Before Launching Your Business With Family & Friends Funding

Before Launching Your Business With Family & Friends Funding

June 30, 2020 by investor

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

Many startups raise funding from family and friends on their first round to get the startup going.

Before launching, make sure you do the following: 

Co-founders should agree on the equity split for each one and document the ownership agreement legally.

Intellectual property (IP) needs to be assigned to the startup, including programming code, product designs, product trademarks, and domain names.

If you are hiring employees you need to establish a stock-incentive plan to enhance their compensation package.

You are accepting investment funds so you need a legal entity. You’ll setup either an LLC or a C-Corp. For an LLC, you give membership units for an LLC, and shares for a C-Corp.

You are starting a business so you’ll need a business bank account. For this you’ll need a Federal Tax ID (also called an EIN) to complete the process.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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Copyright (c) 2020, Hall Martin and All rights reserved.

Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.