The life blood of our society and economy is propelled by small business innovation. Small businesses are the most innovative and nimble and create more jobs then the large multinational corporations.

According to the Small Business Administration (SBA), small business “represent 99.7 percent of all employer firms…. and generated 65 percent of net new jobs over the past 17 years.” Whether you are brainstorming the next big thing or expanding an existing business, it is important to have a forward-looking, business-minded, and practical counsel to aid in your pursuit.

Eric H. Milliken has coached and counseled multiple Start-Ups into multimillion-dollar corporations, giving businesses the ability to create jobs and innovating the California business environment. This website can be used as a resource for starting or maintaining your business. Please browse the BLOG section for many how-to guides. When you feel the need to speak to counsel, call (415) 341-2888 to schedule a free consultation with a San Fransisco Attorney.

YOUR BRIGHT IDEA COMES TO LIFE WITH THE HELP OF A SAN FRANCISCO ATTORNEY

As a San Francisco Attorney I represent quite a few Start-Ups. Every Start-Up ask the same questions, how do I get investment capital and “Do you know someone who would invest in my company”? The fist step toward investment capital is education. This post is an educational piece to education the Start-Up about capital.

Organic Growth:

When your big idea with the small budget needs the extra boost to get to the market place, you figured it was time to take the next step. Your business plan: go big or go home. So far it has panned out well, as your wallet is so full you need an accountant to carry it for you, and you want to reinvest those earnings back into the future of your business.

This is Seed Capital, a small but often risky investment from the pockets of company founders’ friends and family. Think of this investment as everything needed to nurture a seed into full bloom (yes, it’s corny—maybe it’s a seed of corn we’re nurturing here). Seed capital covers the gamut of all expenses needed to start your business before you bring in revenue, hence the risk.  However, for those willing to take this leap of faith, the payoff can be immense.

Though similar, be careful not to confuse seed capital with Angel Capital, in which investors (often friends or family) provide a capital investment with a targeted goal of company success. This money is more intended to ensure the progress and reaches of your grass-styling enterprise rather than simply an avenue to increase the investor’s profit; it is an investment backing the entrepreneur more so than the company itself (yes, this is most likely the category into which your mother will fall).

So you’ve taken hammer to piggy bank and have seen your former hobby take its first steps as a full-fledged business; your risk paid off, and you’re not the only one who has noticed. Queue the investors, as the growth potential of your business has been deemed worthy of their funds. This Venture Capital is a crucial asset to businesses without access to large capital markets. As a San Francisco Attorney I see this money coincides with the technical know-how and managerial savvy of a group of experienced investors or firms, but this often comes at the expense of your complete freedom in managing your company; because they have a stake, they have a say.

Yes, starting a business is expensive, and yes, the occasional schmoozing required may reminisce the

carefully worded monetary requests from mom and dad that marked adolescence, but money is but a

detail standing between you as a dreamer and you as a successful entrepreneur. So make your mother

proud and fuel the start of accomplishing some career dreams, capitalize on capital, and start a business.

Don't Sign until you have had a San Francisco Attorney review your documents

For all the details, A-Z, on your investments, pay a visit to http://www.investopedia.com/

When you have an investor on the hook and it’s time to discuss term sheets, call Eric H. Milliken, a San Francisco Attorney for a free consultation.

 What is Venture Capital (VC) by Eric H. Milliken, a San Francisco Attorney

Your Start-Up Pitch:

As a San Francisco Attorney I help many start-ups. Most everyone in the start-up world has heard of the elevator pitch. The scenario goes like this: You are on your way to a meeting and step into the elevator. Lo and behold, who do you see next to you but Bill Gates [substitute your dream investor here]. He presses the button for the fifth floor, giving you 30 seconds to deliver your value proposition or “elevator pitch.” And…Go! The seconds are ticking by and you have one chance to make a connection, you have one chance to make an impression. You must convince him that your company is a good investment and to set aside some time for a real meeting. That is a lot to do in 30 seconds.

No one should craft your pitch for you. After all, it’s your idea, it’s your business, and no one knows it better then you do. However, listed below are some pitch words that can excite your audience.

