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Questions tagged [start-up]

A startup company or startup or start-up is an entrepreneurial venture or a new business in the form of a company, a partnership or temporary organization designed to search for a repeatable and scalable business model.

9
votes
1answer
3k views

What if somebody invests in my application?

Lately I've been curious on how exactly does investing in a product works, and I've been thinking about this scenario: Let's say I'm creating some mobile application and I manage to get $1m of ...
1
vote
2answers
105 views

What if the vesting period of a startup has not ended when it is acquired? [duplicate]

Suppose employee of a startup company has a vesting agreement, saying she can execute options for 1/4 of total package each year. What if only one year have passed and startup was bought. Which ...
0
votes
2answers
128 views

How to pass on personal debt for R&D to a startup?

I just realized that I've lived frugally for the past year and most of what I make goes into paying off some hasty decisions in 6 digits worth of (now) high APR credit card debt. I've spent quite a ...
8
votes
1answer
202 views

Regulations regarding investing in a private business

There have been a couple of years where, after maxing out contributions to retirement accounts, I've had some disposable money left over that I'd like to invest in something other than publicly traded ...
6
votes
1answer
323 views

Prevented from Rolling Over 401k Due to Company Audit - Legal?

A few months back, the startup my wife works for was bought out by a big company. Everyone was thrilled, of course, and it was a great moment for the whole team. Soon after the logistics of the ...
0
votes
1answer
94 views

Selling options on acquisition

I've been trying to understand this hypothetical scenario wherein a company in which you own options is acquired. In it, the author posits you own .67% and 20,000 shares ($2 strike price, $4 share ...
2
votes
1answer
113 views

Need help negotiating a salary agreement with my boss [closed]

I'm a college student who is interning at a startup company. My job as an intern is to help redesign and launch an app, so that it runs on Android as well as iOS. When I signed up for the job I was ...
15
votes
3answers
3k views

How to compute worth of my equity?

I am a newly appointed consultant to a startup. I work in another organization which forbids me to receive any salary for being a consultant. However, I am allowed to have an equity. The startup ...
1
vote
3answers
261 views

Can a non-profit company make profit? [closed]

My cousin suggested a startup idea to me, I suggested that he could make it a non-profit since it fits all the requirements of an non-profit company and it would be much easier for him to get ...
14
votes
3answers
9k views

Greedy shareholder that does not want to dilute his portion [closed]

What needs to be done or could be done if a company wants to raise capital and one of the shareholders doesn't want to dilute his shares and brands all the others as "too greedy". The shareholders ...
0
votes
2answers
458 views

I want 100% of my currently failing startup. How should I approach this?

4 months ago I officially launched a company with my friend (big mistake I know - live and learn). We are 50/50 partners. He put in $3000 at the beginning because I spent well over a year out of work ...
1
vote
3answers
208 views

How to evaluate a job offer with stock purchase options of a series D company vs series B company?

A late stage series D startup is offering 40,000 shares at a strike price of around $1. I also have another offer from a series B startup offering similar number of stocks at 0.5$. Both these ...
11
votes
5answers
847 views

How did Theranos have any value at all?

Theranos, an infamous case of a tech startup gone bad, was valued at over 9 billion dollars for audacious claims of revolutionizing the blood-testing industry. The trouble is, it had done so with ...
0
votes
1answer
54 views

How to ask investment for one saas product of many? [closed]

I have a company that will have many saas products under it . For now if I ask investment, do I have to offer equity of company just for that one product? Is there a way I can offer equity of just ...
1
vote
1answer
90 views

J1 visa and holding equity in a non-US startup

I hold equity in a start-up based in Singapore as one of its technical advisers on its board. I am not a co-founder, investor or an employee of the company. I do not receive any salary. I am an Indian ...
0
votes
4answers
196 views

Is investing this time in a startup worth it? [closed]

I have an opportunity that involves building a mobile application that basically improves a food industry process. This application has a very good idea, but it is rather hard to implement, so the ...
2
votes
0answers
71 views

Tax implications of U.S. company granting non-qualified stock options (NSO) to a non-resident?

