Category Archives: Attorneys

SAM Preccelerator Program Presents: “PR for Startups” with Jessica Engholm – ESSE PR



Join Stubbs Alderton & Markiles, LLP
for this exclusive event!



“PR for Startups”


ESSE PR’s founder Jessica Engholm will be providing an in-depth presentation and discussion on how startups can best utilize public relations.

Jessica will address the notorious questions that startups really want answered:

What type of companies need PR? When is it needed? What is the ROI? How much does it cost? Will it increase sales? How long will it take to see results? How should a startup select an agency?

The program will also include an overview of public relations strategies and tactics,  how PR differs between mature companies and startups, DIY methods versus professional services, and the ESSE PR program developed specificaly for startups.

Thursday, September 17, 2015




**Networking with food and drinks to start!**


***SAM Partner Scott Alderton to pass the
Heart Centered Tech Award to This Month’s Honoree***






Jessica Engholm, Founder, ESSE PR


ESSE PR’s Jessica Engholm, best known for avant-garde PR tactics, has worked with some of today’s most revered consumer brands, startups, technology, and entertainment entities. To name a few: HBO, Dove, Wells Fargo, PG&E, celebrities including Al Pacino and Ricky Gervais, Sarah Jessica Parker, as well as non-profits: Boys & Girls Club, Alzheimer’s Research for a Cure, Special Olympics, and UCSF Hospital.

Jessica is the founder and principal of ESSE PR, an agency aiming to redefine standards and practices of public relations. Based out of San Francisco and Santa Monica, ESSE PR has scaled to a network of more than150 publicists since 2009. ESSE’s clients, both established companies, as well as startups in Silicon Valley and Silicon Beach, are regularly featured in media majors including Fortune, Forbes, Wall Street Journal, Tech Crunch, NY Times, and more.

ESSE’s owner, Jessica Engholm has been nominated for PR Week’s 40 Under 40, and is a recipient of PR News’ Platinum Award for digital campaigns.

More information on ESSE can be found at

Additional Career Highlights of Jessica Engholm:

  • September 2012: Secured a partnership between The Officecreator Ricky Gervais and and the the technology startup CloudTalk. Developed a respective campaign that resulted in more than 500 M media impressions, 500,000 product downloads, as well as an API integration with Twitter.
  • March, 2014: Facilitating a partnership between fashion icon Sarah Jessica Parker and a Los Angeles based jewelry e-commerce company WeTheAdorned, resulting in 300 M media views pre-launch.
  • October, 2014: With relevant clients and experience with Silicon Valley startups and venture capitalists, Engholm was tapped as a PR and technical advisor to the HBO series Silicon Valley, Season 2. 


 Sponsored by


Stubbs Alderton & Markiles, LLP
1453 3rd Street Promenade, Suite 300
Santa Monica, CA 90401

4th Street/Broadway ramp or in the Santa Monica Place Mall

We hope to see you there!

SAM Client Atomico Leads $130M Round for ZocDoc at a $1.8B Valuation


ZocDoc announced that it has  closed a round worth $130 million, at a current valuation of $1.8 billion. The investment round was led by SAM client, Atomico, and the Scottish investment firm Baillie Gifford (which is also a Spotify investor), with participation from previous backer Founders Fund.

SAM Partners Ryan Azlein and Murray Markiles represented Atomico for this transaction.

About ZocDoc

ZocDoc is the tech company at the beginning of a better healthcare experience. Each month, millions of patients use ZocDoc to find in-network neighborhood doctors, instantly book appointments online, see what other real patients have to say, get reminders for upcoming appointments and preventive checkups, fill out their paperwork.


Founded in 2006 by Niklas Zennström, a co-founder of Skype, they have made over 50 investments over four continents, including Skype, Supercell, Rovio, Klarna, and The Climate Corporation, with an exclusive focus on the technology sector. Their sector expertise and deep network mean that they know, and have worked with, people across the world who can add value to their portfolio companies.

For more information about our Venture Capital and Emerging Growth practice, contact Scott Alderton at (818) 444-4501 or

Why Your Exit Strategy Matters

Michael_ShaffMichael Shaff joined the firm in 2011 as Of Counsel. He is the chairperson of the Tax Practice Group.  Michael specializes in all aspects of federal income taxation. He has served as a trial attorney with the office of the Chief Counsel of the Internal Revenue Service for three years. Mr. Shaff is certified by the Board of Legal Specialization of the State Bar of California as a specialist in tax law. Mr. Shaff is a past chairof the Tax Section of the Orange County Bar Association. He is co-author of the “Real Estate Investment Trusts Handbook” published annually by West Group.


