Tag Archives | Start-up

Photo of an open plan office space

Source: Pexels

By: Linda Cole and Joshua Fox

Successful management of any new enterprise, regardless of industry, is a process demanding of concerted effort to realize opportunity with a finite set of resources. As an entrepreneur, perfecting your vision, securing and managing funds, building a team, marketing and selling, and executing on plan, all while navigating unexpected obstacles, likely occupy your every day. At the core of whether you can succeed is whether your principal team has not only the requisite ability and experience, but the support in place to sustain it. This support, typically, derives from academic advisors, industry experts, professional consultants, and, eventually, from investors.

From whom you choose to seek advice, including from which startup lawyer, will significantly impact your progress. To assume that any corporate lawyer—and there are many able ones out there—can meet the demands of your business need not be one of your early fails. The right lawyer for your startup will not purely be a legal advisor but a strategic one—that is, an integrated teammate who is uniquely prepared to support your mission.

What makes a particular lawyer worthy of this role? A set of professional skills and personal attributes that combine with your own in just the right balance to drive success. Whether this lawyer is with an outside law firm or in house as part of your core team, our collective experience across both roles reveals a strikingly similar skillset. What, precisely, do these skills look like? You may be surprised to learn that the most predictable is, in fact, not necessarily the most impactful.

1. Risk Management

If your first contact with a lawyer is prompted by risks associated with your business, such as how to document equity owned by the founders, protect intellectual property, or engage human resources, then you are not alone. It is this expectation of risk management that creates what is, in theory, where the value of the lawyer’s contribution to your startup lies. It is, of course, imperative that your lawyer be prepared to identify, analyze and recommend steps to eliminate or, at the very least, mitigate risk.

If your startup is highly data driven, for example, your lawyer must not only understand the applicable legal and regulatory framework around the collection, storage, use, and/or sale of the particular type and form of data but, likewise, the related risks and remedies, if any, that may be employed to avoid them. There are multiple means of managing risk, such as through informed decision making, contract drafting and liability insurance, but before risks can be addressed, they must first be identified.

You absolutely need to be able to look to your lawyer for input into cost-benefit analyses relative to legal risks to your business. Ideally, you will want to choose a lawyer who has experience with companies similar to your own, either in terms of industry or issues, including having worked on the types of transactions you expect to engage in. Contrary to popular belief, however, understanding and analyzing legal risk is not the only, nor is it even the most beneficial, skill that the right lawyer will bring to your startup. It is, more specifically, the lawyer who is able to adroitly shift between advisor on risk to participant in solutions from whom you will derive the greatest value. This agility is as much a mindset as it is an expertise.

2. Partnership

Your choice lawyer may be an individual attorney or a law firm, but, in either case, you should expect and receive consistent proof that your legal counsel is an engaged member of your team. Whether a lawyer (or firm) inwardly identifies as “your business partner” will noticeably manifest, in both character and actions.

Your lawyer should be ready, for example, to support the business through creative and flexible billing practices, including offering alternative fee arrangements, such as a discounted hourly rate or fixed fee per project; estimating legal fees before commencing work; or deferring collection until your startup has realized a certain amount of revenue or capital. Willingness to experiment with such measures demonstrates that a lawyer is “on your side” by supporting your financial goals, despite the risk, and taking a long-term view of the relationship—in effect, making an “investment” in you and displaying confidence in your business’s likelihood of success.

The lawyer who thinks like a partner will consistently demonstrate that he or she cares and can be depended upon. You should feel valued after interactions with your lawyer, regardless of his or her workload, and confident that you and your business will take priority at the appropriate times. Your lawyer should be reliable and responsive, promptly returning phone calls and emails; mindful of your timeline; and able to deliver work product on time and within budget. You should never be left to worry that more mature businesses, which are larger paying clients, will monopolize the attention of your lawyer.

Perhaps the most meaningful attribute and indicator that a lawyer is prepared to be an effective teammate is a genuine interest, not simply in the business but in you as a person. The right lawyer will take the time to get to know you—your personality, your leadership style, your expectations, your work routines, and even your communication preferences—and proceed to accommodate them. In cases where you expect help analyzing risk but prefer to make the final decision yourself, your lawyer should facilitate that, by guiding you through pertinent pros and cons; but, in cases where you, instead, prefer a definitive opinion, your lawyer should provide one.

