Founder Legal Protocol
Startup Founder IP Assignment & 83(b) Tax Cheatsheet
⚡ The Critical 83(b) Tax Election
- 🚨 Strict 30-Day Deadline: Must be mailed certified to IRS within 30 days of receiving restricted stock.
- ✅ Zero Flexibility: Missing this deadline triggers devastating ordinary income tax on equity as it vests.
- ✅ Certified Mail: Send with USPS Certified Mail + Return Receipt Requested.
- ✅ Corporate Records: Save a stamped copy in company legal records.
📜 Proprietary Information & Inventions (PIIA)
- ✅ 100% IP Assignment: Assigns all pre-incorporation code, domain names, and designs to the company entity.
- ✅ Prior Inventions Carve-out: Explicitly list any personal side-projects to prevent co-mingling disputes.
- ✅ All Contributors Must Sign: Founders, early contractors, and advisors must sign before writing code.
⏳ Standard Founder Vesting Protocol
- ✅ 4-Year Vesting / 1-Year Cliff: Standard venture capital expectation. 0% vests until Month 12 (25%), then 1/48th monthly.
- ✅ Double-Trigger Acceleration: Protects founders if company is acquired and they are terminated without cause.
- ✅ Repurchase Option: Company can repurchase unvested shares at original issue price if founder leaves.
🔐 Data Room Due Diligence Essentials
- 💎 Signed Certificate of Incorporation (Delaware Secretary of State)
- 💎 Bylaws, Board Consent, and Stock Purchase Agreements
- 💎 Fully executed Cap Table with SAFE notes and stock ledger
- 💎 EIN Confirmation Letter (IRS Form CP 575)