Soft and safe words:

-          Instrumental
-          Leading
-          Groundbreaking
-          Passionate
-          Best
-          Exclusive

With more risk should be more reward:

-          Game Changer
-          Explosive
-          Fantastic
-          Revolutionary
-          Trend Setter|
-          New Concept

These are just a few of the words that can help intrigue your audience. The best advice is to practice in front of the mirror, memorize your pitch, be confident, and most of all SMILE. Don’t ever underestimate the power of a genuine smile; studies show that people respond better to you, even over the phone, if you are smiling. (It’s not a bad idea to have a mirror on your desk to remind you to smile when talking to potential customers and investors.)

That being said, most of your pitches are going to be over email. With that in mind, DO NOT over-do it. Keep you pitch short and to the point. The general rule is that your pitch should be less than a paragraph, with an emphasis on your value proposition. And whatever you do, do not send the same generic boilerplate elevator pitch to every investor. Believe it or not, they can tell. Put the time into researching the investor; make the pitch custom for them. Find out what they have invested in recently, where they made their money, and what makes them tick.

When it comes to the elevator pitch, remember to practice, practice, and practice; because you never know when you will run into your dream investor.  Then, when you have them on the hook and it’s time to discuss term sheets, call Eric H. Milliken, a San Francisco Attorney for a free consultation. You may want to also read, Investor Due Diligence

Eric H. Milliken, a San Francisco Attorney

 Your Start-Up Pitch: by Eric H. Milliken a San Francisco Attorney

What is a California Benefit Corporation (B Corp) by Eric H. Milliken, a San Francisco Attorney 

As a San Francisco Attorney I have been getting a lot of requests for the newest type of Corporation. Experienced San Francisco Attorneys know to ask the right questions and guild their clients to the best entity for them. This blog has some of the pros and cons of the Benefit Corporation, keep in mind it is very important to consult with an experienced business attorney before filing with the Secretary of State.

On January 1, 2012, California became the sixth State to authorize Benefit Corporations. The California State legislator signed a bill allowing the Secretary of State the power to issue Benefit Corporations (B Corp). The first questions everyone asks are: What is a benefit corporation, and who does it benefit? The short answer is a benefit corporation is a combination between a for-profit corporation and a non-profit. This new model allows entrepreneurs and investors to pursue both profits and social benefits. The Benefit Corporation gives new companies the opportunity to pursue the triple bottom line (http://en.wikipedia.org/wiki/Triple_bottom_line) without the threat of shareholders lawsuits. There is a significant number of entrepreneurs who are about more than just the money; they want to change the world. For this reason, the California legislator enacted the Benefit Corporation, so that do-gooders can do good and make some good green along the way.

There are two ways to become a Benefit Corporation;

1. File free-form articles with the California Secretary of State. Since this is such a new business entity, there are no standard forms for filing yet; therefore, you must use the California C Corporation form with added language, and file through the California Secretary of State, pay the fee, and incorporate specific language into your By-Laws.
2. You can become a Certified Benefit Corporation through Bcorporation.net http://www.bcorporation.net/Certification-Overview, which requires a few steps;
   1. Take the B Impact Assessment
   2. Complete an Assessment Review
   3. Submit Supporting Attachments
   4. Begin Adopting the B Corp Legal Framework
   5. Pay the Certification Fee

Since the B Corporation is so new, we are left with many questions

1. What obligation do the shareholders/owners have if they incorporate as a Benefit Corp?
2. Can the shareholders sue if the Chief Financial Office is not living up to the statute?
3. Will venture capitalists invest with a Benefit Corporation?
4. Can a Benefit Corporation go IPO (Initial Public Offering)

Since Benefit Corporations are so new to us, these questions may not be answered for a few years. As California and Federal case law develops, the answers to these questions will emerge.

This leads to the question, what are the benefits to a Benefit Corporation?

1. One of the primary benefits is to give the consumer transparency.
2. Enhanced consumer approval. Since the bottom line is not the top priority, it stands to reason that consumers will tend to favor Benefit Corporations over standard corporations.

Eric H. Milliken, a San Francisco Attorney

This article was intended to highlight some of the pros and cons of a Benefit Corporation. For more information and a free consultation, please contact Eric H. Milliken, a San Francisco Attorney. You may also want to read: 5 Steps to Getting Down to Business.

Start-Up Programs:by Eric H. Milliken, a San Francisco Attorney

Tech Gold Rush!

