By Rick Colosimo / February 6, 2017 / Comments Off
This WSJ article describes some of the problems that small businesses have faced with names. The most significant one, from my perspective, is the trademark lawsuit that cause the cookie company to change its name after being featured on the “Rachael Ray Show.” What a waste of potential marketing value! Over the years, I’ve serviced…
By Rick Colosimo / February 19, 2014 / Comments Off
A friend recently asked me about Startup-NY, New York’s new program ostensibly designed to help foster startups. As you might expect, the bark is better than the bite. Fundamentally, there are a bunch of complicated rules, exceptions, and requirements, and some conveniently unstated limits. Now, since I think the prerequisites will gut most of the…
By Rick Colosimo / August 6, 2013 / Comments Off
This Lifehacker post attempts to answer the question of how someone should handle befuddling legal documents, like terms of service, leases, car rental contracts, and so on. The easy answer is in the article: of course you should read everything. The problem is that that’s not what lawyers actually say and do because it’s advice…
By Rick Colosimo / July 19, 2013 / Comments Off
This WSJ law blog post references a Georgetown constitutional law professor who thinks we should get rid of the Constitution because, effectively, he’s smarter than 200+ years of Americans and will get it exactly right. You should know that law journals are not edited by professionals, and law review articles are not subject to anything you would…
By Rick Colosimo / June 6, 2013 / Comments Off
It happens every week. A client sends a short email describing a contract they want, or even a term to be added to an employment agreement for a new hire. This post on issue spotting by Ken Adams shows you what a good lawyer thinks when she hears: Oh, and Jane should work out…
By Rick Colosimo / February 8, 2012 / Comments Off
Several years ago, I switched my law practice from mass torts (plane crashes and shipwrecks) in New York City to corporate law at a large Silicon Valley law firm. As a result of that experience and clients I worked with in the years following the dotcom bust, I developed a number of simplifying rules about…
By Rick Colosimo / January 31, 2011 / Comments Off
I recently came across a LinkedIn question asking about entity selection for a social enterprise. The generic question for a generic business is what people often conceive of as an “easy question” with a simple answer. Here’s my answer: Laura, the question you ask is only properly answered in light of more important questions. I’ve…
By Rick Colosimo / November 17, 2010 / Comments Off
Here’s a LinkedIn question about LLC operating agreements. The poster wonders whether the operating agreement he received from the entity formation company is a little “generic” and asks the forum for specific advice about what should be included. The answers point to some provisions that should be included (division of gains and losses, breakup/buyout/dissolution schemes,…
By Rick Colosimo / October 12, 2010 / Comments Off
This post on the use of the term immediately, one of many similar explorations by Ken Adams, is the sort of thing that attracts me to contract drafting. There is a lot to be said for using the right language to convey an idea: language that is clear, concise, hard to misconstrue, and simple without…
By Rick Colosimo / September 9, 2010 / Comments Off
Here’s a question on quasi-nonprofits that I’ve been hearing more often: Do I need to have a nonprofit status to become a social entrepreneurial enterprise? I found this LinkedIn question to be interesting for two reasons: first, it’s very related to a nonprofit question I field all the time, and second, I have a current…
By Rick Colosimo / September 5, 2010 / Comments Off
I have more than one client currently considering convertible bridge notes as a parallel angel/seed round funding technique, and I have one who recently closed a small convertible note that will convert in the upcoming seed round. What’s a convertible bridge note? A convertible bridge note is a not-uncommon financing instrument in venture capital. This…
By Rick Colosimo / August 9, 2010 / Comments Off
Due diligence is the catchall phrase used to describe both the amorphous investigative process that prospective investors and acquirors go through before, during, and after their initial decision to proceed with a transaction with your company as well as the materials (paper, electronic, and Q&A) that they and their advisors receive in response to their…
By Rick Colosimo / June 18, 2010 / Comments Off
This LinkedIn question asking about reverse mergers is a question I’ve answered for a lot of entrepreneurs who get pitched by these folks and are invariably misled confused about where, how, and whether this deal brings money into the company. “What is a reverse merger or reverse IPO?” Short answer: “reverse merger” is almost always…
By Rick Colosimo / May 28, 2010 / Comments Off
Here’s a link to a brief article about crowdsourcing as applied to startups. Grade for this article? Nominally 80% for 4 out of 5 right, but the wrong answer on financing can kill a company. This one gets a #FAIL from me. Hearkening back (or forward, since I don’t know if I’ve posted it yet)…