Say, for example, that you are a first-time entrepreneur negotiating a term sheet for an initial round of financing, and, with negotiations faltering, you ask your lawyer whether he or she would sign the term sheet “as is.” If your lawyer understands you to have a need for clear and concise guidance around integral business decisions, your lawyer must be able to provide you with a “Yes” or “No” answer, and not an exhaustive recitation of terms. You will likely desire some balance between analysis and opinion from your lawyer, and where he or she is adeptly able to gauge which one you prefer and when, you have forged a strong partnership.

3. Collaborative Communication

Being a good communicator is essential to being a good lawyer, partner and problem solver, especially when navigating the bumpy terrain of a startup. Your lawyer should, therefore, routinely be asking incisive questions about the particular business issue, goal, or transaction at hand. How else will he or she be able to clearly comprehend what you are looking for, what you care about most, and, alternatively, what you may not think is important? It is only through asking questions that your lawyer can construct and tailor recommendations that are both sound and relevant. After all, your business is not a hypothetical, and legal advice should never be delivered to you in a vacuum.

While posing the right questions is a necessary first step toward effective communication, your lawyer should not stop there. It is equally imperative that he or she pay careful attention to your answers. Only through active listening will your lawyer be able to understand the broader context within which your specific need has arisen. If, for example, you ask your lawyer to review and interpret a contract, the advice that you receive will be most useful to you when generated from a clear understanding, not only of the proposed transaction, but, more specifically, of your objectives and leverage relative to those of the counterparty to the contract.

Returning to our example above, if you are a first-time entrepreneur engaged in collapsing negotiations for seed financing and looking to your lawyer for guidance on whether to sign the term sheet “as is,” only if your lawyer has been carefully inquisitive might he or she know, for example, if you have spent months chasing financing, have received only this one offer, and are increasingly concerned over the resulting delay in technology development. Advice appropriately shaped by these facts would include a shift in focus toward negotiating a smaller subset of your most important issues (perhaps even just one or two) in order to make sure that a deal gets done as quickly as possible.

4. Practical Advice

Although many of the questions that you will pose to your startup lawyer will have complicated answers and, thus, require detailed analyses, you, typically, will need a succinct response. While a lawyer can spend a lot of time over email or on the phone with you summarizing relevant issues and describing the review conducted to reach his or her conclusion, this propensity is contrary to the startup reality. Time is money, and you are, no doubt, both busy and cost conscious. It stands to reason, then, that the more compatible lawyer is the one who is able to “cut to the chase.” While your lawyer should be able to work back to the analysis supporting his or her conclusion, in the course of discussing your questions, practicality dictates that the lawyer should lead with that conclusion, offering a recommendation at the outset.

As an entrepreneur, most likely with a business or technical background (rather than a legal one), you should expect your lawyer to be the one to bridge the gap and have the ability to speak your language. Your lawyer should avoid the use of legalese, so that you find the advice easily understandable and relatable. In fact, an essential component of your startup lawyer’s role is not providing legal advice—that is to say, to offer counsel on related, but non-legal, matters. For example, you may ask the lawyer representing your startup in a venture capital financing to advise you regarding how frequently particular deal terms, like participating preferred stock, are seen. Knowing how prevalent deal terms are is not “legal” advice, per se, but explaining which terms are “market” and which are atypical is a key value-add. This relevant expertise will enable your lawyer to help you to prioritize and determine which terms to negotiate and which to accept.

The ability to provide practical business advice is part of a larger skillset that will distinguish your best startup lawyer from the rest. Most lawyers will be able to educate you on how to interpret a provision in a contract or analyze risk in a transaction, but the lawyer that you want to find exercises sound judgment in the provision of real-world advice. Your world is the startup world, and, as such, your lawyer must be able to expertly determine what is important to you (and what is not), given the stage that you are at. This determination is impacted by the particular circumstances and context, such as when and how urgently you may need outside financing, and the circumstances and context need to figure into the advice that you receive.

