This document summarizes the key points from a presentation about relocating a startup to Silicon Valley. It discusses establishing a US corporate structure, typically a Delaware C-corp as the parent company. It also covers important considerations like tax issues, intellectual property, immigration, employment laws, and common pitfalls. The presentation provides an overview of these topics to help startups understand the major strategic and legal factors to consider for a relocation.
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8.20.20 How to Relocate Your Startup to Silicon Valley
1. How to Relocate Your Startup to Silicon Valley
Presented on August 20, 2020 by Jason Putnam Gordon
Email: jgordon@polsinelli.com
2. 2
• Today’s Discussion is General Information – Not Legal Advice
• We will be discussing rules and exceptions thereto. Those rules,
exceptions, and exceptions to the exceptions may not be applicable to your
situation.
• You need to retain competent legal counsel to review all facts and
circumstances before weighing in with advice.
• Off-the-cuff answers to your questions are not, and should not be taken as,
legal advice.
Important Caveats
3. 3
• My Background
• Big Picture
• Corporate Structure
• Tax Issues
• Intellectual Property
• Intercompany Agreements
• Immigration
• Employment Laws
• Common pitfalls and traps for the unwary
Overview
4. 4
• Venture Capital and Emerging Growth Company attorney—practicing law
since 2005.
• Polsinelli is an Am Law 100 firm with approximately 900 attorneys in over
twenty offices throughout the US.
• My office is in San Francisco, but I work with companies throughout the
US and the world.
• I love working with entrepreneurs on financings and as outside general
counsel.
My Background
5. 5
• Who is in a startup?
• Who is a founder?
• Is this your first startup?
• Who has previously had a successful exit?
• Who is interested in relocating their startup to the US?
What is your Background?
6. 6
Big Picture
Create Increasing Value
Idea(s)
(Intangible Assets)
Technicians who have
skills like: sales,
marketing, business
acumen
(Services)
Investors
(Capital)
7. 7
Big Picture
Create Increasing Value
Idea(s)
(Intangible Assets)
Technicians who have
skills like: sales,
marketing, business
acumen
(Services)
Investors
(Capital)
Company Increases in Value
8. Corporate Structure
Balance of several factors including
Business reasons
Tax issues
Fundraising concerns
Intellectual property concerns
Goods and/or services to be provided between the companies
Common options
Having a US corporation is not necessary, but typically advisable
Typically have a US corporation as the parent company
Typically a DE C-corp
Usually do not want having common shareholders of affiliate entities
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Include the following
Structuring the US corporation so that it is not a taxable event
Putting in place a structure so that foreign corporation is not subject to US tax
Tax implications for service providers
US employees
Probably includes officers
May include directors
Transfer Pricing
Concept is to ensure that corporate entities are not being used to fraudulently avoid taxes
via goods provided and services not being rendered a FMV.
Special filing issues
Tax Issues
10. 10
Types of IP in the US
Patents
Trademarks
Copyrights
Trade Secrets
Generally want all IP flowing up and into the parent with appropriate licenses
back down to subs and affiliates.
Generally want branding to be the same or similar between jurisdictions
Intellectual Property
11. 11
Intercompany agreements are the means by which the answers to the
foregoing issues are documented.
Goods and services to be provided
IP assignments and licenses
Treatment of derivative work
Compensation for the above
Intercompany Agreements
12. 12
Important to consider a number of factors including
Length of time in US
Time you have before you need the visa
Whether it will result in permanent immigration
Whether spouse will have a right to work.
Alphabet soup of options, which include:
B-1
O-1A
H-1B
L-1A
E-2
EB-1A
Immigration Issues
13. 13
Federal and state laws
Wage and hour issues
Contractor classifications
Unemployment insurance
Disability
Parental leave
IP assignment agreements and confidentiality agreements
Equity awards
Employment Issues
14. 14
Export Control Laws
Committee on Foreign Investment in the United States, also known as
CFIUS
Non-standard terms and/or documentation for VC-backed companies
Thinking the laws of the US and its states are the same the country of
origin
Tax and accounting issues
The wrong advisers
Pitfalls and Traps for the Unwary
16. Recognized by legal research firm BTI Consulting as one
of the top firms for excellent client service and client
relationships, the firm’s attorneys provide value through
practical legal counsel infused with business insight.
PRACTICE STRENGTHS TO ALIGN TO YOUR NEEDS
Health Care
Financial Services
Real Estate
Intellectual Property
Middle-Market Corporate
Labor and Employment
Business Litigation
GEOGRAPHIC FOOTPRINT SUPPORTS PRACTICE STRENGTHS
21
offices with full service
capabilities
Strategically located in
major financial centers
Located in gateway cities, as well as
offices with close proximity to critical
transportation and logistical hubs
BY THE NUMBERS
900
attorneys nationwide
45+
years of client service
170
services/industries
7
core practice areas
70th in Am Law’s
annual firm rankings.
Am Law 100 Firm
The American Lawyer
Recognized
for strongest client
relationships overall
BTI’s Industry Power Rankings
Excellence
in client service
BTI’s Client Service A-Team Report
11
national
Tier One
rankings
64
regional
Tier One
rankings
U.S. News and World Report’s “Best Law Firms”
Nationally
recognized
for Real Estate, Mid-Market
Transactions & Disputes Financial
Services, IP and Health Care