Exit strategy, the plan for monetizing or disposing of a business, may seem remote and speculative when organizing a new business.  But it is important to know what exit strategies are available and how those strategies are likely to be taxed depending on the form of entity through which the start up does business.

  1. Sole Proprietorship. If a single entrepreneur does nothing more, he will be doing business as a sole proprietorship.  This is true even when the entrepreneur has adopted a trade name through which he does business, often referred to as a “D/B/A”.   The advantages for doing business as a sole proprietorship include not having to pay taxes and file tax returns for a separate entity and being able to include the results of the sole proprietorship on the entrepreneur’s own tax return.  The only exit strategy, if nothing more is done to transfer the entrepreneur’s business to an entity, would be the sale of the business’s assets.  If the business has inventory and accounts receivable the amount of the purchase price allocated to the inventory and receivables would be ordinary income for the selling entrepreneur.  The purchase price allocated to the intellectual property, going concern value and goodwill would be taxed as long term capital gain for the selling entrepreneur—provided the entrepreneur has conducted the business being sold for at least a year.  The obvious down side to operating as a sole proprietorship is the principal’s personal liability for all of the debts and liabilities of the business.
  1. General Partnership. If two or more participants conduct a business together and they do not form an entity, the result is generally going to be a general partnership.  For example, Charlie agrees to back Delta’s start up business.  Delta does most of the work and agrees that when the business starts to make money, it will repay Charlie’s investment then split the business’s profits on an agreed percentage.  Charlie and Delta may not even realize it, but they have formed a general partnership.  Each partner is responsible personally for the debts and obligations of the general partnership[1].  While it is at least theoretically possible that a buyer would purchase Charlie and Delta’s general partnership interests, the realistic exit strategy, without their doing more, is the sale of the assets of the business.  As in the sole proprietorship, the purchase price of a business sold must be allocated among the business’s various assets.  Both buyer and the sellers are expected to agree on the allocation of the purchase price among those assets[2].
  1. Limited Partnership. A limited partnership is an entity that the participants must affirmatively elect to adopt[3].   Like a sole proprietorship and a general partnership, a limited partnership is a pass-through entity—it does not pay income tax but instead passes its income or losses through to its partners in accordance with the terms of its limited partnership agreement and the terms of federal income tax law.  The general partners of a limited partnership are subject to personal liability for the debts of the limited partnership as would the partners of a general partnership[4].  The limited partners are afforded limited liability.  Like the sole proprietorship and the general partnership, the likely exit strategy is the sale of the business’s assets.  Also, like the sole proprietorship and the general partnership, a limited partnership (or a limited liability company) may contribute its assets or its partners may contribute their limited partnership interests to a corporation generally on a tax-free basis. [5]
  1. Limited Liability Company. A limited liability company (LLC) also is taxed as a partnership, meaning that the deductions from starting up and operating the business may be passed through to the investors who funded them.  A limited liability company affords limited liability to all of its members (except for those who signed personal guaranties of loans, leases or other obligations of the limited liability company).  LLCs and limited partnerships have the flexibility to issue a variety of classes of equity, including series of preferred having convertibility features, put rights in sum, having as wide a variety of terms as an investor and the principals of the business may negotiate.  LLCs and limited partnerships also have the ability to issue profits interests.  Profits interests are a way to give service providers (both employees and consultants) a stake in the appreciation of the company with no tax due on grant, no exercise price and capital gains to the extent realized on exit.  A profits interest is defined as a partnership interest that would yield no distribution if the partnership’s assets were sold at their fair market value immediately after the grant of the partnership interest[6].  Any type of investor may invest in an LLC without adversely affecting the LLC’s status[7]  If a potential buyer of the business buys some or all of the LLC interests, the sellers at least in part must allocate a portion of the sales price to inventory and unrealized receivables taxable as ordinary income. As previously noted, an LLC may convert to a corporation on a tax-free basis (in most cases) if possible buyers would be likely to prefer to use stock as the acquisition consideration. [8]
