Startup & Emerging Companies: Legal, Tax & Financial Counsel

Build the company behind the prototype. Raising capital and developing a product create legal, tax, and financial decisions long before the first profitable year. Philip Falco, Attorney & CPA, helps founders connect those decisions: who owns the business, what investors receive, how development costs are recorded, and how much cash remains to reach the next milestone.

ColoradoLegal provides integrated counsel for startups and emerging companies, with the work defined in a written engagement. A founder may need a focused equity review, formation documents, financing support, or ongoing accounting and financial advice. The starting point is the company’s immediate decision and the records needed to make it.

One Plan for Formation, Prototype Development, and Funding

A prototype budget affects runway. A contractor agreement affects ownership of the product. A founder stock issuance can start a tax-election deadline. A proposed investment changes the capitalization table and may affect future grants. Addressing these issues together helps founders see the consequences before signing documents or spending the next round of capital.

• Before forming: identify the owners, expected investors, tax treatment, governance, and ownership of work already completed.
• Before issuing equity: document approvals, purchase terms, vesting, valuation, and any time-sensitive elections.
• While building: organize development contracts, payroll, project costs, cash forecasts, and tax records.
• Before raising: review offering terms, investor communications, dilution, disclosures, and the diligence file.

Startup Legal, Tax, and Financial Services

• Startup Formation & Entity Structure
• Founder Equity, Vesting & 83(b) Elections
• 409A Valuations, Stock Options & Equity Compensation
• SAFE Notes, Convertible Notes & Seed Financing
• Startup Accounting, Financial Reporting & CFO Advisory
• Prototype & Software Development Tax: Sections 174 and 174A

Founder Agreements, Contracts, and Intellectual Property

Agree on responsibilities, ownership, decision-making, departure rights, and the treatment of unfinished work while the founders are aligned. Product-development and consulting contracts should address deliverables, payment, confidentiality, access to source files, and assignment of intellectual property. Paying a developer does not by itself answer every ownership question.

Review existing employer obligations, third-party software licenses, and work created before formation. Hiring also requires a separate look at worker classification and payroll obligations; calling someone a contractor in an agreement does not settle the issue. General corporate and outside-counsel work can be coordinated through business legal services and an appropriately scoped ongoing advisory engagement. Patent prosecution and other specialized matters may require separate counsel.

Prepare for Investor Diligence Before It Becomes Urgent

Keep a consistent record of issued shares, options, SAFEs, notes, approvals, and side letters. Investors should be able to trace the capitalization table to signed documents and the financial reports to accounting records. A useful diligence file also includes tax filings, development agreements, IP assignments, material customer contracts, and an explanation of unresolved risks.

Preparation for institutional financing is a continuing process. Model the effect of outstanding instruments and a possible option-pool increase before agreeing to a headline valuation. Review the financial assumptions behind the proposed use of proceeds and identify the operating milestones the round is intended to fund.

An Attorney-and-CPA Perspective, With a Defined Role

Philip Falco combines legal analysis with accounting and tax work so the engagement can address both the documents and their financial consequences. Fractional-CFO-style advice may include cash forecasting, budgets, management reports, and financing scenarios. An advisory engagement does not appoint him as the company’s CFO, officer, or director. Any formal appointment requires a separate agreement and appropriate corporate action.

The engagement also identifies the client. Representation of the company does not automatically include each founder or investor personally. Separate representation may be appropriate when interests differ. Accounting and return-preparation work is not automatically protected by attorney-client privilege simply because the professional is also an attorney.

Questions Founders Often Ask

Can we start before the company has revenue?

Yes. Formation, ownership, development contracts, recordkeeping, and financing decisions often come first. Bring the current plan and documents, including agreements signed personally before formation.

Do we need a C corporation to raise capital?

Not every business does. Investor eligibility, preferred-stock plans, expected tax results, and conversion costs help determine the structure. Review the startup formation guide before making elections.

Does the consultation include forming the company or closing a round?

No. The consultation is an initial, limited-scope review. Drafting, filings, financing transactions, bookkeeping, and continuing advice require a separate written engagement.

Bring the Decision You Need to Make Next

Useful starting records include the entity documents, ownership table, founder agreements, any term sheet or SAFE, development contracts, recent financial reports, tax returns, and a rough cash budget. Identify deadlines and whether equity has already been transferred. For broader entity taxation, see LLC, partnership, and corporate tax resources.