one. (2b) If all founders agree on founder equity vesting balance, your lawyer can easily form your Delaware C-corp for a few hundred bucks. If you want ultimate flexibility, he can form a Delaware LLC and create your LLC operating agreement for around a thousand bucks. But a C-corp should be fine. Pay in cash - don't pay in equity. In any city with a decent-sized tech community there will be lawyers willing to do the above for just a few hundred dollars, in the hope that you'll be successful and get big and give them significant legal work later on. You may need to dig to find such lawyers in your city, but they are there. You will also be tempted to engage lawyers who promise to introduce you to VCs, angels, etc. IMHO this is not that valuable. If you are smart and resourceful, you will find the angels and VCs. If you are building stuff people want, the angels and VCs will invest in you, especially if you make them think you don't need their stinkin' money. |