Is the grass always… Oranger?: A DAY IN THE SYRACUSE STARTUP SCENE

Written by Colligan Law on . Posted in Articles, News

By Matthew K. Pelkey

Upstate’s startup ecosystem is booming. Our office is based in Buffalo, NY, but I recently had the pleasure of touring Syracuse’s startup scene and met with Nasir Ali from Upstate Venture Connect and Seed Capital Fund of CNY. I started the day with lunch in the beautiful and historic Armory Square, followed by tours of co-working spaces, stopped in to chat with the folks at Genius NY, had coffee with some finance professionals, and ate dinner at the newly renovated Syracuse Hotel—a renovation which rivals that of one of Buffalo’s most symbolic retreats, the Hotel Lafayette. Suffice it to say, it was a busy day, with so much to see in Syracuse, much of which mirrors similar developments being made in Buffalo and throughout Upstate.

Lobby of the Hotel Syracuse

Syracuse has its challenges, and in many ways, cities like Buffalo are far better-positioned to ensure sustainable growth for our future generations. I firmly believe that every community in Upstate New York can—and should—learn from one another to create a thriving, regional ecosystem. After all, while each community is unique, we all face similar challenges and legacies, from a thriving manufacturing past, now relegated to memories and inspiration. Here are a few takeaways that we can all learn from across Upstate New York’s startup ecosystem.

UberPITCH

Written by Colligan Law on . Posted in Articles, News

By Rob Townsley

I work in a firm that usually provides legal services for startups and entrepreneurs, but pitching my own business idea in the UberPITCH startup competition last month was something I couldn’t pass up. UberPITCH, was a hybrid of the shows Shark Tank and CashCab. Call an Uber, and instead of a driver, a venture capitalist (VC) is delivered to your doorstep, and I had seven minutes to pitch my startup. The grand prize was five thousand dollars cash! And it was the first time Uber was in Buffalo, through a partnership with 43North.

After practicing my pitch in the morning and running it by a few colleagues at Colligan Law, I was ready to request my Uber and try to win $5,000! I opened the app and discovered that all the UberPITCH vehicles were in use and I would have to wait a while for my ride to arrive. It was a testament to the popularity of the mini startup competition, and also made me look forward to the day when the Uber is operating and available in Buffalo, with minimal wait times.

Critical Path Life Sciences Accelerator Program

Written by Colligan Law on . Posted in Articles, News

By David J. Colligan

The First Annual Critical Path Life Sciences Accelerator Program sponsored concluded Thursday, January 12, 2017.  As part of the final preparation of the eight startup companies who participated until the end of the program, a panel of investors was assembled to present their experiences as investors in various roles.  David Colligan of the Colligan Law Firm was selected to present his experiences as a lawyer for investors, both Angel and Venture Capital, as well as a lawyer for many startups.  Kevin Centofanti, president of Brooks Houghton Investment Bank, was selected based on his ability to assemble large pools of capital to finance rapidly growing startup companies.  Theresa Mazullo of Excell Partners was selected as Excell Partners runs several different venture capital funds that have many startup companies in their portfolios.  Lindsay Stencel of Launch NY was selected as she is a general partner of a venture fund in Columbus, Ohio and serves part-time as the seed fund manager for Launch NY here in Buffalo, New York.  Sharon Weinberg was on the panel representing Empire State Development’s new $10,000,000 fund to support entrepreneurs with actual funding.  Alex Zapesochny was on the panel because of his successful co-founding of Icardiac and other successful startups before that which had a successful run from startup to exit.

Court Ruling Ensures There’s No Turning Back on Scajaquada Traffic-Calming Measures

Written by Colligan Law on . Posted in Articles, News

By Matthew K. Pelkey

On Wednesday, the New York State Department of Transportation will hold what is likely its final public meeting on design changes to the Scajaquada Expressway – a project that has no doubt garnered controversy and heated discussions between officials and community stakeholders. But those pushing for further traffic calming measures may have just gotten a little help from the New York State Court of Appeals.

Turturro v. City of New York (December 2016) is a case involving a 12-year-old boy who was seriously injured when he was struck by a speeding car while riding his bicycle on Gerritsen Avenue in Brooklyn. Gerritsen was a 30-mph, four-lane roadway bordered by parkland. New York City officials had received many complaints about speeding but recommended additional police enforcement instead of traffic calming – a decision that ultimately resulted in New York City being held liable for the child’s injuries.

