Raising money through VCs and angel investors often means dealing with complex legal documents, such as convertible loans (also called bridge notes) and preferred stock purchase agreements. While there is a movement to simplify these financing options, they still come with a set of relatively complex legal documentation. In contrast, a loan agreement — which is really just an IOU — is far simpler.

That’s not to say that raising money through loan agreements is easier. VCs and angel investors are investing for the big upside, not for returns on an interest rate, so it’s unlikely that you’ll find those kinds of investors who are willing to do a loan instead. However, your Uncle Bob or your best friend Smitty, who just want to help you get started or to expand, might be open to doing a loan.

Here’s why a loan is simpler than other forms of raising money…

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As an employee at a startup, it is common to receive stock options as part of your compensation package. An option is the right to buy shares in a company at a set price after a certain date. Options are all about timing. Here are four dates you’ll want to keep in mind to understand how your options translate into value over time.

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When it comes to option pools, founders and investors care about how the pool affects the company’s valuation, what the company looks like fully diluted, and what happens to the options in an acquisition. There are a lot of great posts out there regarding what founders and investors should be aware of regarding option pools.

As an employee with stock options, you don’t need an in-depth understanding of all the issues surrounding option pools. In fact, all you really need to know is how much of the company you’re going to own. However, understanding a little bit about option pools will give you some useful insight to where the company is going and your future prospects.

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Many companies issue their employees equity, or stock, as part of an overall compensation package. Two of the most popular forms of equity granted to employees are stock options (the right to purchase the stock at a set price) and restricted stock units, or RSUs (stock that is owned by the employee outright after working with the company for a set amount of time). While there are many considerations when choosing between options and RSUs, one of the most important things to keep in mind is how, and when, each is taxed.

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Founders often make a critical mistake when they setup a company: they forget to create a vesting schedule for themselves.

Usually it happens for a practical reason. When founders fill out the incorporation documents they list themselves as shareholders and, by default, these shares have no restrictions. An entirely separate contract must be drawn up and signed for the founders to create a vesting schedule. This costs money.

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We are building software to make all manner of business administration easier – particularly for people who have never done it before.

To do this, we study volumes of legal material, model scores of existing companies and hunt down business anomalies wherever we can find them. We then distill the rules and best practices across hundreds of jurisdictions and industries into simple building blocks.

In our research we come across many topics and issues that could use better explanation and examples. The web has plenty of sources for the definitions of concepts like S-Corp and option pools but they are usually painful for the novice or useless for the expert.

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