A privacy policy is the customer-facing legal document disclosing how a company collects, uses, shares, stores, and protects user data. It is legally required in most jurisdictions (US state laws like CCPA require it; GDPR in Europe requires comprehensive disclosure; many other jurisdictions have similar requirements) and operationally critical for user trust. It is one of the legal documents most-often outdated or generic at startups despite being prominently linked from every website and product. It is the document that tells users what you do with their data.
The standard sections:
Types of data collected:
A secondary sale is a transaction where existing shareholders sell their shares to new or existing investors without the company itself raising new capital. Also called a secondary transaction, it covers founders, employees, and early investors and provides partial liquidity pre-exit while resetting the cap table without a financing event. It is distinct from a primary sale (where new shares are issued and the company receives the capital) and has become an increasingly common, sometimes-essential liquidity path for startups staying private longer.
The major secondary structures: founder secondaries (founders sell a portion of their stake, usually capped at 5 to 15 percent of holdings, common at Series B and beyond when compa...
An initial public offering (IPO) is the process of selling shares of a private company to the public for the first time. Listed on NYSE, Nasdaq, or international equivalents, an IPO is traditionally the marquee exit path for venture-backed companies, with investment-bank underwriters pricing the offering, allocating shares to institutional buyers, and the company raising primary capital in the process. It is also one of the rarest exit outcomes statistically, despite getting the bulk of the press coverage.
The standard process runs roughly: file a confidential S-1 with the SEC, respond to SEC comments through 2 to 4 rounds, conduct a [Roadshow] where executives pitch institutional investors over 1 to 2 weeks, price the offering the nigh...
An angel group is an organized network of individual angel investors who pool resources, share deal flow, and often invest collectively in startups. Members conduct joint due diligence and invest through individual checks or through a pooled SPV (Special Purpose Vehicle), providing institutional-quality process and a larger collective check size without the institutional structure of a venture capital fund. Angel groups bridge the gap between solo angel investing and formal VC firms, particularly active at the pre-seed and seed stages.
The major US angel groups: Tech Coast Angels (Southern California, one of the largest by member count), Keiretsu Forum (global network with chapters across the US, Europe, and Asia), Houston Angel...
Authorized shares is the maximum number of shares a corporation is legally permitted to issue under its certificate of incorporation. The ceiling is set at incorporation and amendable only through a charter amendment requiring board and stockholder approval, with standard practice being to authorize well above current issuance to provide headroom for future financings, option grants, and corporate transactions. It is the legal ceiling on share issuance, distinct from issued shares (actually issued) and outstanding shares (issued and not repurchased).
The structural layers of share counts:
An S Corporation is a US federal tax election that allows a domestic corporation or LLC to pass profits and losses through to shareholders. Named after Subchapter S of the Internal Revenue Code, the election is not a separate entity type but a tax classification that avoids the double taxation C-corporations face. S-corp status is subject to restrictions on shareholder type, count (100 maximum), and stock structure (one class only) that make it largely incompatible with venture-backed startups. It is a popular structure for small businesses with US-citizen owners and incompatible with the cap-table realities of most institutional fundraising.
The restrictions that disqualify most venture-track startups: maximum 100 shareholder...
A stock split is a corporate action that increases the number of outstanding shares by a defined ratio while proportionally reducing per-share value. A 10-for-1 split converts each $1 share into ten $0.10 shares, maintaining the same total market capitalization and ownership percentages, used at private startups to increase share counts before significant grants and at public companies historically to manage share price into a target trading range. It is an economically neutral action at the company level but has real practical impact on how the cap table looks, how share grants are sized, and how the stock is perceived by various stakeholders.
The mechanic of a stock split:
A vesting cliff is the minimum time period a person must remain with a company before any granted equity vests. Leaving before the cliff date forfeits the entire grant. The startup standard is a one-year cliff inside a four-year vesting schedule, applied to both employees and founders, and built into virtually every cap-table-tool default (Carta, Pulley, AngelList Equity).
In practice, the one-year cliff works as a binary test. An employee granted 48,000 options on a four-year monthly schedule vests zero options for the first 365 days. On day 366, exactly 12,000 options (25% of the grant) vest at once. From then on, the remaining 36,000 vest at 1,000 per month for three years. The cliff exists to protect the company and the ca...
A trade secret is confidential business information that derives economic value from secrecy and is subject to reasonable efforts to maintain that secrecy. Covered information includes formulas, processes, algorithms, customer lists, source code, manufacturing techniques, pricing strategies, internal documentation, and training methods. Trade secrets are protected under federal law via the Defend Trade Secrets Act of 2016 and under state law in essentially all 50 states, with protection lasting indefinitely as long as the secret remains secret. It is the IP category that protects much of what software companies create, and the protection most-overlooked by founders who assume their IP is automatically covered by some other cate...
A vendor contract is the binding legal agreement between a startup as buyer and a third-party supplier (vendor, contractor, or service provider). The contract covers the services or products provided, fees and payment terms, data handling and security, IP ownership (especially for work product), indemnification, limitation of liability, and termination. It is the contract category that quietly accumulates the fastest as a startup scales, and it is the one founders pay the least attention to until something goes wrong.
The categories that matter: infrastructure and cloud (AWS, GCP, Azure, Cloudflare, Vercel; typically click-through ToS with separate Enterprise Agreements at $250K+ annual spend); payments and money movement (S...