I am a non-resident individual outside USA who has been granted a NSO stock option in a US start-up. I have an early access option on 10000 shares that vest until 2021. I am trying to understand if ...
0
votes
1answer
71 views

Cost categories of a software organization [closed]

I am a lead software engineer that has been asked to become part of a small pre-seed-level software startup. One of the principals has asked me to come up with a 1-, 3- and 5-year estimate operating ...
1
vote
1answer
123 views

Why is there a significant disparity between 409A valuation and fair market value?

I'm at an interesting juncture where I have the opportunity to exercise some ISOs at a startup, and I'm somewhat confused at the disparity between the two valuations. In my case, I can exercise my ...
4
votes
6answers
637 views

How much is a founder allowed to dilute stock? [closed]

I am 9 days away from completing a contract for a new start up that still has yet to raise money. At the beginning I negotiated 1% of the company, and a month into the contract he incorporated the ...
1
vote
1answer
287 views

Canada startup employee equity taxes for stock taken in lieu of a salary?

I am an early employee at a startup, and I took a large equity stake in-lieu of salary. I expect that Canada Revenue Agency taxes this as income when the shares are sold. So in the year the company ...
4
votes
1answer
83 views

As a shareholder in a private company that was acquired, what's the transaction date for my capital gains?

I'm a common shareholder in a US private company acquired in Nov 2017 by a US public company. I'm planning to wait until Jan 2018 to exchange my shares for cash+stock in the acquirer. (The M&A ...
6
votes
1answer
103 views

Tax deduction for stuff I bought before LLC was formed?

I bought $10,000 worth of materials (with my personal credit card) for a new business. I formed a domestic LLC (USA) about 3 weeks later. Can I "sell" or "transfer" this startup cost to my LLC (which ...
0
votes
2answers
92 views

Ordering forms / areas of investment by risk

I have studied investing for a short while and would like to test my knowledge by asking a question about this ordering from lowest risk to highest risk of investment opportunities: Government backed ...
6
votes
2answers
307 views

Is having a 'startup fund' a good idea?

I am a very passionate about saving money and also starting a business. Is saving money and having a startup fund a good idea? Note: I am asking because startups are super risky and 99% of the times ...
0
votes
2answers
107 views

Precedent and models for 100% equity available via initial offering?

In consideration of the most ethical distribution of shares for a startup business (via a public, initial investment event ie- IPO, ICO, or 'crowd-equity-fundraiser') the following occurred to me. ...
1
vote
1answer
377 views

Is it legal to invest in foreign startups as a non-accredited investor?

If a US person doesn't qualify as an accredited investor. Can he/she still invest in foreign startups (early stage companies based outside the US)?
-1
votes
2answers
185 views

Starting a large business with a not so large income? [closed]

It's something people here don't like talking about, but how would one accomplish the funding of a highly expensive business when they themselves don't possess a high income? It would seem that this ...
1
vote
1answer
291 views

Comparing stock purchase plans in offer letter

I have received two job offers both containing stock purchase options. Unfortunately, I have no clue what they mean and how to compare one with another. Company A: It will be recommended at the first ...
2
votes
1answer
152 views

Profiting from the PWC Money Tree

I'll start off by saying I have very little investment experience. So I'd like this to be more of a discussion than a typical question/answer post. Today I learned about the Pricewaterhouse Coopers ...
0
votes
2answers
131 views

Do I need an accountant when starting a business? [NYC]

My wife and I are going to pull the trigger in NYC in the next coming months. I'm attending a few SBA classes in my area and whatnot. I consider myself very good with money in general, and I ...
3
votes
1answer
110 views

100% Ownership and 30% profit to sale director

I am seeking understanding. I 100% own a new service-based tech company. My business is registered as an LLC. I am about to launch and I seek to make sales, yet I don't have the resources to pay staff ...
1
vote
1answer
94 views

What should I do with my stock options?

