[thehme]

Not sure if anyone else picked this up, but for those who don't know everything about startups, this article does not really help. All points are missing more details and some are written assuming you know what is being meant without explaining clearly. For #1, I see that the cofounder did not contribute to the project, but what happened? why? was there a work contract or expectations that were not met? etc. For #2, what does the author mean by "It turns out that not every company in the US is incorporated in Delaware"; the author assumes everyone knows what is means and then adds that they "are incorporated in New York State"?. Then for #3, the author writes:

"I asked what was the matter, and my attorneys said that “regulations” prevented them from sending it. A full two weeks after they received the check, they wired the money back to our investor and they asked him to wire the money to us directly. How embarrassing."

While I think I figured out what was meant, somewhat, aside from the "regulations" part, it was not clearly describe who was asking who what and why exactly. I still don't understand what was not done correctly by the friend attorney.

[Breefield]

Regarding #3, the regulations were "blue sky laws," which are more appropriate for shady securities that scam elderly women into giving away their pensions to hucksters.

This wouldn't have happened if the friend attorney was used to dealing with startups.

[jesusmichael]

I doubt it was a "blue sky" issue. Since it seems like it was an "Accredited Investor" and they would have signed an waiver to that effect.

Probably had more to do with the firm acting as a broker in the deal, and violating some state statute on unlicensed brokers/dealers. They deposited the funds, so they would be acting as an intermediary. If unlicensed could face serious fines.

[thehme]

Hummm...ok, thanks, I will look into this and see if I understand it better.