Believe it or not we are in the middle of our second tech boom. Some call this the “Facebook Factor”. Every investor is looking for the next big thing, the next Facebook. As a San Francisco Attorney I have seen robust interest in high tech companies. The tech start-up gold rush is on. It does not take a business law attorney to see a perfect storm of opportunities, with so many talented people being laid-off, with information technologies making any motivated entrepreneur into an expert, and investors scouring for the next big thing. The question is, “Should I do it myself, or should I take on an investor?”. There is no easy answer; each business is different.

Organic Growth:

Some start-ups want to grow organically (only grow with hiring based on incoming revenue).  There are several advantages to organic growth over an investor-funded start-up.

1. The founder(s) can maintain control of all aspects of the company.
2. The ability to stay in stealth mode until you are ready for the market place.
3. You can operate under a simpler Limited Liability Company, Sol-Proprietor or Partnership agreement.
4. When your payday comes you will have a 100% share of profits.
5. No oversight or compliance issues.
6. Less need for a business law attorney.

These are just a few of the reasons to reject outside investors.

Investor Growth:

Others believe that taking an investor can help overcome the start-up growing pains. If your idea is sound then extra capital can only help bring your idea to the market place, faster, with the needed staff, and your technology/infrastructure in place.

1. Investor capital can help you bring your idea to the market place faster.
2. It gives you the opportunity to hire employees as needed.
3. You can buy/lease office space.
4. You can setup the proper information technology.
5. Many investors offer professional guidance and structure, i.e. deadline, for better or worse.
6. Give your company credibility in the market place.
7. More need for a  business law attorney.

There are no right or wrong answers; every start-up needs to find what is right for them. Before you make your decision it may be worth doing some research.

Here is a list to some seed capital funds.  Seed capitals essentially give you the guidance and opportunity to refine your business plan and prepare yourself for your first round of Angel capital.

Y Combinator, or (YC) as it is known in the tech circle, takes two classes a year of about sixty start-ups, offering the start-up a very valuable opportunity. If you are one of the lucky 3% that get in:

1. You are able to vet your idea;
2. They will help incorporate your business;
3. They will give your company some modest seed capital, averaging around $18,000;
4. Mentor you through the first three months of your start-up;
5. Set firm deadlines, and launch dates;
6. Give you an exclusive network of start-up entrepreneurs;
7. Incorporates your business;
8. You get access to Demo Day, where they introduce you to some of the most influential people in the tech community and investors.

They will do all this for a small piece of your equity. For more information go to  http://ycombinator.com/

500 Start-ups is a seed accelerator primarily focused on internet start-ups. They provide guidance, capital and networking for internet start-ups. They provide between $10,000 and $100,000 depending on your needs. For more information go to 500.co

Green Start is a start-up incubator located in San Francisco. They modeled their program after YC, however, they focus on Clean Tech start-ups. This is their first year and they just graduated their first class. They offer between $20,000 and $100,000. For more information go to Greenstart.com

The true value of these Start-up Programs are the connections they give you with investors, getting your start-up publicity and bringing your idea to the market place in a timely manner.

Before you sign on the dotted line it is important to consult with an experienced Business Law Attorney to review the contract terms. Eric H. Milliken, a San Francisco Attorney has the requisite legal expertise to guide you through the shark infested waters of Venture Capital investment.

Termination of Employment, A How to Guide for California:

Business is business, and under certain circumstances, getting the difference between getting the job done and getting the job done right may mean ‘letting go’ of that employee that has become more of a burden to productive than an asset. These are stressful circumstances for all both parties, and it is crucial that you as an employer establish (and enforce) a policy somewhere between the ‘it’s not you, it’s me’ break-up talk and the more Donald Trump’s blunt strategy for the employee termination talk, “you’re fired.” Follow this list of do’s and don’t’s, and you should complete the process with ease.

DO keep detailed documentation of every infraction your employee commits, as well as a written record showing said employee was made aware of the mistake, including penalties for future violations. Though this may increase paperwork, should termination become necessary it will help you as an employer avoid potential discrimination lawsuits and unwarranted unemployment assertions.

Some employees follow the rules as good as any third grade teacher’s pet, but still hinder business productivity. This is a common scenario in which adherence to rules and policy is not what is at issue, but consistent, under-par individual performance requires further action. In this situation it is important to have a log of your employee’s work and progress. DO make it a policy to keep records of performance for all employees as related to the scope of their individual job description, as this evidence of sorts will prove crucial should termination become necessary.

