Archive | July, 2007

Why every business with 2 or more owners needs a buy-sell agreement


A buy-sell agreement is a document that preserves continuity of business ownership when specific events occur, such as death or disability of a business owner. It is a contract between shareholders or business partners concerning the future ownership of the business and can be drafted as part of the company’s shareholder agreement or as a separate agreement.

The buy-sell agreement typically controls events triggering shareholder buyout, persons that may purchase the departing shareholder’s stock, the valuation of the departing shareholder’s stock and how the buyout will be funded.

The advantages of a buy-sell agreement are that it sets out a strike price well in advance for the departing shareholder’s stock, creates a market for the business interest (which can be extremely difficult in closely held corporations) and assures business continuity for the remaining active owners, employees, customers and creditors.

Posted in Corporate LawComments (5)

Venture Capital: here today, gone tomorrow?


The tech staff at FORTUNE recently published a blog article about the long-term prospects of the venture capital industry.

Indeed, the venture capital industry is currently facing pressures (potential higher taxes on gains, competition from angel investors because of startup’s reduced capital needs, etc.). But these headwinds are temporary obstacles rather than the beginning of the end of the venture capital industry. My hypothesis derives from my infatuation with the Solow Growth model which was pounded into my head by various professors of economics before law school.

In Solow, technology plays a gigantic role in long-term economic growth and I just can’t imagine venture capital, being such a facilitator of technology, getting the permanent squeeze.

Posted in Venture CapitalComments (0)

Why every entrepreneur should listen to 2Pac


Most people would not consider 2Pac a source of wisdom or inspiration–but entrepreneurs are not like most people. Every entrepreneur knows to seek mentorship and guidance, but successful entrepreneurs know these sources should not be limited to those with fancy offices or degrees.

If you take the time to listen to his work, you will find lessons about dealing with setbacks, personal struggle, reinvention, the competition, things you can’t control, the required work ethic and the importance of taking the time to “plan, plot, strategize.”

So the next time you are about to purchase some business guru’s latest audiobook, pick up a copy of 2Pac’s “The Don Killuminati: The 7 Day Theory” instead. And listen.

Posted in Startup IssuesComments (1)

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