Start ‘n Knupp

Data Breaches: An Employer’s Duty to Protect Employees’ Personal Information

By Aaron Wais

It is tax season, which means that criminals are busy trying to steal people’s tax information (e.g., names, addresses, social security numbers, income information), which they can use to file fraudulent tax returns and steal tax refunds.

As an employer, you likely maintain your employees’ tax information and, thus, are a target.  Indeed, criminals regularly target employers and hack their databases or pose as company executives and send a phishing email asking for all employees’ W-2s for accounting purposes.

As such, it is important to understand your duty to protect your employees’ personal information, as well as potential liability for failing to do so.  Most states, including California, make clear that employers have a legal duty to protect their employees’ personal information.  These courts also make clear that whether an employer has legally compliant, written policies for protecting private information and responding to data breaches will heavily inform whether and the extent of an employer’s liability for a data breach.

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Moving Startups Forward: Tips for Responding To A Patent Troll

By Alesha Dominique

Startups are increasingly vulnerable to demand letters and lawsuits from “patent trolls” looking for opportunities to extract quick settlements from small companies with limited resources to defend against claims of patent infringement.  To protect your business, developing a thoughtful approach for responding to such non-practicing entities is essential.  Here are 5 tips for moving forward:

1. Don’t Panic. When confronted with a patent demand letter or infringement lawsuit from a non-practicing entity, it is perfectly understandable to be upset.  You have likely invested substantial sums of money into your business and/or product, and now feel that the investment is under attack.  Maintaining your calm, however, will better enable you to think clearly and strategically about next steps.
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Visa Options for Foreign Investors and Entrepreneurs

Many Currency

Photo credit: iStock.com/Wara1982

By John E. Exner IV

Many U.S. startups are co-founded by foreign nationals, and for those that are not, all start-ups need capital. Fortunately, it is not necessary to limit the potential investor pool exclusively to U.S. citizens and permanent residents. A large number of U.S. startups are either co-founded or funded by foreign investors, and the U.S. government understands that in order to attract foreign investment into the U.S. economy there must be designated visa categories available to those investors. These specific visa categories were established to allow investors and co-founders to travel to the U.S. to manage and oversee their investment. While a wide variety of visas may be applicable to any situation, the two most common visa categories utilized by foreign investors and entrepreneurs are the E-2 and the L-1A “new office” visa. (more…)

Designing Successful Intellectual Property Protection

By Brionna Ned

When you start to think about protecting your business’s intellectual property, some things might immediately jump to mind – like trademarking your logo or filing a patent application for the functional invention that underlies your business. But other things, like the design or appearance of your product, may not be so obvious. In fact, it may not have occurred to you that you can and should consider seeking protection for the appearance or ornamental characteristics of your company’s product – whether that product is an actual article of manufacture, like the Apple iPhone, or the user interface of your mobile application. Intellectual property law offers protection for both via copyright and patent law.

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Immigration Tips for Startups

By John E. Exner IV

10 tips to prepare for the most frequent immigration scenarios faced by startups:

World map created with passport stamps, travel concept

Photo credit: iStock.com/Delpixart

  1. If the company will be owned, in-whole or in-part by a foreign investor, immigration planning should start as early as possible – even before the company is established. There are visas available to foreign entrepreneurs who are investing a significant amount of money into a new U.S. business. This visa application process should be handled in concert with the creation of the business.
  2. If the U.S. business will have a foreign office (parent, subsidiary, or affiliate) the managers, executives, and essential personnel from the foreign office(s) may be able to travel to the United States on multinational transferee visas.
  3. If the U.S. business is recruiting from local U.S. universities and colleges, many of these candidates may be foreign nationals on U.S. student visas. These individuals may be eligible for at least one year of employment authorization in the U.S. following graduation. (more…)

Corporate & Business Transactions Tips for Startups

By Bryan Wasser

 

When venture capital (“VC”) firms or private equity (“PE”) firms invest in start-up companies their goal is to work with management to strengthen operations, accelerate growth, enhance profitability and position each portfolio company to become a market leader.  One of the most important advantages of a company being owned (or minority or majority-controlled) by such a VC or PE firm (referred to as a “portfolio company”) is the strength and focus of the directors of the portfolio company that are appointed by the VC or PE firm. However, senior management must stay focused as the day-to-day decisions will rest solely with them. To help senior management, we have put together the following set of principles that start-up companies can utilize to forge the strongest possible partnership between their management and the VC and PE firms that they partner with.

1. FREQUENT AND DETAILED COMMUNICATIONS ARE ESSENTIAL.
The most effective CEOs and CFOs are sophisticated communicators. They understand their role in managing the flow of information between the VC or PE firm and the other members of the management team. and can quickly communicate developments in the business to the VC or PE firm’s representatives. Investors expect their CEOs and CFOs to be straightforward and open about the challenges the portfolio company faces. what management is doing about those challenges and the likelihood of successful outcomes. (more…)

Labor and Employment Tips for Startups

By Samantha E. Becker

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Photo credit: iStock.com/LeoWolfert

Here are 10 employment tips to prevent your start-up from losing ground before it gets started:

  1. Make sure you understand the differences between employees and independent contractors and follow all legal requirements when it comes to wages, benefits and terms of employment. Distinguishing employees from independent contractors is complex and fact-specific (the IRS uses a 20-factor test!) and errors can result in costly litigation down the road.
  2. Don’t classify employees as salaried to avoid paying for overtime and/or other benefits. Most employees in a company should be paid on an hourly basis and even salaried employees can later try to sue for unpaid wages and overtime, penalties, and attorneys’ fees.
  3. You cannot pay equity to avoid paying minimum wages. Make sure you pay employees for their regular and overtime hours worked based on the rates set forth by state and federal laws. (more…)

Intellectual Property Tips

By Emily F. Evitt

Here are 10 ways to build a rock-solid foundation for your new company and avoid constructing a masterpiece on top of quicksand:

  1. Make sure your company’s name isn’t already taken. As a starting point, search the name on Google and other Internet search engines. Then search the U.S. Patent and Trademark Office website (uspto.gov). Important: repeat this process each time you pick the name of a new product or service.
  2. Check if the domain name you want is available – if so, get it. Create Twitter, Facebook and Instagram accounts for your company, and start using them. (more…)