  1. Summary of Partnership Entities. The general partnership, limited partnership and limited liability company are generally treated as partnerships for tax purposes, meaning that they pass through the taxable income or loss to their equity owners.  The tax benefits of net losses passed through to the partners are subject to (a) the partner having sufficient basis in the partner’s  interest in the partnership (or LLC), (b) the partner being “at risk” for his or her share of the entity’s liabilities and (c) the partner being actively involved in the partnership’s business in order to claim net deductions[9].  In many cases, conducting the business through an LLC is sufficient—it provides (i) a single level of tax, (ii) limited liability and (iii) the ability to grant key employees and consultants incentive compensation without incurring tax for the recipient or the partnership.
  1. Corporations. Corporations are taxed under a completely different set of rules from those affecting partnerships.  Corporations are eligible for tax-free acquisitions when properly structured as (a) a statutory merger, (b) an exchange of stock of the target corporation for voting stock of the acquiring corporation or (c) the acquisition of substantially all of the assets of the target corporation for voting stock of the acquiring corporation[10]  Being able to receive the acquiring corporation’s stock tax-free in an acquisition if the acquiring corporation’s payment in its own stock were taxable, is a very helpful feature, especially when a lockup agreement is in place or the acquiring corporation itself is not publicly traded or is thinly traded—if the acquiring corporation’s payment in its own stock were taxable, the target corporation’s shareholders would be taxed on the value of the acquiring corporation’s stock but would have no way to raise the funds to pay the tax.  When sold, corporate stock yields capital gain or loss unless the seller is a securities dealer[11]  Conversion of a partnership or LLC to a corporation is easy and generally can be accomplished tax free[12].  There are two relevant types of corporations from a tax standpoint, C corporations and S corporations.
  1. C Corporations. C corporations are separate legal and tax entities from their shareholders.  C corporations pay tax at the corporate level and do not pass through any taxable income or loss.  Shareholders are only taxed to the extent that the C corporation pays a dividend distributions out of current or accumulated net earnings.  With certain exceptions[13], the dividends of a C corporation are not taxable when received by a tax-exempt entity and are subject to reduced US income tax withholding when paid to a foreign investor from a country with an income tax treaty with the US[14].  The insulation of shareholders, especially foreign investors and retirement plans, from the tax liability of the C corporation and the C corporation’s ease in being able to issue various classes of preferred stock make C corporations most attractive for important types of investors.  As previously discussed, sales of corporate shares almost always give rise to capital gain or loss and the selling shareholder does not have to allocate the sales price between an ordinary and capital portion.   Corporations are eligible for the tax-free reorganizations described generally in paragraph 6 above.  However, if a C corporation sells its assets to the acquiring corporation, the tax cost can be quite high:  35% federal corporate income tax and 9.84% California state corporate income tax with the net amount subject to tax when distributed to individual shareholders at up to 23.8% at the federal level and up to 13.3% in California.  A shareholder in a C corporation that sells its assets may only net about 40% of the total sales proceeds.
  1. S Corporations. S corporations are in many ways a hybrid cross of C corporations and LLCs.  Net income and net loss of an S corporation is passed through to the shareholders, so in that sense S corporations resemble LLCs as pass-through entities.  S corporations, like any other corporation, offer limited liability for all shareholders.  But S corporations may have only one class of stock[15]   The inability to issue preferred stock or convertible debt is a significant disincentive on the use of an S corporation—the issuance of such a class of securities would result in the automatic conversion of the S corporation to a C corporation.  The hardest restriction on the use of an S corporation is the exclusion of all non-US individuals as eligible shareholders[16] and the limitation of no more than 100 US resident individual shareholders.   As a corporation, an S corporation is eligible for use of the corporate reorganization rules.  Like C corporation stock, the stock of an S corporation generates capital gain or loss when sold.

