Some interesting links we found across the web this week:
Will tech IPOs come back to life in the
fall?
2016 has been the slowest year for IPOs since 2009, likely because
of new issues raised by recent tech companies going public, but VCs
are beginning to hear rumblings of a resurgence. Here's the
latest update from VentureBeat, and be sure to click
through to WilmerHale's 2016 IPO Report (linked in the article)
for a much deeper dive on the recent state of the market.
What to Know Before You Sign a Payment-by-Results
Contract
Among the common legal concerns of most early-stage companies is
ensuring that contracts with other service providers are clearly
drafted to eliminate future disputes. As this piece from the
Harvard Business Review reminds us, that clarity is more
difficult to achieve when payment is contingent upon the subjective
quality of the provider's results, as opposed to an objective
and quantifiable delivery from the provider. Payment-by-results can
be useful, but be sure to proceed with caution.
How Big Does A Company Have To Be Before It Needs
A Board?
You'll technically have a board of directors from the day you
incorporate, but how large or complex must the company be before
the board begins to expand beyond the company's founders?
It's most likely to happen after your seed round, but check out
this piece from Forbes for a little more detail from a
seasoned management consultant.
White House Proposes Loosening Restrictions For
Immigrant Entrepreneurs
As we mentioned last week, an upcoming executive action on
immigration is expected to make it easier for foreign founders to
remain in the US for up to five years of active involvement in a
startup. This week we caught this short interview on the subject
with an immigrant VC who exclusively invests in immigrant
entrepreneurs. Give it a listen for important perspective on an
issue that is not going away anytime soon.
The Life-Changing Magic of Turning Employees Into
Shareholders
Speaking of issues for next year, The Atlantic has a
spotlight on employee profit-sharing plans that are an alternative
to the option pool most startups use to incentivize their workers.
The key difference is that, unlike options, profit-sharing plans
give the employees a collective ownership stake in the company.
Profit-sharing is likely too fraught with regulatory issues to be
worthwhile for most startups, but it's worth keeping in mind as
startups' voices in Washington grow louder with each passing
year.
Links compiled by Jared Brenner.
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