If, for example, your startup is running low on cash—with payroll, accounts payable, and other obligations due—but has received a proposal from a prospective licensee of your technology in a specific territory outside of the United States, you may need to accept terms that are less than favorable, and it is the role of the skilled startup lawyer to help you determine what your business can live with. Your lawyer should know not to “over-lawyer,” such as by drafting and negotiating the definitive agreements in a way that adds unnecessary time, complexity, and expense to the deal or, even worse, in a way that puts the deal at risk: By continuing to negotiate a matter for which there could be a compromise or by delaying the closing date through prolonged negotiations, the deal could fall through.

5. Understanding the Business

As an entrepreneur, your business is born of an idea that you believe is unique. It could be an advanced technology, an innovative service, or a progressive social mission. Whatever it is that sets your business apart needs to be substantively understood, in both design and practice, by your lawyer.

If, for example, your startup is a software-as-a-service play, your lawyer must be familiar with the software, its functionality, feasible customizations, and what steps the business is willing to take in terms of customer care, warranty, and support. Otherwise, your lawyer will not be able to negotiate successfully with tech-savvy customers, discuss the finer points of service level agreements, and explain what credits, if any, will be offered in the event of unexpected downtime. If this dexterity is not the case with your lawyer, in order to support your sales team, then you may as well be selling off-the-shelf software, because, before the contract is even signed, the prospective customer may determine that the service piece is missing.

Equally as important for your startup lawyer to grasp is the financial model and underlying accounting principles on which your business runs. Whether you are selling a product or a service, there will be a process by which revenue flows through your business. With working knowledge of this process, your lawyer can draft and negotiate license and services agreements that, to the extent possible, support the conversion of bookings into recognized revenue sooner rather than later. Be sure that the lawyer you select does not plan to simply “do deals” for your startup but that he or she plans to help you craft deals that are structured in such a way as to support your business goals.

While finding “a” startup lawyer may seem a straightforward enough task, finding “your” startup lawyer—the practitioner whose partnership, communication, and practicality will advance your business purpose—requires that you know who and what you are looking for. The right fit from the outset often proves determinative and, therefore, you will want to evaluate carefully skills that many entrepreneurs, especially those searching for a lawyer for the first time, might not intuitively focus on.

Linda Cole is a Clinical Instructor at Harvard Law School and Supervising Attorney for the Harvard Law Entrepreneurship Project. Joshua Fox is a Partner at WilmerHale in Boston and an Adjunct Lecturer at Boston University School of Law. Both are alumni of Harvard Law School.

Taking people ‘to where they want to be’

[Published in the Harvard Gazette, Jan. 22, 2016, and in Harvard Law Today, Jan. 27th 2016]

Law School students help struggling small-time entrepreneurs flourish

By LIZ MINEO/HARVARD STAFF WRITER

Amanda Kool, (red jacket) clinical instructor at Harvard Law School teaches a clinic to teach students how to provide legal services to people who want to start their own small businesses inside 6 Everett Street in the Wasserstein Hall in the Harvard Law School at Harvard University. She is seen with here HLS students, Matthew Diaz, (from far left) Carolyn Ruiz, and Steven Salcedo. Kris Snibbe/Harvard Staff Photographer

Hailing from Buffalo, a once-prosperous city in upstate New York, Steven Salcedo knew how a lack of continued economic development can hinder families and mire people in poverty and hopelessness.

But it was only after he took a course at Harvard Law School that Salcedo realized that lawyers could help foster better times for communities.

“Lawyers can’t make economic development happen by themselves,” said Salcedo. “But we can contribute to help solve poverty by enabling people to do what they want to do. We’re like a bridge; we take them from where they are to where they want to be.”

The class Salcedo took, “Community Enterprise Project of the Transactional Law Clinics,” allows HLS students to help small business owners, entrepreneurs, and community groups create businesses, obtain permits and licenses, and negotiate contracts and other transactional (non-litigation) services.

Other transactional law clinics offered at HLS deal with business and nonprofits, entertainment law, and real estate.

Amanda Kool, an HLS lecturer on law and clinical instructor, directs the Community Enterprise Project. Under her supervision, students work out of HLS’s Legal Services Center in Jamaica Plain, dividing their time between assisting clients and partnering with community organizations on projects that address broader legal barriers to economic development in the community.