What is important about this case is the shift from simply relying on police enforcement to curb traffic and speeding problems, to now placing an affirmative duty on municipalities to study and implement traffic calming. If a government agency is aware of a dangerous condition and fails to study or implement traffic-calming measures, it may now be liable for resulting damages and injuries. Whether our state’s highest court realizes it or not, it may have just ushered in a new era of transportation design and put an end to prioritizing automobiles over people.

This shift in duty has the potential to fundamentally alter the DOT’s current design plans for the Scajaquada. It also likely ensures that the speed limit remains at 30 mph.

Why Do Cap Tables Kill Startup Companies?

Written by Colligan Law on . Posted in Articles, News

By  John A. Moscati, Jr. and David J. Colligan

As lawyers practicing in the startup space, our clients often come to us with less than perfect cap tables.  Some don’t even know what a cap table is.  A cap table is a spread sheet that shows the ownership of the company by class of owner, timing of investment and various rights held by owners of the capital stock of the company.  To an experienced investor, a cap table tells the story of the company.  Like all stories, it has a beginning, middle and end.  By reading a cap table and asking questions based on its content, an investor can see when the company started, who the founders were, when significant pivots occurred, how much capital has been raised, and when.  Unfortunately for many entrepreneurs, they have written the story of their companies by issuing equity and granting various rights to founders, friends, family, and early investors, without an appreciation of how potential future investors will “read” this story.

If a startup wants to create a cap table spreadsheet, we advise them to identify shareholder groups by class (i.e., founders, angel investors, friends and family, etc.); and to include number and class of shareholders or shares or units issued followed by percent of outstanding, and if applicable, percentage of ownership fully diluted.  Where applicable, footnotes should disclose any conversion right or other preferences and any options, warrants, option pools or other rights to acquire equity should be disclosed (and included in the “fully diluted” calculations).

New Overtime Rules – December 1, 2016

Written by Colligan Law on . Posted in Articles, News

By Joseph F. Saeli, Jr.

We would like to remind our clients and friends that the new U.S. Department of Labor rules for determining whether employees are exempt employees take effect on December 1, 2016. If an employee is not exempt, they must be paid one and one half times their normal hourly rate for all hours worked above forty in a week.

The key parts of the new rules are:

  • Exempt employees must be paid an annual salary of at least $47,476. (The current requirement in New York State for exempt executives and administrative employees in $35,100).
  • The new minimum salary for Highly Compensated Employees is $134,004.
  • Employers may use non-discretionary bonuses and incentive payments to satisfy up to 10% of the salary level. (This was not previously permitted).
  • The salary levels will be automatically updated every three years.
  • There is no change in the job duties tests for the exempt categories.

In addition to meeting these salary tests, exempt employees must also meet the job duties tests for one of the three exempt categories, professional, executive or administrative. Also, they must be salaried. An hourly employee can never be exempt.

If you have employees who are currently exempt, but do not meet the new salary requirements, you are faced with a difficult decision. The options some employers are considering include the following:

  • Change the employee’s status to hourly, and pay overtime for all hours over forty in a week.
  • Change the employee’s status to non-exempt salaried, and pay overtime for all hours over forty in a week. (This is possible, but the hourly rate calculation for determining overtime pay can be complicated).
  • Increase the employee’s salary to meet the new requirements.

Please let us know if we can assist you in complying with these new rules.

This article is meant to convey general information, and not to provide any legal advice. Legal advice should be provided only by an attorney who is familiar with all the circumstances about which advice is requested.

 

New Department of Labor rule could mean more money in your paycheck

 

The Laws of LinkedIn in the Workplace

Written by Colligan Law on . Posted in Articles, News

By Erin M. Gormley

In a culture where viewing someone’s social media profile can serve as the modern equivalent to an in-person networking opportunity, it is crucial to be hyperaware of our online personas. And with public perception at the forefront of everyday life and business, our sense of ownership over social media channels and accounts can often be distorted. How much control do we have over our web presence, specifically on LinkedIn?

LinkedIn is an invaluable tool for networking and exploring employment opportunities. But what happens when the ownership and responsibility of a LinkedIn account becomes unclear? Say for example, an employee builds contacts using their employer’s company email address, and then no longer works for the company.

