Fort Lauderdale Startup Attorneys & Lawyers

Key Takeaways

• A co-sale right (also called a tag-along right) lets minority shareholders sell their shares alongside a majority shareholder under the same terms and conditions.
• These rights protect small investors from being left behind in a sale and ensure fair treatment when major shareholders sell their shares.
• co-sale provisions are often paired with a right of first refusal (ROFR) clause, which gives current shareholders or the company a chance to buy shares before they are offered to an outside buyer.
• Typical co-sale agreements outline triggers, notice procedures, proportionate sale participation, and exceptions (such as transfers to family or affiliates).

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Key Takeaways

• Seed funding is the first major capital round that helps startups develop a minimum viable product (MVP), attract early customers, and prove market viability.
• To secure funding, startups must demonstrate traction, a clear business model, and a credible founding team.
• A well-prepared pitch deck, financial model, and due diligence documentation are essential for investor confidence.
• Understanding investor expectations, valuation methods, and deal terms can prevent costly equity mistakes.
• Founders should leverage multiple channels—angel investors, accelerators, crowdfunding, and institutional funds—based on their business maturity.

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Key Takeaways

• LLCs and C Corporations differ significantly in tax treatment, ownership structure, and growth potential.
• C Corps may be better for startups seeking investment due to ease of issuing stock and attracting VCs.
• LLCs are easier to manage and more flexible in profit distribution and structure.
• Tax implications vary: LLCs offer pass-through taxation, while C Corps may face double taxation but benefit from reinvestment strategies.
• International business owners may prefer C Corps for credibility and ease of foreign ownership.

LLC Versus C Corp: What Is It?

An LLC is a business entity that is legally separate from its owners, who are known as "members." An LLC can have one member or many members.

A C Corporation refers to any corporation taxed separately from its owners. Unlike S Corporations, taxing of C Corporations occurs twice, once on the earnings and again on the salaries of the owners.

S

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Key Takeaways

• Tag along rights, also known as co-sale rights, protect minority shareholders by allowing them to sell their shares on the same terms as majority shareholders.
• They are commonly included in shareholder or stockholder agreements to ensure fairness during company sales or ownership changes.
• These rights encourage investment by offering minority investors exit opportunities if majority holders sell their stakes.
• Properly drafted clauses should define triggering events, notice requirements, and proportional sale rights to avoid disputes.
• Balancing tag along and drag along rights is essential to prevent conflicts between majority control and minority protectio

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