What is the difference between a SAFE and a convertible note?

A SAFE (Simple Agreement for Future Equity) gives an investor the right to obtain equity in a future financing round, while a convertible note is a short-term loan that converts into equity later. SAFEs do not accrue interest and have no maturity date, making them simpler and more founder-friendly. Convertible notes accrue interest and have a maturity date by which they must convert or be repaid, offering investors more protection if a funding round never occurs.

Why do startups choose to incorporate as a Delaware C-Corporation?

Startups often incorporate as Delaware C-Corporations because Delaware's corporate laws are business-friendly and well-established. Investors prefer this structure for its predictability and ease of raising capital. A company can incorporate in Delaware even if it operates in another state (for example, Massachusetts), but it must also register as a foreign corporation in its home state to comply with local laws.

How do founders split equity in a startup?

Founder equity is the ownership stake allocated among a startup's founding team. Founders usually split equity based on each member's contributions and often set up a vesting schedule (for instance, vesting over 4 years with a one-year cliff). Vesting ensures that if a founder leaves early, any unvested shares return to the company, protecting the startup and the remaining founders.

Massachusetts Startup Attorneys | Graydon Sommer PLLC

Startup Law

We serve intrepid founders building iconic high-tech companies that benefit humanity and the planet, providing comprehensive legal guidance from inception to IPO and beyond.

$53B

Funding attracted by climate tech startups in 2021, signaling investor interest in environmental solutions.

$162B

Capital raised by venture funds in 2022, with 769 funds closed.

$774B

Total value of startup exits in the U.S. in 2021.

90%

Approximately 90% of startups fail within the first three years.

We serve startups contributing to cutting-edge advancements in areas like AI, Biotech, Clean Energy, and Space.

We help visionary founders turn bold ideas into transformative realities. Our startup law practice supports pioneers in high-tech fields including renewable energy, biotechnology, space, quantum computing, and robotics. Our team empowers those creating solutions for the climate crisis, to help their work thrive and accelerate the transition to a sustainable future.

We guide and support innovative startups with breakthrough technologies that aim to revolutionize industries, uplift communities, and create a sustainable path for humanity and the planet.

Overview

We see helping groundbreaking startups as a legal imperative. Our firm addresses complex regulatory challenges and provides comprehensive legal guidance at every stage, from formation and funding to public listings or exit.

Health sector startups have the potential to significantly improve human health, with the global digital health market alone projected to reach $657.4 billion by 2025.

Health Care

Startups possess an unprecedented opportunity to revolutionize health care. From telemedicine to personalized treatments, they are redefining patient care. Our role is to support these innovators by navigating regulatory landscapes, securing intellectual property, and fostering partnerships that propel healthcare advancements to new heights.

By integrating our comprehensive legal backgrounds with a personalized approach, we help startups not only survive but thrive in today’s competitive market. Whether it’s securing initial funding or navigating complex legal challenges, our firm is a partner every step of the way.

The global space economy is projected to reach $1.8 trillion by 2035, driven by advancements in space-enabled technologies that will fuel growth across industries and address critical challenges like climate monitoring and disaster management.

Space Technology

We empower space innovators by navigating complex regulations, securing intellectual property, and attracting critical investments, enabling transformative technologies that enhance human prosperity. From 3D printing organs in space to expanding global broadband, advancing telehealth, and deploying climate mitigation technologies – including the potential development of space-based data centers —we promote space solutions that revolutionize healthcare, connectivity, and environmental sustainability. We help safeguard these innovations, fostering a future where space technology elevates life on Earth and protects our planet for generations.

Agricultural technology can significantly reduce resource consumption, minimize environmental impact, improve crop yields, and enhance food security.

Lawyers' Role

We provide comprehensive legal services tailored to the unique needs of startups, including:

Startup Formation: We guide startups through their formation and structuring, ensuring a solid foundation for future growth. This includes legal support for initial funding rounds and setting up robust shareholder and equity arrangements.
Fundraising & Venture Capital: Skilled in guiding startups through the entire fundraising process, from proper legal structure and due diligence to protecting intellectual property—all pivotal for securing VC funding.
Legal & Regulatory Guidance: Assistance in navigating the legalities of startup operations, including term sheet negotiations, regulatory compliance, and drafting essential contracts and agreements.
Investment & Exit Strategy: Strategic advice on both the initial investment stages and potential exit strategies to align with founders' goals and venture capitalists' expectations.

