Joy: The Musical: An Entrepreneurial Story

People who know me, even just a little bit, know that I’m a passionate fan and supporter of musical theatre. Truth is that my wife and I (two lawyers with a spreadsheet) have seen just under 800 unique musicals together in our adult lives. 

Even if you don’t know me but have been a regular reader of entreVIEW (are there any regular readers?), you’d also know this because I have frequently written about musical theatre for this blog, including my very first real post on this blog over 14 years ago, which was about the Spider-Man Musical. I’ve also written about other musicals, including "Finding Neverland," "Ernest Shackleton Loves Me," "Matilda," and couple of favorites, "Here Lies Love," and, of course "Hamilton." In case that isn’t enough to show my passion for musicals I’ve also written about the musical I wrote, "Pickle-Chiffon Pie: The Musical," which has now been produced three times!  

Startup Law 101: 5 Mistakes That Can Blow Up Your Startup – Don’t Sign the “totally fine” ChatGPT Contract

Startups move fast, but legal mistakes move faster—and they hit harder. Whether you’re bootstrapping or backed by big VC, your lawyer isn’t just a formality—they’re your firewall. Too many founders treat legal like an afterthought, then wonder why things explode. From boardroom to courtroom, these are five founder mistakes that separate the bold from the bankrupt. So, before you launch that app, hire that friend, or sign that “totally fine” ChatGPT contract, read this:

1. Don’t Wait Until You’re in “Oh Sh*t” Mode to Call Your Lawyer

In the startup world, things move fast—your legal strategy should move faster. Waiting to bring in counsel until there’s a co-founder fallout, a misfired contract, or a surprise lawsuit is like trying to install brakes after your Tesla hits 90 mph. We’ve seen it all: 

• One founder stops showing up but still owns half the company because no one drafted a real agreement. 
• Someone grabs a one-page operating agreement off Google that leaves you stuck with default state rules that don’t fit your company’s needs. 

A little legal foresight upfront saves hours of cleanup later.

Bootstrapping or Capital Raising: The Founder’s Funding Dilemma

One of the primary issues the founders of a company face is determining how to fund the business. On the one hand, the founders could use their own personal funds and “bootstrap” the company. On the other hand, the company could raise capital through external sources like venture capitalists, crowdfunding, angel investors, or friends and family. Each of these options comes with its own pros and cons, ultimately leading young companies to ask its advisors, “which option is best for us”? Unfortunately, the usual answer is “it depends,” because there is not a one-size fits all solution.

At the outset, companies should consider the advantages and disadvantages of both options. Generally, the primary advantages of bootstrapping a startup are, among other things, (i) maintaining complete ownership and control of the business since all the equity is held by individuals who are (usually) actively involved in the business; and (ii) the potential for long-term profitability and M&A attractiveness, because of the company’s limited debt, low overhead, and minimal investor obligations. 

From Commodity Trading to Contract Law: What Entrepreneurs Can Learn About Risk

Before I became a transactional attorney, I was a grain trader. If you’re ever in an airport, you can spot a grain trader rather easily. They will be the person in a polo, grain company brand over their heart, pacing back and forth, trying to get just a little more phone time in before they take off to someplace else. On any given day, I might have fielded a hundred phone calls and reviewed well over a hundred pages of contracts before heading home. The pace was relentless, but what mattered most was precision. If you didn’t know the rules, the actual, technical rules, and understand the “industry rules,” you could expose the company to hundreds of thousands of dollars in losses from a single mistake. The margin for error was zero.

Maybe You Should File That Form D After All?

As a lawyer who frequently works with entrepreneurs raising capital, we are often called on to assist with compliance with state and federal securities laws. For those who don’t know, when you sell a “security” in a private offering, you need to have exemptions from both state and federal registration requirements for offerings of securities. In case you were wondering, a “security” is any instrument that has a future value tied to the success of the enterprise (e.g. common or preferred stock, promissory notes (convertible or otherwise), or SAFEs).

While there are other exemptions available in certain situations, by far the most common exemptions used are those under Regulation D. The SEC’s fiscal 2023 report indicates that $2.7 trillion has been raised in Rule 506(b) offerings, with an additional $169 billion in Rule 506(c) offerings (using general solicitation and verification of accredited status of investors), and $258 million in Rule 504 offerings.

The AI Revolution: Tech is Taking Over

Artificial intelligence isn’t just tech jargon anymore—it is the headliner at the global innovation festival. From self-driving cars to AI-powered investment tools, AI is flipping industries upside down and rewriting the startup playbook. PwC estimates that AI will add over $15 trillion to the global economy and boost local GDP by 26% by 2030, with the broader market projected to hit $826 billion in just five years.

That’s not just a stat—it is a wake-up call. AI has shifted from a niche subject to a main stage act, captivating everyone from Fortune 500 execs to founders and innovators who are either building with AI or competing against those who are. 

