Audience
The word startup means different things to different people. For the purposes of this handbook, we use the term to refer to:
- companies that are designed to grow fast or
- companies that might raise (or that have raised) money from an accelerator or venture capital firm (commonly referred to as VCs).
Many startups will fall into both of these categories. Some companies may not fall under either category, but still want to model themselves (from a legal perspective) after startups in order to leverage the legal ecosystem around startups. This handbook should be useful for such companies as well.
This handbook is written for startup founders, with a focus on topics relevant to early-stage startups. The term early-stage startup also means different things to different people. For some, it might mean a company that has raised a Series A or even a Series B. For the purposes of this handbook, we use the term early-stage startup to refer to startups that have not yet raised a Series A financing. This means startups anywhere from pre-formation to having raised a seed financing.
Finally, the content in this handbook is only relevant for Delaware C corporations, as startups (as the term is used here) are typically Delaware C corporations.1
We've got a few notes for you as well!
- 1.
Without a doubt, there are startups that are not Delaware C corporations. It's definitely not our intent to be discriminatory. Unfortunately, the legal issues can vary quite a bit depending on the state (or country) and entity type (e.g. LLCs, S corporations, partnerships). In addition, practices are much less standardized outside of the world of Delaware C corporations. Thus, writing a handbook that covers all entity types across all 50 states (not to mention other countries) would cause this handbook to balloon in size (probably more than 100x) and correspondingly require a great deal more effort. Accordingly, we have made the decision to focus on the type of entity that is most commonly used by startups — the Delaware C corporation.
