Entrepreneurship exam 2

Corporations and Non-profits

________ require a board of directors

Online lending

a method of receiving loans through a non-traditional lender (not a bank or credit union). An online lending loan frequently does not require collateral

Design Patent

a patent that offers protection for the way a product looks

Trademark

A type of intellectual property consisting of a recognizable sign, design, or expression that identifies products or services from a particular source and distinguishes them from others. The trademark owner can be an individual, business organization, or any legal entity.

Trade Secrets

A type of intellectual property includes formulas, practices, processes, designs, instruments, or patterns which the owner takes reasonable measures to keep secret

Patent

A type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention.

Community development funds (CDFIs)

loans that are provided to help start local businesses with the intention of creating local jobs

Primary ways to fund a startup

- Bootstrapping - Friends and Family - Banks and Credit Unions - Community Development Funds - Crowdfunding - Online Lending - Angel Investors - Grants - Pitch Competitions - Strategic Partnerships

Types of Intellectual Property

copyrights, trademarks, patents, trade secrets

Strategic Partnership

investments that are made by organizations (typically companies) in exchange for equity in a startup that adds strategic value to the investing company

B-Lab Global

To become a B-Corp the organization needs to be certified by ______

Friends and Family

When bootstrap startups don't have enough funds, they typically ask friends and family for money.

pitch competition

events where entrepreneurs compete for prizes. The prizes are typically either money for funding of the startup or services that can assist the startup like web hosting services.

Lending Crowdfunding

Raising funds in the form of loans with a set interest rate and time frame Ex: Kiva, LendingClub

B Corporation

Similar to a C-corp, it separates legal liability from the owner(s) and profits and losses flow through the company. However, the organization is also certified that it is focused on social and environmental good, provides public transparency and balances profit and purpose.

Banks and Credit Unions

Tend to be risk averse. However, many local banks that are focused on community development will funds startups.

reward crowdfunding

When individuals contribute a certain amount of money to a given project or various projects in return for an expected kind of reward ex: Kickstarter, Indiegogo

donation crowdfunding

When there's no return on investment - typically only for charities or social causes ex: Classmunity, Gofundme

Equity Crowdfunding

a form of crowdfunding that gives investors the opportunity to become shareholders in a company ex: Fundable, AngelList

Copyright

a type of intellectual property that gives the owner the exclusive right to copy and distribute a creative work, usually for a limited time. The creative work may be literary, artistic, educational, or musical form.

non-profit organization

an entity that is organized for the purpose of providing social or public benefit. Any "profit" after operations is put back into the organization. All liability resides on the Non-Profit (there are no owners). Require a board of directors

Limited Liability Company (LLC)

A legal entity type limits legal liability. Profits and losses flow through the owner(s) tax returns.

C Corporation

A legal entity which separates legal liability from the owner(s). Profits and losses flow through the company. A board of directors is required.

Crowdfunding

A method of raising money through the internet to help a business, project or special cause.

Grants

Money that can be provided to startups without giving up any equity or functioning as a loan. Grants are typically provided by institutions seeking to accomplish a mission aligned with the startup's mission.

Business Legal Entity Types

Non-Profit, proprietership/ partnership, llc, c-corp, benefit-corp

S-corp

Not a legal entity but a tax designation. S-corps provide legal entity protection but profits flow through shareholder tax returns. Also require a board of directors.

Legal considerations for the startup

Business legal entity type, intellectual property, contracts, licensing

Angel investors

Individuals or groups of investors that provide funding directly to startups in exchange for equity

proprietorship/ partnership

unincorporated business owned and run by an individual(s). Virtually no legal protection. Profits and losses flow through owners tax return

Utility Patent

unlike a design patent, a utility patent protects a process, not the physical way something is designed.

Bootstrapping

using low-cost or free techniques to minimize your cost of doing business. Use own funds