I remember back in law school, grinding through legal textbooks until 2 a.m. and the struggle was real. Fast forward to now, and tools like ChatGPT can solve a semester’s worth of problems in minutes. For entrepreneurs, this isn’t just technological progress — it is a massive shift in the rules of the game. The message is clear: adapt fast or get left behind. Or, as 50 Cent would say: “Get Rich or Die Tryin’.”

Patent and Trademark Applicants Could See Big Delays in 2025

Patent and trademark applicants are likely to see significant changes with their applications in 2025. First, numerous fee increases have recently taken effect – on January 18 for trademark applications and January 19 for patent applications. Second, applicants are also likely to see lengthened delays in the processing of new applications due to recent decisions by the new Trump Administration which may slow the operations of the U.S. Patent & Trademark Office (USPTO).

Two of President Trump’s “first day” Executive Orders issued on January 20 may present a pair of challenges to the USPTO’s efforts to review pending patent and trademark applications in an efficient and timely manner. A Presidential Memorandum was issued requiring all federal employees to return to in-person work. The USPTO employs about 14,000 employees, with 13,000 employees currently working remotely. The Memorandum could create changes in the available workforce depending on how it is enforced. Additionally, one of new Director Coke Morgan Stewart’s first actions as head of the USPTO, in response to a President Trump directive to shrink the federal workforce, was to put a freeze on new hires at the agency. This overturned a USPTO announcement in mid-2024 to hire 800 new employees – mostly new patent examiners – in an effort to address the increased backlogs of patent applications. The confluence of these two decisions could lead to fewer USPTO employees available, which would directly lead to greater increases in wait time for pending applications.

Entrepreneurship Through Acquisition

When the vast majority of people hear the word “entrepreneur” they think of a person that had an idea and set off to build a company from scratch. Building something from nothing is daunting to many people and the fear of failure and the unknown represent a large barrier that prevents many would be entrepreneurs from taking the leap into owning their own businesses. One option for those would be entrepreneurs that are a bit more risk adverse is to take the route of entrepreneurship through acquisition. Entrepreneurship through acquisition is, in its simplest form, just buying a business that is already operating.

Lessons from FARMCON: Kevin Van Trump’s Wisdom on Investing in Startups

Last week, I had the privilege of attending FARMCON in Kansas City, MO. Hosted by Kevin Van Trump, FARMCON brings together some of the sharpest minds in agriculture for a few days of networking, learning, and inspiration. For those unfamiliar, FARMCON isn’t your typical conference—it’s half market overview, half start-up incubator and designed to push boundaries and equip agricultural entrepreneurs with tools to thrive in an industry that’s as challenging as it is rewarding.

Kevin Van Trump, who is the man behind The Van Trump Report, is a well-known name that is synonymous with innovation and insight in the ag sector. Kevin started from the bottom of the commodities world in Chicago and built his reputation by not only understanding market trends but by helping others navigate them. Through his report, read in over 35 countries, and his consulting firm, Farm Direction, Kevin has become a trusted voice for farmers, investors, and executives alike. Kevin has an overarching passion for rural America—a passion that shines brightly at FARMCON.

While FARMCON covers a range of topics, Kevin ran a panel that offered insights on investing in startups, and his comments stood out as particularly impactful. His decades of experience investing in ag-tech startups and other ventures have taught him hard-earned lessons, many of which he shared during the conference. Here are my top five takeaways:

The Latest on Equity Crowdfunding

We’re excited to share that Lathrop GPM lawyers have again worked with an entrepreneurial client to successfully launch a crowdfunding offering. This time with a company specializing in products and related services for producing non-alcoholic offerings in the craft beverage industry. As always, we are constantly amazed at the level of originality, energy, effort, and, to state the obvious, entrepreneurship that infuses these endeavors at every level!

Our latest crowdfunding client success made us realize that it’s been a while since we’ve written about Equity Crowdfunding; so I think we’re well overdue for an update! As we have written before, prior to the 2021 SEC rule changes (the “2021 Rule Changes”), crowdfunding was limited to offerings of up to only $1.07 million, and investment by the “crowd” through “special purpose vehicles” (which has the practical effect of listing potentially hundreds of “crowd” investors as a single shareholder on your cap table) was not permitted. As a result, crowdfunding at that time did not present a very attractive capital-raising mechanism for most entrepreneurs; few such offerings had been initiated and most of them had not been unsuccessful. The 2021 Rule Changes, among other things, increased the maximum raise to $5 million, and permitted the use of a special purpose vehicle, organized and operating for the sole purpose of acquiring, holding and disposing of securities issued pursuant to a crowdfunding offering, and into which all “crowd” members made their investment. Three years on, how have the 2021 Rule Changes affected the use of crowdfunding as a productive means of raising capital?

Let’s roll the tape! *

So Many Things To Do; So Little Funding To Do It

The start of a new business is a pivotal time for any entrepreneur. Unless you happen to be a serial entrepreneur who has played this game before, you are likely overwhelmed with your to-do list and rarely feel like you have a good sense of whether you are making the right strategic choices for your fledgling company. Many first-time entrepreneurs are laser-focused on the product or service they are hoping to bring to the masses, but with that laser focus they may overlook some important considerations, like having the proper legal protections in place.