For more information about exit strategies and their tax ramifications, please contact Michael Shaff at (818) 444-4522 or


[1]   Cal. Corp. Code §16306(a).

[2]   Internal Revenue Code (“IRC”) §1060(b).

[3]   Cal. Corp. Code §15902.01(a).

[4]   Cal. Corp. Code §15904.04(a).

[5]   IRC §351.

[6]    Rev. Proc. 93-27, 1993-2 C.B. 343.

[7]   Some entities like pension plans and IRAs may have to pay tax on the net income allocated to them from an LLC or other partnership that is engaged in an active business.  (IRC §512.)  LLCs and other partnership entities present similar issues for foreign investors.

[8]   IRC §751(a).

[9]   Generally, suspended losses may be claimed as the partnership generates net income or when it is ultimately disposed of.

[10]   IRC §368(a)(1).

[11]   E.g., Biefeldt v. Commissioner (7th Cir. 1998) 231 F.3d 1035.

[12]   IRC §351. Care must be taken to convert to corporate form before undertaking acquisition negotiations.

[13]   Voluntary employee benefit associations, supplemental unemployment compensations plans, social clubs and other exempt organizations that have borrowed to purchase the shares.  (IRC §512(a)(3).)

[14]   See, e.g., United States—Peoples Republic of China Income Tax Treaty (1984), Article 9, Section 2, reducing the withholding on dividends paid by a corporation from one country to a resident of the other from the general 30% withholding rate to 10%.

[15]   Differences in, or even a complete absence of, voting rights are permitted.  (IRC §§1361(b)(1)(D) and (c)(4).)

[16]   IRC §1361(a).

Stubbs Alderton & Markiles, LLP Continues to Expand First Class Business Litigation Practice Group

Leading Trial Litigator Joshua Stambaugh Joins Firm

Josh StambaughLos Angeles, CA (July 23, 2015) Stubbs Alderton & Markiles, LLP, Southern California’s leading business law firm, has announced that litigator Joshua Stambaugh has joined the firm as a Business Litigation partner in its Sherman Oaks office. The addition of Mr. Stambaugh continues to bolster the growth of the Business Litigation practice, bringing the group to 8 seasoned attorneys.

Joshua has extensive experience assisting businesses of all size, from Fortune 500 companies to internet start-ups, in virtually every area of commercial litigation, including: business litigation; interference claims; breach of contract; antitrust; unfair competition; misappropriation of trade secrets; fraudulent advertising; and class actions brought pursuant to consumer protection statutes. He has been ranked every year since 2009 as a Rising Star by Super Lawyers.

He has a proven track record of aggressively litigating matters of all sizes and finding sensible solutions for companies that are based upon both immediate and long term business needs. Joshua is particularly adept at handling discrete business disputes with the same vigor and efficiency of larger bet-the-company litigations, and within appropriate budgetary confines. He has extensive trial experience, and is able to handle commercial litigation matters at every stage of litigation, from pleading motions through oral argument on appeal.

Michael A. Sherman, the chair of the Firm’s Business Litigation group said: “Joshua is a first chair trial lawyer with proven courtroom capabilities.  We are delighted to have been able to attract such a star to our team, further demonstrating the Firm’s commitment to growing our litigation practice.”

Please visit for complete attorney bios.

About the Stubbs Alderton & Markiles Business Litigation Practice

The Firm’s litigators have significant depth and breadth of resources and a detailed knowledge of clients’ industries and business concerns.  In providing the best possible representation, our litigators appreciate that on occasion disputes may need to be tried to a judge, jury or arbitrator, and that in other instances the client is best served with an early resolution that is designed to preserve business relationships and minimize expense and litigation distraction.

Our litigators have a proven track record for analyzing complex legal and business challenges.  Our attorneys are experienced, innovative and aggressive in their pursuit of strategic outcomes.

We deliver efficiency and value to every client we serve through a well-defined budget and clear communication about their case.

To view the press release on PRWeb, click here.

About Stubbs Alderton & Markiles, LLP

Stubbs Alderton & Markiles, LLP is a business law firm with robust corporate, public securities, mergers and acquisitions, intellectual property and business litigation practice groups focusing on the representation of venture backed emerging growth companies, middle market public companies, large technology and Internet companies, entertainment, video games and digital media companies, investors, venture capital funds, investment bankers and underwriters. The firm’s clients represent the full spectrum of Southern California business with a concentration in the technology, entertainment, video games, apparel, consumer electronics and medical device sectors. The firm’s mission is to provide technically excellent legal services in a consistent, highly-responsive and service-oriented manner with an entrepreneurial and practical business perspective. These principles are the hallmarks of the firm.  For more information, please visit



Heidi Hubbeling
Stubbs Alderton & Markiles, LLP
(310) 746-9803

SAM Managing Partner Scott Alderton Honored with Heart Centered Tech Award


Scott_Alderton_cropStubbs Alderton & Markiles’ Managing Partner Scott Alderton was presented with the Heart Centered Tech LA Award at the Annual LA Venture Association (LAVA) Meeting on Thursday, July 15th. The award was handed off to Scott from Rich Abronson, last month’s HCTLA Award recipient.  SAM’s involvement in the LA Tech community led by Scott, along with his personal efforts to foster the growth of Silicon Beach and dedication to startups was the basis for this award recognition.