First, assume I know all the regular disclaimers about seeking professional tax planning/CPA help. I have, but want to balance that with many second opinions :) I have the following vested, ...
0
votes
1answer
4k views

How to offer financing to customers (Used Car Dealership)? [closed]

I'm starting a used car dealership and I would like to offer financing option as a form of payment to my customers (Lately many potentials buyers ask for such). I have few concerns that I need to ...
5
votes
2answers
362 views

Is it possible to make money off of a private company?

I have been made aware of a UK company that I think will be extremely profitable in the next year or two. It is currently privately held and they compete for market share with Intel and NVidia. Is ...
1
vote
1answer
48 views

Moving my online only business to the USA?

I'm looking to form or purchase a US corporation (whichever is easiest/cheapest) (I'm thinking in Delaware) for the benefits of doing business as a US corporation. This corporation will be used to ...
1
vote
2answers
173 views

30% share in business

I currently work at a company that has one director (which is the only other person in the company at the moment). The business is growing quite well, and I have been offered 30% shares over a three ...
3
votes
2answers
261 views

Salary raise: before or after the spin-off / investment?

I have not much experience in dealing with shares, startups and spin-offs and hope for some advice. I work for a company as an "intrapreneur" for my own project but for a salary like a normal employee....
1
vote
0answers
47 views

83B with for contribution of stock with a low basis in a 721 transaction with forfeiture

I have some stock in a small startup (that I work for) that as part of a 721 transaction is being "acquired" by an LLC. Let's say my basis in the stock is $10 and I am to receive $1000 share of the ...
0
votes
1answer
114 views

startup, renting an expensive house, founders, taxation

A startup has 4 people. The startup rents a huge, luxurious house (10k / month rent). The founders live there. At this point, can the startup deduct the rent of the house (as an business expense ...
3
votes
2answers
147 views

Perform exercise-and-hold AND exercise-and-sell-to-cover?

Suppose I was granted 100,000 shares of ISO stock in a startup in the US with a strike price of $1/share and current valuate of $1.25/share. These shares are 100% vested when I leave the company and I ...
3
votes
1answer
141 views

When does the clock start for capital gains treatment on an angel investment?

I made an investment in a startup company last year. I sent the wire transfer on August 4. I have a legal document from the company entitling me to X number of shares on September 1, but my shares ...
1
vote
1answer
85 views

What are the costs to maintain an Inc? [closed]

I am wanting to form an Inc for an internet website like Facebook or Twitter and I am running it out of my home for now. I would want to register my startup in the state of Delaware and I am in ...
2
votes
1answer
37 views

Generic Private Stock Purchase Agreement - Establishing Basis With IRS

I worked with another guy on a startup in 2015 for about a month. I am no longer at the startup but I agreed to fork over my intellectual property developed during that time in exchange for 10,000 ...
1
vote
1answer
78 views

What responsibility does an acquiring company have?

I am a stockholder of a company that is being acquired. The parent company has never reached out to me. What legal responsibility does the parent company have toward the shareholders of the child ...
4
votes
2answers
287 views

Should I accept shares as payment?

My possible future employer offered to pay me in shares of the startup I would join. He dropped sentences like "brutto equals netto" and "We can pay you more in shares than in cash". Obviously there ...
1
vote
4answers
206 views

Why should a company go public?

For someone who holds stock in a privately held startup (through exercised employee options) is it preferable to see the company aiming to go public so that stock can be sold on the open market? It ...
22
votes
9answers
30k views

If one owns 75% of company shares, does that mean that he would have to take upon himself 75% of the company's expenses?

There are two founders in a new company that does not have any profit yet and is financed out of their own pockets. One founder owns of 75% shares, and the other one - 25%. There is a need to spend a ...
1
vote
1answer
215 views

Professional tax for employees - startup in India

If I have online business with one employee who will be working from home, do I need to deduct professional tax as applicable from his salary and submit or I can avoid professional taxes for the ...
2
votes
1answer
187 views

RSU or regular stock awards

I am a new "key employee" (VP level) with a startup biotechnogy company. In the letter of offer the company is awarding stock options. Is it better to get RSUs or regular stock awards or both at ...