In this episode of Immigration Law for Tech Startups, I’m thrilled to be joined by my trusted colleague and longtime friend Lindsey Mignano, founding partner of Smith Shapourian Mignano, a corporate law firm based in San Francisco that focuses on startups. We often assist each other’s startup clients with corporate structuring and immigration matters.
Today, Lindsey shares her vast expertise in establishing and structuring startups and her insights on industry trends and the best strategies for raising funds, taking on investors, and growing a startup.
Lindsey says investment activity is returning after coming to a screeching halt during the early weeks of the COVID-19 pandemic. She cited a recent study by First Republic Bank that found that 70% of investors are growing more comfortable deploying Series A or larger investments without an in-person meeting. This greater flexibility among venture capitalists also signals greater comfort with remote founders. Previously, investors would require an in-person meeting, as well as require the founding team to immigrate to the U.S. as a condition for funding. But with COVID-19 and given that working remotely has gone well since March, investors are becoming “location-agnostic,” Lindsey says.
Although investment activity has resumed, Lindsey points out that smaller pre-seed and seed funds are expected to do fewer deals this year, and larger funds are contracting slightly in this tough economy. Based on her firm’s clients, “we’ve found that those startups that can afford to bootstrap are taking the time to do that now because the practical reality is that COVID is throwing their business metrics and milestones off,” she says. “So, they’re taking time to regroup, reorganize, figure out how they can meet milestones before presenting new data to potential investors. I would say that’s wise, not only because of the COVID-19 world we’re living in, but because this is an acquirer-friendly, investor-friendly negotiating environment. It’s not a startup-friendly financing environment”
Lindsey also pointed to a memo that Sequoia Capital sent to its founders and CEOs during the early days of COVID-19 before shelter-in-place became a reality that all startup founders should use as a guide to ensure the health of their business.
Please share this episode with any startup founders or entrepreneurs who can benefit from it. Reach out to us if we can help you determine your immigration options whether you’re in the U.S. or abroad.
In this episode, you’ll hear about:
- The best practices for structuring and forming your startup—and where—to attract U.S. investors whether you’re in the U.S. or abroad
- The difference between a Delaware C corp and a Delaware S corp
- What a Delaware flip is
- The best place to establish your startup
- How long and how much it will typically cost to establish your startup in the U.S.
- How pre-seed, Avocado seed, seed, and Series A funding is defined in the U.S.
- Why you should specify the investment in dollars that your startup is seeking
- Funding trends that have developed during the COVID-19 pandemic
- The best practices for structuring a startup if a co-founder is on an H-1B visa
- How salaries for founders and top executives should figure into fundraising
- The difference between a safe note and a price round
- The best strategies for raising capital, getting the best deals—and closing them quickly
- When do investors expect a seat on the board of your startup
- Rookie mistakes to avoid when working with venture capitalists and other investors
- What startup founders need to know about California wage and hour laws
Don’t miss my upcoming conversations with other top Silicon Valley venture capitalists, startup founders, professors, futurists, and thought leaders on Immigration Law for Tech Startups. Subscribe to this podcast on Apple Podcasts, Google Podcasts, Spotify, Stitcher, or whatever your favorite platform is. Please rate and review this podcast. Thank you!
Top 5 Business & Immigration Tips for Global Founders handout
Sequoia Capital’s Black Swan memo from March 5, 2020
Immigration Law for Tech Startups:
- Episode 3: The Different Types of Nonimmigrant Visas
- Episode 11: Your Startup’s First H-1B
- Episode 14: Visas & Green Cards Based on Past Accomplishments
- Episode 15: Extraordinary Ability Bootcamp
- Episode 16: E-2 Visa for Founders and Employees
- Episode 31: H-1B Nitty Gritty #2: H-1B Transfer for Startup Founders
Alcorn Immigration Law’s page on:
- H-1B Visa for Specialty Occupations
- O-1A Visa for Extraordinary Ability
- EB-1A Extraordinary Ability Green Card
- EB-2 NIW (Exceptional Ability with National Interest Waiver)
Register for Alcorn’s Extraordinary Ability Bootcamp to learn the best practices for securing the O-1A visa, EB-1A green card, or the EB-2 NIW (National Interest Waiver) green card—the top options for startup founders. Use promotion code ILTS for 20% off the enrollment fee.
Get Alcorn’s Immigration Law for Tech Startups eBook