The course benefits both students who are interested in pursuing social-justice work and community members who need their services, said Kool. Since 2013, students have produced legal toolkits compiling laws and regulations that govern worker cooperatives, condominium associations, and food trucks, and staged legal workshops for military veterans who are starting small businesses and for entrepreneurs in the creative economy. Last October, they published a first-of-its-kind legal guidebook for immigrant entrepreneurs.

“A lot of the social ills that result in crimes tied to poverty could be cured through economic development,” said Kool. “Our work has a strong public purpose.”

By helping people who want to start small enterprises but lack the moneys to hire an attorney, students promote business development and job growth, said Kool. For many students, the fact that lawyers can help people overcome barriers to economic development comes as a something of a surprise.

That was the case for Matt Diaz, who registered in the course with a desire to do transactional law but without knowing what to expect. He worked with clients who wanted to start a landscape worker cooperative and as a result, helped write a worker coop guide and the guidebook for immigrant entrepreneurs.

“I’m a nerd for tackling new and unresolved legal issues,” said Diaz. “The course was like a rabbit hole for legal research. I had tons of fun.”

For Carolyn Ruiz, the course offered an opportunity to plunge into a neighborhood far from campus and interact with community organizations.

“In law school, everything is hypothetical,” she said. “This gave me the chance to work with real people in the real world.”

The course also helped her practice her Spanish skills with Salvador Esteban, a client who comes from Mexico.

“We wouldn’t have been able to help him” otherwise, said Ruiz, a Texan of Mexican descent. “He only spoke Spanish.”

A father of two, Esteban, 45, runs a hot-dog cart near the Boston Common, and needed help with licensing and permitting.

“I didn’t know how to pay taxes or how to apply for permits with City Hall or the health department,” he said.

Students relish the opportunity to be immersed in a workaday community. Because their clients work during the week, students sometimes spend weekends and evenings meeting with them at their homes or businesses near Jamaica Plain.

Salcedo took the course three times because he found his calling. It changed more than his career path, he said.

“It did change the course of my life,” he said. “I entered law school because I wanted to help underrepresented people. I was unsure of how I wanted to do so, though. I learned that law can empower low-income entrepreneurs who are working to revitalize their neighborhoods and provide for their families.”

Salcedo was awarded a prestigious Skadden Foundation Fellowship to create a program like the Community Enterprise Project to help small entrepreneurs in his hometown. After graduation, he plans to go back to Buffalo to work at the Western New York Law Center, a nonprofit that provides legal services in civil matters to low-income residents.

“I can’t imagine a more fulfilling way to use my legal education,” he said.

Startups: How I Channel My Entrepreneurial Interests at HLS

[Published Oct. 29th, 2015 on the Office of Clinical and Pro Bono Programs Blog]

By Eli A. Shalam J.D. ’16

By the time my first semester at HLS began, I was chomping at the bit to work with the Harvard Law Entrepreneurship Project (aka “HLEP”—pronounced aitch-lep). By early October, I was placed on a team with three other law students researching the impact of independent contractor and employee classifications on a company’s business model. Our client was a company that facilitated the booking of housekeepers to clean customers’ homes*. The main issue was that the company wanted strict standards to ensure the quality and consistency of the customer experience, but did not want to risk any sort of liability if, for example, a housekeeper started a major fire in a customer’s home, a customer’s pet severely injured a housekeeper, or a housekeeper accidentally spilled cleaning supplies on priceless curios. Our job was to advise the company on whether, and how, to classify the housekeepers as employees or independent contractors.

The project began to get very real for me when one of the attorneys assigned to our team suddenly perked up during the client intake meeting and realized that her husband had just used the client’s service to hire a housekeeper during the prior week! This company was already operating in the Boston area and my team and I were in a position to directly influence their business!

