With the new year comes a new opportunity to pursue business ventures. Let 2018 be your new canvas to craft your enterprise. At Avisen Legal, we bring our 100 plus years of collective legal experience to business owners to help them navigate the travails of starting, owning and operating a business.
Using the following 12 decision points – one for each month – we will provide entrepreneurs with the Lessons we have Learned through our many years of practice. We will provide content on our website: www.avisenlegal.com plus a series a free seminars and presentations on these topics throughout 2018.
Welcome to Avisen Legal’s Lessons Learned Series for 2018
January – Entity Selection
Many early stage entrepreneurs belabor the question of whether to form a corporation or a limited liability company. Answering this question involves the consideration of many factors including, industry type, owner participation, capitalization and exit strategy as well as taxation. Start-up entrepreneurs should focus less on the “what” sort of business to form and more on the “when” to form a business entity. Legally, incorporating a newly formed business into any sort of business entity is better than engaging in business start-up activities as a sole proprietor. The law easily allows us to “correct” entity selection missteps. Drawing upon our lessons learned, an entrepreneur should form some sort of entity as soon as he or she starts to spend money (and not only his or her own time) on activities related to the start-up.
Here are some resources to help with the decision: Selecting and Forming Corporate Entities; LLC, C-Corp, or S-Corp: Which Entity do you Select?
Avisen Attorneys to contact about this topic: Kim Lowe
February – Bitcoins/ICOs
Many entrepreneurs will need to raise money from outside investors to launch or take their business to the next level. In recent years, interest has been growing in “Initial Coin Offerings” (ICOs) as a means of raising money. ICOs involve creating a “cryptocurrency” (such as Bitcoin) or other blockchain-based token that a company offers to investors in exchange for their investment. In theory, the token represents a license to use the company’s product, or some other interest in the company that appreciates in value over time. Conducting an ICO offering legally requires a very careful analysis of securities laws, which put restrictions on the who, how, how much, and when you can raise money for your business. Failing to adequately account for and comply with securities regulations can lead to enforcement actions by federal and/or state regulators or investor lawsuits, any of which could force you to return any money you received, plus pay significant penalties. This month we will team up with Minnesota’s resident cryptocurrency and blockchain expert, David Duccini, to discuss our combined lessons learned regarding the risks and opportunities surrounding ICOs.
Here are some resources to help you understand the wild world of cryptocurrencies and ICOs: What You Should Know About ICOs; Answer to ICOs and Bitcoin: Uniform Regulation of Virtual-Currency Business Act
Avisen Attorneys to contact about this topic: Kim Lowe; Brian Edstrom
March – Community Solar
Over the past several years, Minnesota has experienced significant growth in “community solar” projects. This increase is due largely to legislation passed in 2013 that required investor owned-utilities to obtain higher percentages of their electric power from solar energy. Many (us included) see the growth in community solar as a positive development for Minnesota. However, questions remain as to how solar developers can best finance their projects in a manner that attracts investors and complies with securities regulations and other consumer protection requirements. In this session, we will help entrepreneurs interested in solar projects navigate some of those questions.
Avisen Attorneys to contact about this topic: Kim Lowe; Brian Edstrom
Lessons Learned: Community Solar Event
April – Technology Contracts and Negotiating Technology Agreements
In our digital age, most entrepreneurs will at some point use another company’s technological product or service. Some will develop their own technology that they sell or license to others. In either instance, entrepreneurs will need to draft and negotiate carefully-worded contracts to ensure their rights and interests are adequately protected. In this session, we will draw from many years of Lessons Learned through drafting, reviewing and negotiating agreements to talk you through the good, bad and the ugly of technology contracts.
Avisen Attorneys to contact about this topic: Larry Fox
May – Your First Commercial Lease
Most startups will eventually need to think about when to move out of the home office, the garage, or an office share and into a space that works for your business. At an early stage, most companies are not in the position to buy real estate, so your startup will likely be leasing space. Further, getting into a new space that reflects your startup’s culture and meets your space needs doesn’t happen overnight. We have learned that an entrepreneur should interview and engage a commercial real estate broker and commercial real estate lawyer early in the process. Such an assistant can help you develop a plan to search the market, negotiate hard on the right business terms and make sure that the lease accurately reflects your business deal. In this session we will help you identify first steps towards entering into your first commercial lease.