You’ve warned your employee, he or she was made aware of the consequences, and you still find yourself correcting their errors, DO have an established policy for employee termination.  Equally as important to the policy itself is its non-biased enforcement. There should be a written, expressed documentation of both the grounds that warrant a termination, as well as the means of doing so. All employees should become familiar with this policy upon hiring.

Just like break-ups, firing coworkers can be messy, but DON’T be tempted to treat each incident on an individual basis, as this could invite a slew of discrimination complaints with lawsuit potential. So as hard as it may be to give your friend and coworker the slip, DO stay true to your policy ensure this is done from a neutral, unbiased perspective.

DON’T draw out the process. Be assertive and to the point, pull off this less than pleasant conversation quick like a Band-Aid.

DO temporarily redistribute the ex-employee’s responsibilities amongst your other employees; this will help ensure there is no work deficit in this position during the hiring process.

DO end on the best note possible, a handshake and wishing well can go a long way.

Read more at CA Employment FAQS:

For more information contact the Department of Industrial Relations:

If you are questing your procedures, call Eric H. Milliken at (415) 341-2888 for a free consultation.

The contract has gotten a bad name! I am a San Francisco Attorney and I find myself skimming over internet “Terms of Use” agreements. I know how it feels when you are presented with a long winded contract written in legalese. I was recently presented with a commercial lease that seemed to have been written in the 1950’s, using convoluted legalese that makes your eyes water after the first page.  Most modern attorneys are moving away from the 1950’s style of eye watering, mind numbing, incomprehensible contracts. As a San Francisco Attorney I am proud of my plain English comprehendible binding transactional contracts.  A clearly written contract is beneficial for all parties involved. (This fact may have been lost on most cell phone providers!) Time and time again I speak to new businesses that begin between friends. When these businesses begin making money, confusion ensues.

Don't Sign until you have had a San Francisco Attorney review your documents

The point of a well written contract is to define everyone’s duties and responsibilities, and most of all, who earns what! With the legal guidance of Eric H. Milliken, a San Francisco Attorney your business contracts will be comprehendible and enforceable. You may also want to read Contract Preparation Tips.

You may also want to read: Labor Department “The Does and Don’ts for letting go of your employees:”

For a free consultation call (415) 341-2888.

5 Steps to Getting Down to Business.

With a stagnant U.S. economy, don’t look to the federal government to fix our economy – it’s up to us! The only way we are going to bring back a robust economy is to innovate our way into prosperity. The California Secretary of State has been swamped with applications for Limited Liability Companies, S Corporations and C Corporations. Many people are securing their future by bringing innovation to life. Let us help you with all aspects of starting your business venture! Eric H. Milliken, an Attorney based out of the San Francisco Bay Area, has more than 15 years’ experience with various start-up businesses and would love to help you though the process.

There are infinite business ideas. However, a successful idea is one that reaches the marketplace. We can help you refine your business plan, file the appropriate papers, and get your idea to the marketplace.

Step One:

Find a name. A business builds its reputation under a chosen trade name and/or trademarks. These names are business assets that add value to the business and can be sold or assigned to others along with the business. Depending on the scope of your business, choosing a business name may vary. Before adopting a business name or trademark, you should do the following research to avoid creating a potential infringement. If you are only serving your immediate community most people find it appropriate to do a fictitious business filing with their county (see San Francisco Clerk’s page at http://www.sfgov2.org/index.aspx?page=13). However, if you want to do business throughout the state, it is important to check the state business name search. See the link for the California Secretary of State’s business search: http://kepler.sos.ca.gov/. If your focus is going nationally, it gets a bit more complex.

In addition to doing a state search one will need to do a federal trademarks search. It is important to do a search early on before you invest too much into your name: http://tess2.uspto.gov/. A trade name or trademark are valuable business assets, which a business should seek to protect in order to protect the investment being made. This groundwork will help to establish a profitable business.

Step Two:

Write your Articles of Organization. If you don’t write and file your own Articles of Organization, the California Secretary of State will form a standard article, which may include provisions that do not suit your business. Eric H. Milliken, a San Francisco Attorney, can prepare attachment documents that will give you the desired control over your organization.