By Rick Colosimo / May 28, 2010 / Comments Off
I’ve written before about the growing inconsistency between the actual job market for lawyers and the jobs that law schools tell prospective students about. Here’s a recent Above the Law post on a job that really doesn’t appear all that worthwhile, really. This is a downgrade from the $12 job they link to at the…
By Rick Colosimo / May 25, 2010 / Comments Off
This interesting Neuromarketing post on a proposed Australian law to eviscerate the branding value of cigarette packaging is a doozy. Separate from the inherent interest in the notion that the pack may be far more powerful than the cigarette (and I like both Why We Buy and Call of the Mall by Paco Underhill as…
By Rick Colosimo / May 20, 2010 / Comments Off
Crowd-everything is super hot, and super cool. The vastness of Wikipedia alone is sufficient to teach every one of us that when “crowd” is applied to your field, really neat and seemingly impossible things can happen. To me, “crowd” is just the plural of “open,” as in open data. But crowd doesn’t always work, and…
By Rick Colosimo / May 20, 2010 / Comments Off
Many of my readers have seen my “Five-minute General Counsel” blog post series. The idea is to give readers an informed opinion that, while not specific to their situation, highlights some of the major issues involved in various decisions, such as whether to form an LLC or corporation for your tech startup. (Hint: read this…
By Rick Colosimo / May 2, 2010 / Comments Off
Here’s another LinkedIn-derived question that merits a better answer. The question was essentially whether the fellow with some IP to build a business on should form an LLC or a corporation. In typical LinkedIn fashion, off-the-cuff answers that are specific end up being wrong. In my mind, if someone is asking this question, they either…
By Rick Colosimo / April 13, 2010 / Comments Off
I was in Wikipedia for some reason earlier, and a click or two later, I was reading the entry for Alfred Korzybski, the inventor/founder of general semantics. (I’d had the book on a list of books to read for a reason that has long since escaped me, but it seemed hard to find, and I…
By Rick Colosimo / October 27, 2009 / Comments Off
Today I was asked about my recent Five-minute lawyer series of posts. To me, these sorts of posts add lots of value for readers who have these questions at little real detriment to me; after all, I already know the answers to these general questions. Is sharing knowledge a good strategy? I obviously think so,…
By Rick Colosimo / October 25, 2009 / Comments Off
You’ve probably already seen our Five-minute Lawyer post on How to Form a Nonprofit, but sometimes people are at an earlier stage of the process, where they haven’t figured out what they exactly want to do. This process looks a lot like planning a for-profit business in the early stages, but here are a few…
By Rick Colosimo / October 14, 2009 / Comments Off
This site, COA.TX, has an incredibly straightforward tagline: Quick Reference for Causes of Action and Affirmative Defenses in Texas. — Caselaw Snippets from Recent Texas Appellate Opinions. Lawyers with a national practice (often driven by national clients) can spend a surprising amount of time pulling specific quotes from the relevant jurisdiction to either get complaints…
By Rick Colosimo / October 13, 2009 / Comments Off
I regularly answer corporate governance questions on LinkedIn. Where should I incorporate or form my entity? After you’ve decided that it’s in your interest to form an entity of some kind, the next question is where to form that company. Most people know that Delaware is the 800-pound gorilla in this field. Many have also…
By Rick Colosimo / October 13, 2009 / Comments Off
I often get questions asking about entity selection when someone is considering incorporating. Here is a summary of some general ownership structure issues. What do all these entities do? This introduction will make it easier for you to come up with questions that will help you select the best alternative for your specific situation. There…
By Rick Colosimo / October 12, 2009 / Comments Off
Another LinkedIn user asked about how to structure a startup that would be a typical VC-funded software company. Here’s my edited answer: As someone who’s represented dozens of startups, closed probably 100 venture deals, and cleaned up too many small companies to count, there is in fact a right way and wrong way to do…
By Rick Colosimo / October 9, 2009 / Comments Off
People often ask about what entity they should choose for their new business, not knowing that the real first question is the one they skipped over without even realizing it. Should you incorporate? Short answer: you should probably just buy insurance instead. Entity types to consider include the corporation (with S- or C- taxation), limited…
By Rick Colosimo / October 9, 2009 / Comments Off
Here’s another common question I get: I’m onto a new startup idea. How much would you charge to incorporate? Do you have any advice as to where to incorporate? Here’s my usual answer: I’ve done this sort of work for companies under firm quotes of $2000 + state filing fees for a full incorporation package,…
By Rick Colosimo / October 9, 2009 / Comments Off