#HCTLA started as a way to acknowledge standout individuals who take part in using technology to help make this world a better place. Award recipients have healed hearts, built communities and contributed through technology. After 30 days, the recipients choose who the next HCT award winners should be, making this the first peer-to-peer awards ceremony of it kind that was appropriately launched in the #LATech #SiliconBeach community.

For more information on the award process, visit 

Business Law Breakdown – Amendments to the Delaware General Corporation Law Prohibit Fee-Shifting and Endorse Forum Selection Clauses

Nick-Feldman-smNick Feldman’s practice focuses on corporate transactions, including mergers and acquisitions, dispositions, private equity transactions and general corporate matters for both public and private clients, focusing on middle-market and emerging growth companies. In addition, Nick counsels companies in connection with entity formation, corporate governance, federal and state securities laws and compliance, joint ventures, employee incentive plans, executive employment agreements and other executive compensation matters.  Nick also serves as an Adjunct Professor at Loyola Marymount University, where he lectures on media law topics.


DelawareOn June 24, 2015, Delaware Governor Jack Markell signed several important amendments to the General Corporation Law of the State of Delaware (the “DGCL”) into law. The amendments, which will become effective on August 1, 2015, prohibit “fee-shifting” provisions and endorse forum selection provisions, among other changes.

Prohibition on Fee-Shifting

In response to the Delaware Supreme Court’s decision in ATP Tour, Inc. v. Deutscher Tennis Bund, 91 A.3d 554 (Del. 2014), the DGCL amendments invalidate “fee-shifting” provisions in certificates of incorporation or bylaws of stock corporations. In ATP, the Court upheld a bylaw imposing liability for legal fees of a nonstock corporation on certain members of the corporation participating in the litigation.

The new legislation narrows the ruling in ATP by way of new DGCL Section 102(f). That statute provides that a certificate of incorporation may not impose liability on a stockholder for the attorneys’ fees or expenses of the corporation in connection with an “internal corporate claim” as defined in new Section 115 (discussed below). The legislation also adds a similar restriction on fee-shifting provisions in corporate bylaws to Section 109(b). An amendment to Section 114 provides that the restrictions on fee-shifting provisions do not apply to nonstock corporations.

While the legislation invalidates fee-shifting provisions in certificates of incorporation and bylaws of stock corporations, it does not bar such provisions in stock purchase agreements or stockholders’ agreements.

Authorization of Delaware Forum Selection Clauses

The 2015 legislation confirms the holding of Boilermakers Local 154 Retirement Fund v. Chevron Corporation, 73 A.3d 934 (Del. Ch. 2013), adding a new Section 115 to the DGCL which confirms that a corporation’s certificate of incorporation or bylaws may require internal corporate claims to be brought exclusively in the courts of the State of Delaware. “Internal corporate claims” are defined to include claims of breach of fiduciary duty by current or former directors, officers, or controlling stockholders, or persons who aid and abet such a breach.

 Section 115 does not expressly authorize or prohibit provisions that select a forum other than Delaware courts as an additional, non-exclusive forum for internal corporate claims. However, it does invalidate any provision selecting courts outside of Delaware, or any arbitral forum, to the extent such a provision attempts to prohibit litigation of internal corporate claims in the Delaware courts. And, as with the fee-shifting amendments, it does not invalidate non-Delaware forum selection provisions in a stockholders’ agreement or other separate written agreements with stockholders.

Stock and Option Issuances

With respect to stock issuances, the new legislation amends Section 152 of the DGCL to clarify that the board of directors may authorize stock to be issued by the determination of a person or body other than the board, in one or more transactions and in such amounts and at such times as determined by the authorized party. In order to do so, the board must set certain parameters at the time it authorizes the issuance(s), including fixing the maximum number of shares that may be issued, the time frame during which such shares may be issued, and a minimum amount of consideration for which they may be issued.

Additionally, the legislation permits the board to delegate the ability to issue restricted stock to officers of the corporation on the same basis that the board may delegate the ability to issue options under Section 157 of the DGCL. Both Sections 152 and 157 are further amended to clarify that the board may determine the minimum consideration for such stock or options by way of a formula which references or is dependent upon extrinsic facts, including market prices.