Avisen Attorneys to contact about this topic: John Saunders
June – The Bugaboo of the Workplace: Managing Whistleblower Risk
In recent years there has been a dramatic increase in whistleblower legislation and regulation at both the federal and state level, and employees are better informed about their rights and obligations to make both internal and external reports of instances of suspect corporate illegality and non-compliance. This legislation also has brought with it significant protections for employee and non-employee whistleblowers. Corporate whistleblowers can appear on the scene for any-sized business, making complaints about alleged or suspected misconduct ranging from discrimination to harassment to wage and hour to tax and securities fraud. (livingproof.co) Some statutes offer successful whistleblowers bounties ranging from 10-30% of the government’s recovery where are complaint leads to the successful prosecution of a corporate wrongdoer. Not surprisingly, the frequency of whistleblower complaints, both those with and without merit, has increased. We draw lessons learned from our experience handling whistleblower complaints and lawsuits against businesses, some of which successfully navigated, some not, whistleblower allegations and actions, lesson that can guide you in this important risk management task.
Avisen Attorneys to contact about this topic: Bill Egan
July – When is a Consultant Not a Consultant
As you grow your business, you may find that you need the assistance or expertise of others to get through a challenge or tackle an opportunity. As you search for that perfect person to help, you will likely find there is a “consultant” available for every need. Over the years, we have learned that hiring a consultant is not always problem-free. An entrepreneur will need to carefully draft and negotiate a consultant agreement to ensure that the scope of services (and the fees for those services) are properly defined, that your trade secrets, confidential information and other intellectual property are protected, that the consultant is not able to leverage the experience in an unfairly competitive way, and to make clear to the consultant (and to regulators) that the consultant truly is an independent contractor, and not an employee, of the company. We will help you identify key provisions in a consulting agreement to include or avoid.
Here are some resources to help you identify an employee vs. an independent contractor: Your Favorite Salon Has No Employees… Really
Avisen Attorneys to contact about this topic: Bill Egan
August – Swipe Left: Saying No to a Business Partner
A lot goes into choosing the right business partner. We have seen entrepreneurs both rise and fall on account of who they choose to work with. Ultimately, a good business partner is someone who fills a needed gap in the entrepreneur’s experience or skill set, and who is able to adapt to and accept the culture the entrepreneur hopes to develop. If you have doubts about a potential partner’s ability to meet these criteria, it is better to act on those doubts early than to suffer the consequences later. In this session, we will share with your stories of success and of failures to help you identify when it’s time to swipe right on your business partner.
Avisen Attorneys to contact about this topic: Todd Taylor
September – Mixing Business and Passion: The connective tissue of Social Enterprises
Say you want to show to the world that your business has heart, as well as brains. That you want to do good while you make money. The landscape of enterprise options available for entrepreneurs today is vast. Social entrepreneurs – those who want to pursue a social mission – have many more options on how to establish, capitalize and operate social enterprises. There is no longer just one type of business form for the social entrepreneur. Social entrepreneurs need to understand and appreciate all of the options available to them to pursue sustainability and social impact.
Here are some resources to help you understand what makes a social enterprise: Benefit Enterprises: The Difference Between a Benefit Corporation and a B Corp
Avisen Attorneys to contact about this topic: Kim Lowe
October – Selling Your Business
All entrepreneurs should have an exit plan in mind as they form and grow their business. For many, that plan involves selling the business to the highest bidder. Minnesota’s mergers and acquisitions (M&A) market has been strong over the past few years, and continues to be strong in early 2018. Time will tell whether and how recent tax changes and fluctuations in the market will allow this seller’s market to continue. In this session, we draw from Lessons Learned assisting many companies through M&A transactions to help you identify what to watch for in preparing to sell your business.
Here are some resources to help you identify opportunities for selling your business: Minnesota M&A in 2018? Land of 10,000 Mergers?
Avisen Attorneys to contact about this topic: Todd Taylor
November – The Fallacies of At-Will Employment
As entrepreneurs expand their business and hire employees, they take on new risks—both financial and reputational. One way to manage those risks is through a well-crafted employment contract. Most employees in the United States work on what is said to be an “at will” basis. Though at-will employment may sound simple, it often misleads entrepreneurs and other business owners into a false sense of security when it comes to termination of the employment relationship. In this Session, you will learn the fallacies that hide behind the so-called all-encompassing employment-at-will doctrine and what steps you can take to avoid violating one or more of the dozens of exceptions to this general at-will standard.
Avisen Attorneys to contact about this topic: Bill Egan
December – Company Valuations
Whether raising money from investors or preparing to sell your business, you may ask (or be asked): how much is your company worth? We have learned there is no perfect answer to this question and, like selling anything else, it all depends on what a buyer is willing to pay. That said, many a company has failed to launch because it would not change an overly aggressive valuation. An unrealistic valuation ultimately results in a company that fails to gain the interest of investors. A common saying among start-up advisors to founders is “would you rather have x% of something big or 100% of nothing?” In this session, we will help you
At Avisen, we are committed to empowering our clients with the tools they need to do it right and succeed with their business endeavors. The Lessons Learned events are a series of monthly cohort style events held throughout the Twin Cities where start-up entrepreneurs and seasoned advisors can connect, discuss and work through the various Lessons Learned!
