Incorporation Lawyer

Before you accept SAFE investment, the usual baseline is: the entity formed (for venture money this is almost always a Delaware C-Corp), founder stock actually issued under signed stock purchase agreements, 83(b) elections filed where stock is subject to vesting, IP assigned from every founder and contractor, and a single cap table that records each SAFE with its valuation cap or discount. A SAFE is a real financing instrument: when it converts at your next priced round, it dilutes the founders, so you want to understand the post-money math before you sign, not after. A common mistake is treating a SAFE as "free money now" and discovering the dilution at the priced round.

Investors and their counsel generally expect to see, on day one of diligence: a Delaware C-Corp in good standing; a clean, single source-of-truth cap table; signed founder stock purchase agreements with vesting; timely 83(b) elections on file; full IP assignment from every founder and contractor; stock issuances properly authorized and documented by board consent; and no informal or undocumented equity promises floating around. The most frequent fundraise-readiness gaps I see are a missing or out-of-date 83(b), IP that was never assigned in from a contractor, and a cap table that lives in three different spreadsheets. None of these are fatal, but each one tends to surface in diligence and slow the round.

Advisor equity is usually small and always documented. A written advisor agreement (the FAST template is a common reference point) typically grants a fraction of a percent up to low single digits depending on the advisor's stage, time commitment, and profile, almost always as a stock option or restricted stock that vests over time, commonly around 2 years of monthly vesting, sometimes with a short cliff, and with the agreement spelling out the advisor's role, confidentiality, and an IP assignment of anything they contribute. The trap to avoid is a verbal or "we'll figure out the paperwork later" equity promise: an unvested, undocumented advisor grant is a classic diligence red flag and can be hard to unwind. Exact numbers depend on your facts, so treat ranges as general information, not a recommendation.

The core idea: anything a contractor or consultant builds for the company should be owned by the company, in writing, ideally before they start the work. "Work made for hire" language alone is not enough for many deliverables under US copyright law, so a solid agreement pairs it with a present-tense assignment ("Contractor hereby assigns"), a further-assurances clause, a waiver of moral rights where applicable, and confidentiality. If contractors already did work without that paperwork, the fix is a present-tense confirmatory assignment signed now. A missing or future-tense ("agrees to assign") contractor assignment is one of the most common things investors flag, because the company may not actually own its own code or designs.

A pilot or design-partner statement of work should let the customer try the product without leaking the core IP. The pieces that do that work: a defined scope and acceptance criteria so "done" is clear; ownership that keeps your pre-existing IP and any improvements with the startup, with feedback giving the customer at most a license back, never an assignment of your platform; confidentiality both ways; no implied warranties for a pilot (pilots are evaluation, not a production guarantee); a limitation of liability capped at fees paid; clear data-handling terms; and a fixed term with a clean exit so the pilot does not silently roll into a perpetual free deployment. The goal is a usable pilot that does not hand a customer rights to the thing you are building.

For an AI or security pilot, the contract should ship the product without taking on uncapped product liability. The framing that does that: state clearly whether the system is advisory / log-only or actually blocking, and do not promise the control layer catches every risky action; no system does. Pair that with a strong limitation of liability, customer-responsibility and human-in-the-loop language (the customer keeps a human reviewing material decisions), security and data reps scoped to the pilot rather than to a full production deployment, incident-notification terms so both sides know who tells whom and when, and an explicit no-professional-advice warranty if the output could be read as legal, medical, financial, or safety advice. The point is to be honest about what the product does and does not guarantee, and to make sure the contract matches that reality.

A clean legal data room groups documents so diligence moves fast. Corporate: charter, bylaws, board and stockholder consents, the cap table, 83(b) elections, and stock purchase agreements. IP: founder, contractor, and advisor assignment agreements, trademarks, and a list of open-source usage. Commercial: customer, vendor, and design-partner contracts. People: offer letters, confidentiality and invention-assignment agreements, and contractor agreements. Financing: prior SAFEs or convertible notes and any side letters. Compliance: licenses, privacy, and any regulated-area items. The detailed, sectioned version is in the SAFE + cap-table readiness checklist below; assembling it before you pitch is the single highest-leverage thing you can do for a smooth round.

The recurring red flags that surface in early diligence: missing IP assignments from founders or contractors; founder stock with no timely 83(b) election; verbal or unvested advisor equity promises; missing board consents for issuances and key decisions; open-source license contamination (a copyleft license pulling obligations onto your code); customer contracts with assignment or change-of-control traps; and no single source-of-truth cap table. Most of these are fixable, and fixing them before you pitch is far cheaper than letting an investor's lawyer find them mid-round. The full corrective checklist is in the readiness checklist section below.

Before your first priced round, be cautious about signing: broad IP licenses or assignments to design partners or customers; exclusivity or most-favored-nation clauses that bind you to one partner; uncapped indemnities; personal guarantees; advisor equity without a vesting schedule and cliff; a SAFE before you understand the post-money dilution it creates; contractor work without a present-tense invention-assignment; and NDAs with residuals clauses that run against you (where the other side can freely use anything their people "remember"). None of these are automatically wrong, but each can quietly transfer value or rights out of the company, and several are exactly what an investor's counsel looks for. When in doubt on a specific document, that is what the $240 Written Attorney Consultation is for.

This is the document-level checklist behind a fundraise-ready Delaware C-Corp. Use it to find your gaps before an investor's counsel does. It is general information, not legal advice, and not a guarantee of any financing outcome.

Corporate & equity

Delaware certificate of incorporation and bylaws; board and stockholder consents authorizing issuances; founder stock purchase agreements with vesting and repurchase rights; 83(b) elections filed within 30 days of restricted-stock grants; an option pool authorized if you plan to grant options; and one cap table that is the single source of truth and reconciles to the signed documents.

SAFEs & prior financing

Every SAFE or convertible note logged with its cap, discount, and date; side letters tracked; pro-forma post-money cap table showing how the SAFEs convert and dilute at your target round; and no undocumented promises of equity to anyone.

IP & people

Present-tense IP assignment from every founder, employee, contractor, and advisor; confidentiality and invention-assignment agreements signed; trademarks identified; open-source usage inventoried for license compatibility; and offer letters and contractor agreements on file.

Want this turned into a fixed-scope engagement? The document-heavy build (forming or cleaning up the C-Corp, founder and contractor IP, cap-table and SAFE hygiene, and a data-room index) is the kind of work I scope as a flat-fee Startup Legal Readiness Sprint at $3,900 (about 16 hours at $240 per hour); a heavier, document-heavy variant runs 16 to 20 hours, roughly $3,840 to $4,800, and ongoing or follow-on work is $240 per hour. A single document or question is the $240 Written Attorney Consultation.