Ratification of Defective Corporate Acts

The 2015 legislation makes several amendments to Section 204 of the DGCL, which sets forth the procedures for ratifying stock or corporate acts that would be void or voidable due to a “failure of authorization.” The amendments clarify and confirm certain provisions of the ratification process and provide additional guidance as to the specific requirements for the filing of certificates of validation, including: (1) confirming the requirements for a board of directors and stockholders to adopt and ratify one or more defective acts; (2) providing for ratification of the initial board of directors where it was not named in the original certificate of incorporation nor elected by the incorporator; (3) addressing the voting standards applicable to the ratification of the election of a director where the original vote obtained was defective; (4) clarifying the requirements for certificates of validation; (5) confirming the scope of acts by the board of directors or officers that may constitute a defective corporate act susceptible to cure by ratification; and (6) confirming that certain “voidable” acts may be cured by ratification under common law.

Implications: Action Items for Delaware Corporations

A Delaware stock corporation that has adopted a fee-shifting provision should consider amending its charter and/or bylaws, as applicable, to remove the provision because it will no longer be enforceable once the new legislation takes effect.

Further, Delaware corporations that have not previously adopted a Delaware forum selection clause should consider adopting one. And, as with fee-shifting provisions, a Delaware corporation that has adopted a forum selection clause prohibiting litigation of internal corporate claims in the Delaware courts should amend the clause to make clear that such claims may be brought in Delaware in addition to, or instead of, the forum currently specified.


For more information about services for your legal needs, contact Nick Feldman at or (818) 444-4541.

SAM Client Raises $5.3 Million to Deliver Video Recommendations

Iris.tvSAM client has raised $5.3 million in Series A funding for technology that makes personalized video recommendations to viewers who watch short clips online.  The startup’s customers are lifestyle, entertainment, sports and news organizations that own and publish a lot of short videos online, and who want to drive audiences to watch more videos through their own apps or websites rather than on YouTube or Facebook.

Publishers or networks can generate more revenue from videos viewed through their own apps, potentially, said CEO Field Garthwaite, in part because there are fewer distractions there than on social media platforms.

If users do fast-forward past one clip to see another using, the next recommended clip will be a video from the same content company that is tailored around their interests.

Investors in’s funding round included Sierra Wasatch, BDMI, Progress Ventures and individual backers including Machinima founder Allen DeBevoise, Lions Gate CFO James Barge as well as executives from Nielsen and AEG.

SAM Partner Louis Wharton represented in this transaction.

To view the full press release in the Wall Street Journal, click here.

For more information on our Venture Capital & Emerging Growth practice, contact Louis at (818) 444-4509 or

Business Law Breakdown – Five Reasons to Hire a Lawyer for Your Startup, and Five Things to Look For When You Do

Nick-Feldman-smNick Feldman’s practice focuses on corporate transactions, including mergers and acquisitions, dispositions, private equity transactions and general corporate matters for both public and private clients, focusing on middle-market and emerging growth companies. In addition, Nick counsels companies in connection with entity formation, corporate governance, federal and state securities laws and compliance, joint ventures, employee incentive plans, executive employment agreements and other executive compensation matters.  Nick also serves as an Adjunct Professor at Loyola Marymount University, where he lectures on media law topics.


In a perfect world, a business lawyer isn’t the person you run to when things go sideways—it’s the trusted advisor you consult regularly to anticipate challenges and put you in the best position to succeed. While it may seem like a luxury for some startups, there are several important factors to consider that make hiring a lawyer earlier than later a smart decision.


 Five Reasons to Hire a Lawyer for Your Startup


At the incorporation stage, the value of a lawyer has as much to do with helping you figure out what you need as it does with preparing documents. When it comes to what kind of entity to form, how to structure and distribute equity, or the best strategy to protect your intellectual property, a good lawyer will help guide you toward where you need to be—and then get you there.


 When people embark on a business venture together, it’s best to establish everyone’s rights and expectations at the outset in case there are disagreements down the road. It’s a lot easier to resolve a conflict before it arises, and you’d never imagine anything could break the bond between you and your co-founders… until it does.

 Intellectual Property

Intellectual property can be one of the biggest assets—and, if not protected, liabilities—of a startup company. Whether it means preparing nondisclosure agreements to protect trade secrets, drafting license agreements, defending trademarks, copyrights, or patents, or avoiding infringement of all of the above, a good lawyer will keep you protected.


