This is a nice piece and Connie Bagley is a gifted lawyer and teacher who has for years now published a good legal guide for entrepreneurs along with Craig Dauchy of Cooley (we also had worked together at the same Big Law firm in the early 1980s).
A few observations:
1. Founders are much more aware of 83(b) elections today than they were in 2003 when this piece was done and failure to file these on time is much less a problem today than it was then.
2. The biggest problem by far among early-stage founders that is not mentioned here is failure to assign IP into the company at the time of formation when shares are issued. This is commonly overlooked when founders take a do-it-yourself approach. Normally, it is easily cleaned up but, in cases where disputes have arisen, it is a painful and expensive problem to deal with.
3. I would add as well trying to "do it yourself" without even consulting with a good lawyer to get strategic guidance. This can lead to problems that are easily avoided at small cost by consulting up-front with a lawyer, even if you intend to defer hiring a firm in the earliest stages (see, e.g., for an example of what can go wrong as a founder candidly discusses why "incorporating my startup [in Delaware] was my worst mistake": http://news.ycombinator.com/item?id=2399139).
As a point of comparison, here is a link to a similar list (equally good) done by Scott Walker and posted on HN a while back: http://news.ycombinator.com/item?id=1418300 (as to which I made a detailed comment touching on LLCs, Delaware, vesting, and tax).
In general, founders are much more savvy about legal startup issues today than when this piece was written but it is always helpful to review the major issues as a double-check when starting.
A few observations:
1. Founders are much more aware of 83(b) elections today than they were in 2003 when this piece was done and failure to file these on time is much less a problem today than it was then.
2. The biggest problem by far among early-stage founders that is not mentioned here is failure to assign IP into the company at the time of formation when shares are issued. This is commonly overlooked when founders take a do-it-yourself approach. Normally, it is easily cleaned up but, in cases where disputes have arisen, it is a painful and expensive problem to deal with.
3. I would add as well trying to "do it yourself" without even consulting with a good lawyer to get strategic guidance. This can lead to problems that are easily avoided at small cost by consulting up-front with a lawyer, even if you intend to defer hiring a firm in the earliest stages (see, e.g., for an example of what can go wrong as a founder candidly discusses why "incorporating my startup [in Delaware] was my worst mistake": http://news.ycombinator.com/item?id=2399139).
As a point of comparison, here is a link to a similar list (equally good) done by Scott Walker and posted on HN a while back: http://news.ycombinator.com/item?id=1418300 (as to which I made a detailed comment touching on LLCs, Delaware, vesting, and tax).
In general, founders are much more savvy about legal startup issues today than when this piece was written but it is always helpful to review the major issues as a double-check when starting.