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"Sweat equity" designates a stake in a company acquired by an employee, a contractor, or an advisor in lieu of cash. So when you hear about "ESOP" or "advisory shares", they are all a type of sweat equity.

In the tech startup sphere, advisory shares are a double-edged sword. Let's venture into the realm of startup advisory shares, addressing the whys, whos, and how muchs.

The Simple Agreement for Future Equity (SAFE) is a popular financial instrument for startups who want to raise funds. This post will teach you the specifics of a SAFE, which is more complex that the name suggests.

I'm a securities attorney in New York. In other words, I do the legal stuff so my clients - startups - can raise funds safely and efficiently. On this Memorial Day weekend of 2023, what was I doing, you ask? I was busy preparing a “risk factor,” addressing the rapidly evolving world of AI-powered technology!

Equity Crowdfunding (also known as “Reg CF”) authorizes US companies to reach out to both accredited and non-accredited investors and raise up to $5 million in any rolling 12-month period.

Rule 506(c) allows companies to raise an unlimited amount of money from accredited investors; unlike under Rule 506(b), the securities offered by a company relying on Rule 506(c) may not be sold to any investor that is not accredited.

Rule 506(b) is a popular exemption from registration, as it allows startups to raise an unlimited amount of money from accredited investors and up to 35 non-accredited investors.

Section 4(a)(2) allows a company to raise funds from its founding team. This post breaks down the legal aspects of this SEC exemption for startup founders.