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Trademarks vs. Copyrights vs. Patents: A Startup Guide to IP Protection
Startups thrive on ideas - but ideas only create value if they’re protected. Intellectual property (IP) safeguards your brand, your creative work, and your innovations. From your logo to your code to your inventions, knowing which type of IP applies is essential to protecting your edge and building long-term value.
Non-Solicitation Clauses Explained
When an employee leaves your startup, there’s always a risk they’ll try to take your people or customers with them. That’s where non-solicitation clauses come in - they’re a powerful, often enforceable tool to protect your business after key team members depart.
Should Startups Use Non-Compete Clauses? Here’s What Founders Need to Know
In the fast-moving startup world, it’s natural to want protection against former employees joining a competitor. That’s why non-compete clauses have been popular for years. But the legal landscape is changing - raising real questions about whether they’re enforceable, useful, or even worth including.
FAQs
Open allWhy is vesting important for founders?
Vesting ensures equity is earned over time, protecting the company if a founder leaves early and keeping incentives aligned with long-term success.
Should founder equity always be split equally?
Not necessarily. Equal splits can help maintain alignment, but contribution-based allocations may be appropriate if founders bring significantly different resources or commitments.
How large should the employee equity pool be?
Most early-stage startups reserve 10%–20% for employee incentives, with flexibility depending on hiring plans and growth stage.
Why shouldn’t equity be expressed as a percentage?
Percentages can shift as new shares are issued. Defining equity in terms of actual share counts provides more accuracy and avoids misunderstandings.
Do all employees in a startup receive equity?
Not always. Equity is more common in early-stage startups and higher-level roles, though many growing companies expand equity participation to create a stronger ownership culture.
How do employees know what their equity is worth?
Equity value depends on company valuation, which changes with funding rounds, revenue growth, and market conditions. Clear communication from leadership helps employees understand potential value.
Why do startups use vesting schedules?
Vesting ensures employees earn equity over time, rewarding commitment and protecting the company if someone leaves early.
What is the most common type of equity compensation for startups?
Stock options remain the most common, but RSAs and RSUs are increasingly popular depending on company stage and employee needs.
What are the risks of converting my business entity?
Risks include tax consequences, restructuring ownership rights, and compliance burdens. Without proper planning, these can create legal or financial complications.