Even those entrepreneurs who have thought through legal considerations as part of their business planning process often try to get by with the bare minimum in the early days. Let’s be honest, the term “legal” often conjures thoughts of grey clouds in an entrepreneur’s otherwise sunny and optimistic vision for their new company. One of the key drivers of a start-up not putting in place all the legal protections that will help it to be successful as it continues to grow is a lack of funding to obtain expert advice. With minimal available resources, most entrepreneurs prefer to focus their initial dollars on getting their product or service to market.

A Post for National Pickleball Day (August 8, 2024)!

As frequent entreVIEW readers know, I am among the legions of people who became pickleball enthusiasts over the last several years, many of us (present company included) spurred on by the global pandemic. The statistics show that pickleball remains the fastest growing sport in the US, with about 50 million people in the US having played in the last 12 months, an explosive annual growth rate (over 85% in 2022). Contrary to popular perception, the average age of these players is 35 years old.

Lessons from the Roadside: Embracing Failure in Entrepreneurship

I identify as an entrepreneur - more accurately, a failed entrepreneur - but an entrepreneur, nonetheless. My personal experiences have taught me that failure is not a destination, it’s that strange, potentially intimidating rest stop you may be forced to visit during your entrepreneurial journey through the start-up desert, inching toward the oasis on the other side. Failure is that detour that makes you go “huh…” once its finally in your rearview mirror. In my younger years, I have had the opportunity to stop off at three of these less-than-ideal roadside attractions, each teaching me something new.

Women Who Mean Business

In previous posts, we’ve talked about the unpleasant but inescapable reality that an entrepreneur needs money to get a new business up and running, and to keep it running. Friends and family, crowdfunding, Shark Tank—all good possibilities.

Today, though, I’d like to remind all the women entrepreneurs out there of the numerous resources available to women-owned businesses. And out there you are! The 2023 Annual Report of the National Women’s Business Council estimates that women own more than 14 million companies, around 39% of privately held businesses, representing an increase of 13.6% from 2019 to 2023. Check out these:

Startups are Booming!

One of the many interesting side effects to the COVID-19 pandemic has been a reported boom in American startups.

On one hand, it makes sense. The world was faced with an almost unimaginable crisis that forced entire facets of society to pivot to new ways of operating. From zoom calls to facemasks, new needs required ingenuity and presented opportunities for entrepreneurs to answer the world’s problems. Many businesses repurposed themselves, adapting to the services they could and could not provide. And, of course, as social safety nets caught large droves of workers forced out, at least temporarily, from the workforce, it provided many people the space to reexamine their relationship with work, their families and the way they spend their time.

“MoviePass, MovieCrash,” an Interesting Exploration of the Entrepreneurial Roller Coaster

Stuck with a rainy Sunday afternoon this past weekend, I found myself landing on the just released HBO documentary “MoviePass, MovieCrash.” I didn’t really know much about the story in advance of my viewing, although I did recall a company that had launched a moviegoing subscription service about a decade ago. Maybe it’s my interest in the entrepreneurial experience, honed by a few decades of helping entrepreneurs build companies, but I found the movie quite interesting. Spoiler alert—if you want to watch the film (which I think it is worth your time), don’t read any further!

Farmers’ Market? More like Small Business Central

As the weather gets warmer and we emerge from our igloos here in Minnesota, one thing we are all looking forward to is being able to spend more time outside.

Whether you go for produce or local honey, to show off your newest cloth tote bag, or for just a sense of community, the local farmers’ market is the place to be. There is even a National Farmers’ Market Week (falling this year on August 4-10, 2024)! But what drives Americans to frequent farmers’ markets every summer without fail?

Last Call for 2024 MN Cup Submissions

The MN Cup, a program of the Holmes Center for Entrepreneurship at the Carlson School of Management at the University of Minnesota, is the largest statewide startup competition in the country! Since its founding in 2005, it has served over 0,000 entrepreneurs and awarded over $5 million in cash prizes; in addition, MN Cup alumni have raised over $1 billion in capital.

Updated Resource for Entrepreneurs and their Lawyers

The National Venture Capital Association (NVCA) sets the standards, quite literally, on the forms used by most emerging businesses looking to raise capital. Founded in 1973, the NVCA is a research, advocacy, and professional development network—a non-profit organization supporting the venture capital industry and the various players that make up the community.

First-Time Inventors Receive Boost from U.S. Patent Office

A patent portfolio can be one of the greatest assets that a company owns.

Patented technology provides value to a company that can lead to improved sales, revenue growth, and increased investment. Patents can convey great value and provide many avenues for sustaining and growing business operations. The exclusionary power of the patent right can create a foothold for innovative technology and enable a company to stake out territory that forces competitors to design around the patents, license the technology, or risk being sued for infringement. Patents also provide a basis for continued innovation and expansion through investment in R&D, covering improvements in technology, increasing the zone of exclusivity, influencing the prevailing state of the art, and tapping into new areas. And they provide added cachet in the marketplace: there is an inherent PR benefit to being able to advertise patented technology.