That January, I applied for a seat on the Executive Board and became the organization’s Vice President of Operations—managing the team assignment and administration process, from collecting client, attorney, and law student applications, to assigning everyone to a team within their top few preferences, and ensuring that projects were completed without a hitch and to the clients’ satisfaction. One year later, I became President of HLEP during a period of huge growth. In my first semester with the organization, we had 54 students working with 12 attorneys on 14 client-projects. This past semester we had 133 students working with 39 attorneys on 30 client-projects. And every semester, as I review the wide array of client applications that we receive —an entrepreneur wildly passionate about selling his favorite beverage, two separate companies trying to build power generation plants, an alternative ice-cream store, numerous pharmaceutical companies, and investment funds — I remember the project that got me started in HELP, where I was able to work with two great entrepreneurs to revolutionize home cleaning services and the 90 other companies that we have helped since then.

*The nature of the client’s business has been altered to protect the client’s privacy.

Transactional Law Clinics: Building Community Dialogue with the Help of Big Data

[Posted on April 9, 2015 on the Office of Clinical and Pro Bono Programs blog]

By Petra Plasilova J.D. ’16

Do you get annoyed by websites that require you to register and create a full user profile, including personally identifiable information, even to complete a minor purchase? Does it unsettle you that moments after you search for that perfect vacation spot on Google, your Facebook feed fills with ads offering you discounted plane tickets to get there? As the use of big data collection and analysis increased in both the private and public sectors, so did public debate on the ethics and even legality of the practice.

Following numerous recent hacks and leaks of customer data at large retailers and banks, the public has become understandably skeptical of the data collector’s ability to appropriately protect sensitive data and consumer’s privacy. Amid the flurry of negative press and research reports, few have focused on the potential benefits and opportunities big data offers. For example, researchers’ ability to store and process large amounts of data have made it possible for NASA to monitor climate change more accurately,[1] and the need to store large amounts of data has helped drive infrastructure development and the move to cloud computing.[2] I used to be very skeptical of statements proclaiming the benefits of big data. Until I met a person who showed me that big data truly has potential to drive positive change within our own immediate community.

Agora Team

I met Elsa Sze one morning in mid-September. A motivated graduate of the Harvard Business School and Harvard Kennedy School, she filled the room with energy as she passionately described the mission of her organization, Agora Townhall, Inc. (Agora). Through her coursework and prior experience in the Obama re-election campaign, Elsa identified a key problem – disenfranchisement of constituents – and decided to fix it.

An experienced consultant, Elsa knew the answer lay in accurately diagnosing the problem. She quickly realized the reason why many people did not engage in community dialogue on important issues was not because of lack of engagement or interest. People were simply too busy to attend town halls or rallies. For many, social media have become the primary way of voicing their opinions. Yet, the government and politicians have failed to accordingly adapt and create online fora in which important civic dialogue could take place. Luckily, Elsa saw the gap and stepped in to fill it.

Agora provides an easily-accessible online platform for individuals to publicly raise and discuss issues important to them and their community. In addition to discussion boards, the Agora website and app also offer a town hall functionality, which enables government officials and politicians to host online debates and discussions on various topics. Agora users have the ability to join these town halls and share their opinions, or simply “listen in” by reading the town hall host’s contributions and other users’ comments. The feature has attracted officials from as near as Somerville and as far as Libya to Agora, and has helped drive dialogue on topics as diverse as local construction and constitutional reform. So what does this all have to do with big data?

To empower as many members of the local and global community as feasible, Elsa developed a business plan that capitalizes on Agora’s ability to collect and analyze meaningful data about the site and app’s users. With the users’ permission, Agora captures data on its users’ demographics, views, and areas of interest. Elsa’s team of analysts produces reports and statistics for select clients, mostly politicians, which enables them to better understand their constituents. As a result, politicians can make more inclusive decisions that reflect the needs of the aggregate community, rather than those of a few powerful constituents. Agora’s data analytics function thus gives individuals a unified credible voice when it comes to important matters impacting their community, as the algorithm turns isolated one-off chatter into actionable insights.

While Agora needs to turn a profit, like any other business, Elsa is committed to respecting the users’ privacy. She has carefully crafted Agora’s data analytics approach to be in line with her ethical beliefs. As Elsa said to me during our first meeting, “There are many apps that are very creepy. Agora is not and will not be one of them.”

One of the key professional responsibilities of lawyers is to provide service to all clients, regardless of our own personal beliefs on the subject of the matter. When I read my Transactional Law Clinics (TLC) colleague’s notes from her intake interview with Agora after being assigned the matter, I became nervous. Privacy and user data protection are issues I deeply care about and like many, I find the overly personalized ads on Facebook disturbing. I doubted my ability to remain objective and effectively represent Agora, especially when it came to negotiating contracts about user data analytics. Ultimately I resolved to stay on the matter and I am glad I did.