Step Three:

File the Articles and wait. When you have filed, the California Secretary of State will review your documents and either approve or deny your application. If they deny your application they will give you a list of reasons. With the proper guidance of Eric H. Milliken, Attorney At Law, answering these questions and fixing any errors will be fast and easy.

Step Four:

File your Operating Agreement. California requires an Operating Agreement. These agreements are the rules by which you govern your company. This agreement is quite possibly the most important part of your business. Eric H. Milliken, Attorney At Law, prepares his clients by giving the client a detailed checklist. This advance planning saves time and money.

Step Five:

Let’s get to business! It is time to start conducting business. It’s time to make a difference and make some money. It’s time to get our economy back on its feet!

You may also want to read: Lets Protect Your LLC or Corp for tips on protecting your new business.

For a free consultation, contact Eric H. Milliken, Attorney At Law at (831) 272-2482.

Protect Yourself:

Now that you are incorporated and in the black, it’s time to make sure you are well protected against liability. A California corporation can shield the business owners’ (shareholders’) personal assets from the debts, liabilities, and obligations of the corporation. Asset protection is one of the primary benefits to having a California Corporation, or LLC. Many do not realize that under the law, creditors are able to “pierce the corporate veil” of improperly maintained corporations, which allows creditors to attach owners’ personal assets (bank accounts, investments, and home) to satisfy corporate liabilities. It is very important to incorporate and to adhere to all corporate formalities. In today’s litigious business environment, one must protect their corporate and personal assets. Time and time again, businesses get on a role, start making money, and lose sight of their business obligations. It takes so much to build a business and yet with a few small slip-ups, it can all be lost.

Piercing the Corporate Veil:

There are three legal mechanisms for piercing the veil: first, bad accounting (co-mingling of funds); second, failure to obey the corporate formalities; third, threading your corporate entity as an alter ego. Let Eric H. Milliken guide you away from the pitfalls that many new businesses fall into.

Employment Contracts:

Avoid employment-related lawsuits by having well-prepared employee agreements. It is essential to have binding employment contracts, offer letters, nondisclosure and proprietary rights agreements, employee manuals and policies, termination letters, and severance pay agreements. In the event that a conflict does arise, it will be necessary to have a trained attorney negotiate the settlement claim. By formulating and implementing comprehensive employee policies and procedures through the hiring process, you will minimize your exposure to liability.

Don’t fall into the independent contractor trap. Many new businesses want to expand and hire employees. However, they don’t want to pay the state and federal taxes. The solution seems simple: Just call the new employee a contractor! This can backfire, though. If you have a dispute with an employee who blows the whistle to the California State Labor Commissioner, the Commissioner may determine your contractor is actually an employee. They can issue fines, but worst of all they will inform the Internal Revenue Services (IRS) of your tax evasion, which could lead to an audit. Let Eric H. Milliken make an air-tight employment contract. This will protect your rights and interests, and outline your new employee’s or contractor’s roles.

Insurance:

It does not take an attorney to tell you to get insurance. It’s a small price to pay for the peace of mind it will buy you.

Contract Preparation:

A clear and readable contract protects business relationships by defining each party’s legal obligations. A contract is a legally binding agreement between two or more parties to perform a legal act. People enter into contracts for many reasons. There are several factors to consider in order to determine whether a contract has been made and whether the terms are enforceable. If there has been a breach of the contract, there is a question of whether a party has incurred damages.

Contract Review:

Although some contracts seem straightforward, this is not always the case. Some provisions in contracts require legal expertise to determine whether they are enforceable in California Courts.

Partnership Agreements:

A well-written partnership agreement is essential to maintaining a productive long-term business venture. It is very important to have all essential terms in writing before conducting business. Well-defined terms put each party on notice regarding their duties and responsibilities. The most essential element is to have the profit-sharing agreement in writing before any profits are realized.

Liability is a dirty word. Let’s protect your company before a conflict arises! Let Eric H. Milliken give your company the proper guidance to prevent controversy and liability, and to keep your company yours.

Guide to Grant Writing and Fundraising

This guide was written specifically for non-profit organizations; however, the principles for writing a grant are universal for every organization, from the smallest non-profit to the largest multi-national corporation. This grant writing kit is only an example. Each grant is unique, and one must address the particular questions posed.