The time of the new venture formation

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Reference no: EM131808778

1. Each of the following is something that must occur at the time of the new venture's FORMATION, EXCEPT

A. protecting the founders from legal liability

B. identifying the new venture as a legally separate entity

C. assigning any code or IP you have developed on your own to the ownership of the company

D. legally creating your new venture as a Florida LLC

2. A key concept to understand when you are initially allocating equity among the founders is

A. everyone must receive equal percentages of ownership initially

B. only the original founder should be awarded any equity in the startup

C. execution has greater value than the idea

D. incorporating a vesting schedule for stock ownership among owners is poisonous

3. The legal document that a co-founder or early hire most sign in order to purchase shares of stock is called a(n)

A. vesting schedule

B. stock purchase engagement

C. capitalization table

D. ESOP (employee stock ownership program)

4. The number one reason why vesting of stocks among founders is important in startups is because

A. solo founders may become "too committed" to the success of their companies

B. vesting allows shareholders to become more wealthy

C. it allows founders to signal to other employees that "we're in it for the long haul"

D. too many startups see one or more of their founders quit they company with lots of shares and no responsibilities

5. Each of the following is a common (and valid) investor request of startups, EXCEPT

A. pro rata ownership rights

B. being paid extra compensation for serving as an advisor

C. a board seat

D. information rights

Reference no: EM131808778

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