It probably goes without saying that you don’t want to violate tax laws or incur unnecessary tax liability, and that you want pay the taxes you owe so as to avoid penalties. Tax laws can be complex, and a good lawyer will keep you ahead of the curve on tax issues and structure your business accordingly.


Finally, there’s the day-to-day legal that every startup encounters. Airtight vendor agreements, employment and contractor documents, and website terms of service and privacy policies are all invaluable for startups to get right—the first time.


Five Things to Look For When You Do


First and foremost, you want someone that is skilled and experienced with the types of legal issues you will face. This includes both the underlying business issues and the challenges specific to your industry—an attorney with knowledge relevant to your business is best positioned to become the advisor you need.

For many startups across the board, it’s extremely advantageous to hire an attorney (and law firm) with experience in both formation and financing. An attorney who regularly helps companies get “up and running” but is also frequently involved in seed-stage and venture capital financing will be able to give you better advice, and better facilitate accomplishing your goals.


It’s also important that your lawyer (and his or her firm) is a good fit for your company. This means someone that you get along with and enjoy working with, but also someone who “gets” your business and industry and has the resources at their firm to serve all your potential needs. If a lawyer doesn’t speak the language of your business or understand the world in which you’re operating, it’s harder for him or her to adequately represent you.


It should go without saying that you want a lawyer who responds to your calls and emails in a timely manner. What’s equally important is how they respond. A good lawyer shouldn’t just tell you “no.” They respond to a problem with the right questions and a new suggestion of how to get what you want: “This is what you can do.”


 You might be thinking about your lawyer in terms of connections or cache, and you wouldn’t be alone in that thought. While the expertise, fit, and responsiveness of an attorney should take precedence, the ability of your lawyer to introduce you to investors or potential partners—as well as their guidance in how to do so and the credibility they lend—is simply part of the value proposition.


 Let’s be honest: one of the biggest considerations in hiring a lawyer is the bottom line. The lawyers most start-ups deal with typically bill by the hour, and the hourly billing rate may vary widely between junior and senior lawyers. Depending on the complexity of your issue, the lawyer may be able to offer a flat fee arrangement to offer you some predictability, or at least offer an estimate of the amount of time it will take to complete the task at hand.

 If you make the time and effort to find the right attorney and firm, you can get quality representation at a fair price. In the long run, hiring a lawyer for your startup is worth it—in time and money saved, and stress avoided, by starting down the best path in the beginning.


For more information about services for your legal needs, contact Nick Feldman at or (818) 444-4541.

SAM Encourages you to Attend: Opus Connect’s VC Chapter: “Building for an Exit” – May 28, 2015

Opus Connect

VC Chapter:
Building for an Exit


Thursday, May 28, 2015

Venue:  Stubbs Alderton & Markiles, LLP
1453 3rd Street Promenade, Suite 300
Santa Monica, CA 90401


Entrepreneurs are driven by a passion to build companies. Inherent in this drive is the desire to create products or services that are superior to their predecessors, so that they make business more efficient, elevate the customer experience, or improve the quality or longevity of life. Of course, underpinning all entrepreneurial endeavors is the goal for profit and the maximization of enterprise value. While such value may be realized in many forms and through various mechanisms, it is the corporate “exit” with which most are keenly familiar. But, is it ever too early to plan for an “exit”? Should every CEO have an exit in mind when building a business? Does building for an exit conflict with the goal of entrepreneurship, which is to build great companies? Please join us for a lively breakfast discussion, where panelists will debate the merits and pitfalls of building early-stage companies for a corporate sale. Panelists will include seasoned entrepreneurs, investors, and bankers, with a range of perspectives on the topic at hand.


Kevin DeBré, Partner, Stubbs Alderton & Markiles, LLP – Kevin D. DeBré leads the intellectual property and technology transactions practice at Stubbs Alderton and Markiles, LLP, a corporate, securities, M&A and intellectual property law firm in Los Angeles and Santa Monica. Kevin is a business lawyer, a registered patent attorney and a former engineer. He advises entrepreneurs and companies that use intellectual property to build their businesses and also counsels clients on compliance with data security and privacy laws and regulations. Kevin received his J.D. degree from Hastings College of the Law and his B.S. degree from the University of California, Davis.


