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Entrepreneurship in Entertainment Technology

Entrepreneurship in Entertainment Technology. Welcome!. Today’s Agenda. Company Structure Stock Hacks. Company Structure. Why Bother?. Define Control Distribute Rewards Minimize Risk Pay Taxes. Individual. Corporation. You as an Individual. Own Property. Pay Taxes. Held Liable.

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Entrepreneurship in Entertainment Technology

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  1. Entrepreneurship in Entertainment Technology Welcome!

  2. Today’s Agenda • Company Structure • Stock Hacks

  3. CompanyStructure

  4. Why Bother? • Define Control • Distribute Rewards • Minimize Risk • Pay Taxes

  5. Individual Corporation

  6. You as an Individual Own Property. Pay Taxes. Held Liable. Your Own Boss. Sole Proprietorship C Corporation

  7. You as Individuals Individually: Own Property. Pay Taxes. Held Liable. Agree on Responsibilities and Some Liabilities. Sole Proprietorship C Corporation Partnership

  8. Distinct Legal Entity Owns Property. Pays Taxes. Held Liable. Owned by Shareholders. Managed by Board of Directors. Sole Proprietorship C Corporation Partnership

  9. Sole Proprietorship C Corporation Partnership

  10. Why not always be a Corporation?

  11. Personal taxes Taxes Personal Income 35% After Tax $ 65%

  12. Corporate taxes Taxes Corporate Profits 35% After Tax $ 65%

  13. Double taxation Taxes Corporate Profits 35% Taxes After Tax $ Personal Income 35% Dividend After Tax $ 43% 65%

  14. Tax Benefits Liability Protection Sole Proprietorship C Corporation Partnership

  15. Tax Friendly Entities Sole Proprietorship C Corporation S Corp Partnership LLC

  16. Distinct Legal Entity Owns Property. Held Liable. Owned by Shareholders*. Managed by Board of Directors. Passes Income Through to Shareholders. Sole Proprietorship C Corporation S Corp Partnership LLC * with specific limitations

  17. Distinct Legal Entity Owns Property. Held Liable. Owned by Members. Members Set The Rules. Sole Proprietorship C Corporation S Corp Partnership LLC

  18. Company Structure Sole Proprietorship C Corporation S Corp Partnership LLC

  19. Evil Powerpoint alert!

  20. Summary

  21. One more thing… • Best chance to define everyone’s role • and worst case scenarios. • Do it.

  22. Stock Hacks

  23. Stock Hacks • Valuation • Stock Options • Vesting • Classes of Stock • Liquidity

  24. Valuation • Value of Company • = $ / share • Shares Outstanding

  25. Stock Options • Promise of Future Purchase at Today’s Price

  26. Vesting

  27. Classes of stock • Common • Restricted • Preferred

  28. Liquidity • Private vs. Public

  29. Next Class

  30. Resources

  31. Resources • Company Structure • A good corporate lawyer! • http://www.bizfilings.com/learn/llc-vs-s-corp.aspx - a lite overview of LLC vs. S Corp tradeoffs • VC and Funding – Fred Wilson • www.avc.com – blog of Fred Wilson, VC • http://www.avc.com/a_vc/mba-mondays/ - subset of his posts dealing with business • @fredwilson - follow him on Twitter

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