While I advised Agora as a student attorney for three months, I gained the experience of a well-rounded start-up lawyer. I researched and advised on issues as diverse as voting provisions in by-laws, splitting ownership and control of the company, applicability of U.S. securities laws to foreign investors, and employment law implications to start-ups, just to name a few. I helped Elsa finalize Agora’s corporate formation in Delaware, drafted Agora’s by-laws and numerous Board documents, and drafted licensing and referral agreements to be used with future clients (one of which was executed shortly after my semester and thus work for Agora ended). I also had a chance to cooperate with a student attorney from the Cyberlaw Clinic at the Berkman Center, who I brought in to advise on Agora’s privacy policy.

Working with Agora through the TLC was one of my most challenging and rewarding experiences at HLS. I learned how to be a real lawyer, something that most other courses unfortunately fail to teach us. But most importantly, TLC gave me an opportunity to help an extremely talented young entrepreneur execute her vision for improving the world around us and giving a platform to drive change to those who did not have one before.

[1] Phil Webster, Supercomputing the Climate: NASA’s Big Data Mission, CSC World, available at http://www.csc.com/success_stories/flxwd… (last visited March 5, 2015).

[2] Elena Kvochko, Four Ways to Talk About Big Data, World Bank, available at http://blogs.worldbank.org/ic4d/four-ways-to-talk-about-big-data/ (last visited March 31, 2015).

Former Transactional Law Clinics Fellow Therese Rohrbeck Launches New BusinessVenture

L-R: Therese Rohrbeck, Philip Meers

[Posted on January 27, 2014 in the HLS Clinical and Pro Bono Programs Blog]

On Wednesday, HLS alumna and former Transactional Law Clinics Fellow, Therese Rohrbeck ’08, was featured at Harvard’s Start, Run, Grow: Exploring Entrepreneurship event, where she discussed how she started her new venture, Saga Dairy, which is producing Viking Icelandic Yogurt. “The idea was born when my fiancé and I were shopping for yogurt at a whole foods store and noticed the Icelandic yogurt, a new product with a high price tag” said Therese. “We wanted to create something that was more affordable and we started to experiment with making our own yogurt at home.”

Moving from kitchen to mass production, however, was more complicated; from laboratory to product design, to packaging, Therese drew on her skills and knowledge she acquired from her time with the Transactional Law Clinics. As a Fellow, she worked on all kinds of legal transactions with entrepreneurs and small businesses, learning about the legal obstacles and strategies for overcoming them.

“I gained the skills that are the building blocks, necessary to make someone successful” she said. “From for-profit to not-for-profit, from restaurants to selling t-shirts, I learned about the tax issues and the necessary steps to form a viable company. And if you understand the legal system, you are less intimidated to build something from scratch. My time at the Transactional Law Clinics, not only gave me my legal skills but taught me entrepreneurship, business, and negotiation.”

Transactional Law Clinics Help Start-Up Microbrewery Raise Capital

[ Posted on January, 24 2014 in the HLS Clinical and Pro-Bono Programs Blog]

By: Christine Marshall, J.D. ’14

Christine Marshall, J.D. ’14

Recipe for an exciting start-up: begin with advanced fermentation technology, create an innovative craft microbrewery, and mix-in local urban growers. This is the strategic plan of one of our clients. In Fall 2013, the Transactional Law Clinics (“TLC”) helped this start-up company launch a small private placement offering to raise capital for its operations. The company is raising investment capital to start the first craft brewery of its kind in Somerville, Massachusetts. In addition to being a production facility and retail taproom, the company’s headquarters will also serve as a local foods hub by hosting a range of small urban growers in a communal space for manufacturing and direct retail. Within the next few years, the company anticipates launching a unique business incubator to drive development of interdisciplinary ventures in fermentation technology. Because the client expects to be continuing its private placement offering at the time this article was scheduled for publication, the company is not named in this article.