Roberta Jacobs, CEO at FANATTAC - Roberta Jacobs is a C-level executive who earned her global expertise in consumer technologies working for American and Japanese companies in Asia, Europe and Latin America. She was the decision-making executive for Viacom’s new media assets including Star Trek, Mission Impossible and SpongeBob. In between corporate positions she worked with well-known start-ups helping them to launch, get funded and/or acquired including Craigslist, WIRED, Hewlett Packard’s “portable music platform,” Sega, First Data Corporation and JVC Electronics. She has been instrumental in the sale of four different companies in part or in whole to First Data Corporation, eBay, Conde Nast and Forstmann Little.

Kambiz Aghili, Managing Partner at K2 Capital Partners  – Kambiz Aghili is a Managing Partner and a co-founder of K2 Capital Partners. He has more than a decade of experience in product strategy, management consulting, market and competitive positioning, intellectual property and operational advisory services. Prior to co-founding K2 Capital Partners, Mr. Aghili served as a managing partner at Eton & Stallion Capital, offering strategy consulting, capital formation, M&A and private to public structured products to family offices and lower/middle market firms. Mr. Aghili has served as a senior fellow for UCLA Anderson School of Management’s entrepreneurship center since 2009. In this capacity, he managed consultants and advised 100+ lower/middle market companies on growth and business strategy formation including business plan development, competitive positioning, sales/channel expansion, capital formation and post-merger integration. Previously as the managing director of the AFH Holding and Advisory family office in Beverly Hills, he led the placement of strategic private and public equity/debt investments. In his prior role as a director of product strategy and intellectual property for Teradata Corporation, Kambiz actively contributed to M&A engagements and strategic partnerships. He also led and contributed to numerous buy vs. build product roadmaps in emerging technologies, database management and big data analytics and managed large development teams across the U.S., India and China. Mr. Aghili earned executive training in business strategy from Harvard Business School, an M.B.A. from UCLA Anderson School of Management in business strategy and finance, as well as PhD and M.S. degrees in computer science from the University of California at Santa Barbara.

Brett Parker, Co-Founder & COO of Cargomatic, Inc - Brett Parker is Co-Founder and COO of Cargomatic, Inc., a technology platform that connects shippers and truckers in real-time (“Uber for Trucking”). Previously, as Managing Partner of The Triangle Group, Brett oversaw large national accounts, such as Dillard’s, Belk and Perry Ellis and was instrumental in Levi Strauss and Co.’s launch into Target and Walmart, considered one of the largest apparel launches in history. At Triangle, Brett was directly responsible for the strategic growth, as well as financial and operating performance of West Coast operations. Brett serves as a Board Member of the CSCMP, Southern California, earned a BA from University of Colorado, Boulder, and a JD from The Pepperdine University School of Law.

Jon Kraft, Managing Partner at LiftOff  – Jon Kraft has over 20 years of experience as an entrepreneur in software and consumer digital media, and is currently Managing Partner at LiftOff, a Business Accelerator, and an advisor for several early stage companies. He was most recently Chief Operating Officer and a member of the founding team at UberMedia, Idealab’s prominent Internet start-up which he helped build into the world’s leading independent developer of mobile social apps. Before that, he was Co-founder and Chief Operating Officer for Big Stage Entertainment, Inc., an advanced avatar platform company recognized by Forbes in 2009 as one of America’s 20 Most Promising Companies, and sold to Image Metrix (IMGX:OTC) in 2010. Jon previously served as Co-founder and CEO of Pandora Media, the largest and fastest growing online radio product in the world with over 150M registered users in the U.S. (NYSE: P). Jon was also a Co-founder of Stanford Technology Group, an innovator in the relational OLAP market, funded by Sequoia and Hummer Winblad, and acquired by Informix Corporation in 1995. Jon served four years as Chairman of the Technology Council of Southern California, and currently sits on that organization’s Board of Directors. Jon holds a B.A. from Stanford University. 

Stubbs Alderton & Markiles Attorneys Represent Vitesse Semiconductor Corporation in its Sale to Microsemi Corporation

vitesse homepageStubbs Alderton & Markiles, LLP announces that it represented client Vitesse Semiconductor Corporation (Nasdaq: VTSS) in its successful sale to Microsemi Corporation (Nasdaq: MSCC).  Microsemi acquired Vitesse through a cash tender offer and follow-on merger at a price of $5.28 per share, for a total transaction value of approximately $389 million.  SAM Attorneys John McIlveryJonathan Friedman and Daniel Kim represented Vitesse in this transaction that closed at the end of April.

For more information about the Public Securities Practice of Stubbs Alderton & Markiles, LLP, contact John McIlvery at (818) 444-4502 or

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