I regularly find people asking this question: How do I form a nonprofit? What most people mean and want is a charitable organization that satisfies the requirements of IRC 501(c)(3), which gives donors assurance that their donations will be tax-deductible. To set up a charitable organization, you generally run through the following steps: 1. Determine…
By Rick Colosimo / October 9, 2009 / Comments Off
Kat Shoa asked about licensing audits on LinkedIn: How do you know if your IP licensees are paying you properly? I sat on a presentation about royalty audits today and think it’s a fantastic to collect due royalties – wrote about it here[.] But I’d be interested to know what other methods are used to…
By Rick Colosimo / August 17, 2009 / Comments Off
This editorial at the WSJ talks about some commonly advanced alternatives to current health-care/health-insurance reform legislation. As a law student, I took a whole class on insurance law; I practiced insurance defense law (in mass torts, not individual personal injury cases); and I’ve studied the economic principles relating to insurance law (in fact, I keep…
By Rick Colosimo / August 12, 2009 / Comments Off
In a recent post referring to Ted Wang’s “simple series A” proposal, I noted that I would separately discuss legal opinions. Non-lawyers, and lawyers new to transactional practice, have probably never really heard of a legal opinion or what it does. Briefly, the legal opinion letter is a carefully prepared document that is designed to…
By Rick Colosimo / August 12, 2009 / Comments Off
Writing about Ted Wang’s “simple series A” reminded me of this idea I came up with years ago. One alternative to drafting that I’ve always liked: “check the box” forms.” During any moderately stable period in Silicon Valley, certain terms become “market,” meaning that there’s little real dispute about them in substance and only some…
By Rick Colosimo / August 12, 2009 / Comments Off
This article on a simpler approach to smaller Series A venture capital financings was written by Ted Wang, a partner at Fenwick & West, a well-known Silicon Valley law firm. Caveat: Ted and I worked on a deal several years ago where he represented the investors and I the company. So, my opinions of Ted’s…
By Rick Colosimo / March 24, 2009 / Comments Off
This recent Seth Godin post was another timely suggestion from Seth. (My probable #1 reason for subscribing to his blog is that he seems to really have a finger on the pulse of what is going on, with timely, succinct, no-fluff posts on issues that are popping up for me in the days right before…
By Rick Colosimo / February 23, 2009 / Comments Off
Over on LinkedIn, this question caught my eye: How much do founders get diluted through exit? This isn’t a new question.I regularly answered it for founders, employees, and even angel investors during my time at Brobeck in Silicon Valley. There are lots of people concerned about “dilution” without really knowing what it is. Dilution means…
By Rick Colosimo / February 17, 2009 / Comments Off
The WSJ Law Blog recently noted a suggestion by — that law firms reduce starting salaries for their lawyers in exchange for some sort of (read: unenforceable) promise to keep things together for some period of time. There are a range of problems that I see with this proposal, and here are some suggestions as…
By Rick Colosimo / February 7, 2009 / Comments Off
I have been dismayed by the assumptions inherent in the pay cap proposals, as well as the vast number of ways to apparently avoid the restrictions. But this opinion page article in the WSJ, by a current Fox news legal correspondent and former state court judge, is more way more opinion than article, more bald…
By Rick Colosimo / January 30, 2009 / Comments Off
In response to this WSJ law blog post, I provided the following comment: Almost loathe to comment on such a complex issue. First: I am a former Army infantry officer who directly led troops; my own leadership/discipline resume includes enlisted infantry basic training, officer candidate school, airborne school, Ranger School, and a few others. There…
By Rick Colosimo / January 23, 2009 / Comments Off
Eliminate words no one uses from your writing to make it flow more smoothly.
By Rick Colosimo / December 10, 2008 / Comments Off
This is an update to my post on law firms as Ponzi/MLM schemes. In the wake of the turmoil in the financial world, there have been a variety of articles discussing whether different governance structures (entirely different, not just better corporate governance) would have perhaps made a difference. Of course, it all comes back to…
By Rick Colosimo / December 9, 2008 / Comments Off
In our business, we focus a lot on the use of weighted averages in analyzing business problems. An article in today’s WSJ discusses the seemingly disproportionate and unexpected role of Chuck E. Cheese restaurants in arrests for fights. This article reminded me of an idea I had many years ago while interning at the Tompkins…
By Rick Colosimo / August 24, 2008 / Comments Off
I spent some time on Thursday morning in a courtroom full of very expensive lawyers. The associates were few and far between, as were the women (but that’s a different story). Later that afternoon, I spoke with a former officemate of mine from when we were both second-years at a large NYC law firm. These…