How We Can Help

Formation and Structuring

Provide guidance on corporate structuring, shareholder agreements, and funding arrangements, laying a strong legal foundation tailored to your startup’s objectives.

Fundraising and Venture Capital Guidance

Support startups navigating venture capital fundraising, including term sheet negotiations, due diligence, and compliance, while protecting intellectual property.

SPAC-Related Ventures

Advise startups pursuing Special Purpose Acquisition Companies (SPACs) as a path to funding and public listing, aligning strategies with legal and regulatory requirements.

Intellectual Property Protection

Assist startups in safeguarding innovative technologies and ideas through patents, trademarks, copyrights, and trade secrets to maintain competitive advantages.

Regulatory Compliance Across Sectors

Guide startups in regulated industries like healthcare, clean energy, and AI to comply with applicable state, federal, and international laws, including FDA, SEC, and GDPR standards.

Health Tech and Digital Innovation

Help health tech startups navigate HIPAA regulations, FDA compliance, and funding strategies, fostering partnerships and supporting patient-focused innovations.

Green Energy and Sustainability Startups

Provide legal guidance to renewable energy startups, addressing compliance with environmental laws, intellectual property protection, and opportunities for clean energy development.

Space Technology Ventures

Assist space tech startups in navigating U.S. and international space laws, including the Outer Space Treaty and ITU regulations, while supporting efforts to attract investments and foster growth.

Quantum Computing Startups

Support quantum tech ventures with compliance, export control regulations, and intellectual property protection, helping them secure funding and operate in emerging markets.

ESG and Sustainability Reporting

Advise startups on integrating Environmental, Social, and Governance (ESG) principles into operations, supporting alignment with SEC disclosure requirements and investor expectations.

Food Tech and Agricultural Innovation

Guide food tech startups on regulatory compliance for novel food products, securing intellectual property, and navigating market entry strategies to transform food systems.

Exit Strategies and Mergers

Provide legal support for exit strategies, including IPOs, acquisitions, or mergers, aligning legal frameworks with business objectives and investor priorities.

Comprehensive Litigation Support

Represent startups in resolving disputes related to intellectual property, contracts, or other legal conflicts, enabling them to focus on growth while protecting their interests.

B-Corp Governance Guidance

Advise mission-driven startups on adopting Benefit Corporation status and strong ESG policies, embedding sustainability and accountability to attract impact investors and reduce future legal risks.

AI Governance

Develop AI governance programs for AI-focused startups, integrating compliance with emerging regulations into their business model, so innovation proceeds responsibly and avoids future legal pitfalls.

Down-Round and Restructuring

Steer startups through economic downturns or pivot crises by restructuring cap tables, negotiating down-round financings, and managing layoffs, helping founders weather challenges and emerge resilient.

Global Expansion & Cross-Border Growth

Advise scaling startups on international expansion, helping establish foreign subsidiaries, comply with EU and Asia-Pacific data privacy rules, and protect IP abroad.

FinTech & Digital Assets Compliance

Advise fintech, blockchain, and digital asset startups on navigating complex financial regulations. We help structure compliant token offerings, obtain necessary licenses, and implement KYC/AML controls so innovative financial products can launch responsibly.

Venture Debt & Alternative Financing

Provide counsel on securing non-dilutive funding sources beyond traditional equity. This includes guidance on venture debt facilities, convertible notes, SAFE agreements, and other structured financing solutions that empower startups to fuel growth while minimizing ownership dilution.

Strategic Partnerships & Joint Ventures

Support startups in structuring strategic alliances and joint ventures with industry partners. We draft and negotiate collaboration agreements that foster innovation and market access while protecting the startup’s interests, intellectual property, and long-term value.

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