Overview
The Landscape
Early-stage companies face a distinctive set of legal challenges — building a founding team, protecting core IP, raising early capital, and signing the first meaningful contracts, all while managing cash and moving quickly. Shah Grossi works with startups and growth-stage companies to build legal infrastructure that supports scale without slowing you down.
Key Legal Challenges
- —Getting the entity structure right from day one
- —Protecting core IP before it walks out the door
- —Raising capital in compliance with securities laws
- —Hiring employees and contractors correctly under California law
- —Negotiating the first major commercial contracts and leases
Common Scenarios
Problems We Solve
- 01
Founders issue equity casually — verbal agreements, missed 83(b) elections, no vesting, no IP assignments — and the issues surface during the first financing diligence when the leverage is already with the investor.
How we help: Business Formation
- 02
A friends-and-family round raises money without offering documents or Form D filings, creating rescission exposure across every investor while the company tries to close a priced round.
How we help: Capital Raising
- 03
Early engineers and contractors build core product without IP assignment agreements in place — leaving ownership questions that either derail a financing or require expensive catch-up assignments later.
How we help: Intellectual Property
- 04
A term sheet from the first institutional investor includes governance provisions that look standard but materially constrain the company's operational flexibility — and founders sign without understanding the impact.
How we help: Business Law
Our Work
How We Help
Entity formation, capitalization, and founder agreements
IP strategy, trademark registration, and confidentiality agreements
Seed and early-stage securities offerings (SAFEs, convertible notes, Reg D)
Employment agreements and contractor classifications
Commercial contract drafting and negotiation
Board governance and investor relations documentation
Legal Services
Related Practice Areas
Common Questions
Frequently Asked
Q.What legal work should I do before I take any outside money?
Form the right entity (usually Delaware C-Corp for venture path, LLC for bootstrapped), execute founder equity documents with vesting and 83(b) elections filed within 30 days, execute IP assignment agreements covering all founders and early contributors, authorize an equity incentive plan, and obtain a 409A valuation before any option grants. This foundation makes every subsequent financing and hire simpler and protects the cap table from retroactive cleanup.
Related: Business Formation
Q.SAFEs or convertible notes for my seed round?
SAFEs are simpler — no interest, no maturity, no repayment obligation — and are the dominant instrument for pre-seed and seed raises in the current market. Convertible notes are debt and provide investors a repayment fallback if the company does not reach a priced round. Key terms in either instrument are the valuation cap, the discount, and the conversion triggers. Most-favored-nation provisions and pro-rata rights are common and reasonable; control provisions in a SAFE or note are typically not appropriate.
Q.How do I protect IP created by engineers and contractors?
Every founder, employee, and contractor who contributes to core product must sign an IP assignment agreement — typically a Proprietary Information and Inventions Assignment Agreement (PIIA) for employees and a work-for-hire plus assignment clause in contractor agreements. Without these, the contributor may have ownership claims to the work they contributed. Retroactive assignments are often required during diligence but are more expensive and more fragile than agreements executed at the time.
Related: Intellectual Property
Q.What should I know about my first venture term sheet?
Economic terms to negotiate: valuation, liquidation preference (1x non-participating is market), anti-dilution (broad-based weighted average is market). Governance terms to negotiate: board composition, protective provisions (investor vetoes), information rights, and participation rights. Pro-rata, right of first refusal, and co-sale provisions are standard. A term sheet with reasonable economics but investor-favorable governance can make the company difficult to operate — both dimensions matter equally.
Related: Capital Raising
Q.Can I hire remote employees in other states?
Yes, but each state where an employee resides creates employment tax, workers' compensation, unemployment insurance, and labor-law compliance obligations. Payroll, tax registration, state-specific handbook provisions, and state-specific policies must be in place before payroll starts. For high-compliance states (California, New York, Massachusetts, Illinois), the setup is significant. For lower-complexity states, setup is straightforward but still non-trivial.
Related: Labor & Employment
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