Four local entrepreneurs founded the business in January 2013. Three of the four are graduate students at MIT, Harvard, and Yale, and the fourth is a software engineer. Collectively, the four founders have a wealth of expertise in microbiology, computational biology, and engineering. They located their operations in Somerville because they believe that the local craft beer market is underdeveloped. As they explained, Somerville is a city of 76,000 people and the most densely populated township in New England, but does not have any production craft breweries. The founders estimate that the size of the Somerville beer market is about $50 million annually, assuming a price of $20 to $40 per gallon and beer consumption at the 2012 Massachusetts average of 26.2 gallons per legally-aged person.

TLC Student Karl Sigwarth ’14 began working with the company in Spring 2013 to draft an operating agreement. The agreement was finalized in September 2013, but the Founders’ plans were unexpectedly delayed due to the federal government shutdown on October 1, 2013. The company was unable to file its application for a federal brewing permit with the Alcohol and Tobacco Tax and Trade Bureau as planned, causing a setback of about a month. With production delayed, the company reached out to TLC for help raising capital to bridge the gap. Christine Marshall, TLC Student ’14, worked on the case, and was supervised by Joe Hedal, Deputy Director of TLC.

TLC recognized that there were limited choices available for fundraising since the company did not want to amend its operating agreement until after the permitting process was complete and, as a start-up, could not access traditional bank loans at desired rates. With TLC’s guidance, the company is conducting a convertible note offering. This structure enables the company to raise funds from investors immediately and repay them with equity when the notes convert. Christine helped the company draft a convertible note and private placement memorandum, use an exemption from federal securities laws, and comply with applicable state securities laws. Christine commented: “While Rule 504 of Regulation D under the federal securities laws applies as expected, I was surprised by the variation in state securities laws. In terms of the convertible note purchase agreement, I tried to keep the document as simple as possible since the company intends on offering the securities to friends and family investors. I found it interesting and challenging to look at complex precedents from other deals and decide what concepts should be included in the note agreement to appropriately balance precision and completeness with simplicity. Overall, I think that both the PPM and convertible note purchase agreement will serve the client’s interests well and enable them to conduct a successful offering.”

The case was a wonderful opportunity for TLC students to learn how to conduct a small private placement offering and navigate securities laws, while providing valuable services to local entrepreneurs. Professor Brian Price, Director of TLC, stated: “This case represents the kind of experience students are able to gain assisting clients to figure out and implement solutions in fast moving real time contexts handling challenging multi-doctrinal legal matters. Not only did Christine benefit from the learning experience but so too did her clinical student colleagues.”

The company is well on its way to achieving its capital target to fund its near-term operations and looks forward to a grand opening in Spring of 2014. As one of the founders observed, “We never imagined that the government shut-down this past fall would delay our federal permitting and put our plans on hold. The work and guidance provided by TLC and Christine was a great help to us as we navigated through this obstacle.” TLC is pleased to have the opportunity to serve the local community and provide students with a variety of meaningful assignments that provide practical legal training while in law school.

TLC Assists Her Campus Media with Trademarks

HLS student, Katy Yang ’12, represented Her Campus^® Media, the #1 online magazine for college women, in trademark work leading to federal registration of several important marks for the rapidly growing online start-up. Her Campus has recently obtained a registered trademark for the mark “collegiette”^® and in 2011 also obtained federal registrations for its “Her Campus”^® name and logo. Her Campus was founded in September 2009 by three Harvard College students. The start-up was a winner of Harvard’s business plan competition, the i3 Innovation Challenge, in March 2009, and also among the winners of last year’s MassChallenge start-up competition. Her Campus now claims a readership at of over a half million monthly at over 200 colleges and describes itself as “a collegiette’s guide to life” (a “collegiette” is the start-up’s term for a Her Campus reader).

While working in the Transactional Law Clinics, Katy worked with entrepreneurial clients on several for profit and non-profit matters, including the work with Her Campus. The experience provided her with the opportunity to develop practice skills and experience in new substantive areas, all the time working with real clients. Katy commented on representing Her Campus, “The uniqueness of working with a student start-up and the opportunity to learn a new area of law while helping a client made this work especially meaningful. ” Katy’s work was supervised by Joe Hedal, an attorney and clinical instructor at TLC.

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