Generally, the presumption is that the individual portrayed on a LinkedIn profile owns the account, and therefore has discretion – regarding profile content and who has access. However, that is not always the case. A look at the recent case law shows that the following factors have been labeled as important in determining what rights ex-employees, and their former employers, have to the LinkedIn accounts that they access and maintain:

Creation of the Account

It is important to be aware of what the status of the account was: (1) prior to the start of the employee’s employment, (2) during their employment, and (3) after the termination of their employment. Factors to be considered are whether or not the employee already had the LinkedIn account prior to beginning the term of their employment, whether or not the creation of the account was a condition of their employment, and who created and provided content for the account – the employee or employer. If the employee inherited an account from the previous holder of their position, or otherwise received access to an account that was created by the employer as a condition of the employee’s employment, it weighs toward a finding that the employer is the owner of the account.

Department of Labor Announces New Overtime Rules

Written by Colligan Law on . Posted in Articles, News

By Joseph F. Saeli, Jr.

The U. S. Department of Labor recently announced new rules for determining whether employees are exempt employees. If an employee is not exempt, they must be paid one and one half times their normal hourly rate for all hours worked above forty in a week.

The key parts of the new rules are:

  • Exempt employees must be paid an annual salary of at least $47,476. (The current requirement in New York State for exempt executive and administrative employees is $35,100).
  • The new minimum salary for Highly Compensated Employees is $134,004.
  • Employers may use non-discretionary bonuses and incentive payments to satisfy up to 10% of the salary level.  (This was not previously permitted).
  • The salary levels will be automatically updated every three years.
  • There is no change in the job duties tests for the exempt categories.
  • The new rules are effective December 1, 2016.

In addition to meeting these salary tests, exempt employees must also meet the job duties tests for one of the three exempt categories, professional, executive or administrative. Also, they must be salaried. An hourly employee can never be exempt.

If you have employees who are currently exempt, but do not meet the new salary requirements, you are are faced with a difficult decision. The options some employers are considering include the following:

  • Change the employee’s status to hourly, and pay overtime for all hours over forty in a week.
  • Change the employee’s status to non-exempt salaried, and pay overtime for all hours over forty in a week. (This is possible, but the hourly rate calculation for determining overtime pay can be complicated.)
  • Increase the employee’s salary to meet the new requirements.

Please let me know if I can assist you in complying with these new rules.

This article is meant to convey general information, and not to provide any legal advice.  Legal advice should be provided only by an attorney who is familiar with all the circumstances about which advice is requested.

New Year’s is the Time for Corporate Resolutions as Well!

Written by Colligan Law on . Posted in Articles, News

By John A. Moscati, Jr.

Lose weight, exercise more, spend more time with my family . . . making and breaking New Year’s resolutions is all the rage this time of year.  When it comes down to it, most resolutions revolve around trying to establish good habits, or break bad habits.  Why not use the New Year as an opportunity to establish some good and break some bad business habits as well!

Here are five “New Year’s Resolutions” that we suggest you consider adopting for your business as you head into 2015:

 

  1. We Will Keep Our Minute Book Up to Date.  All corporations, and most LLCs should have regular meetings of their governing board.  Minutes of these meetings (or written consents, where meetings are not held) should be recorded in the business’ minute book.  At a minimum, one meeting a year is recommended for most businesses, with additional meetings (or action by written consents) when significant issues arise.  January is a perfect time to update your minute book to catch up on decisions that were made during the prior year that might qualify as being “outside the ordinary course of business.”  This can include things like bonuses, executive compensation, entering into new leases, equipment purchases, etc.  Having these items formally approved by your governing board shows that your business is “respecting the corporate formalities” which can be a key issue in protecting officers and directors from potential personal liability.

 

  1. We Will Schedule and Hold an Annual Meeting of Shareholders or Members.  Most corporations and LLCs are required to hold an annual meeting of their shareholders or members.  Many fail to do so.  This can result in shareholder dissatisfaction and a lack of confidence in management.  Ultimately, if shareholder meetings go unheld for too long, it can expose the business or individual managers to liability.  Holding an annual meeting does not need to be a confrontational exercise.  Generally, it is an opportunity for management to tell shareholders or members how the business performed in the prior year, keep them informed about plans for the coming year and have the shareholders vote to re-elect the Board of Directors or managers.  The election of the board is generally the only real business item on the agenda at the annual meeting.

 

  1. We Will Update Our Buy-Sell Valuation.  Many businesses have Buy-Sell Agreements among the owners which call for the value of the business to be agreed upon annually, or uses a formula to determine the value of the company.  As tax returns and financial statements are being completed, it is a good time to look at your Buy-Sell Agreement and verify that any agreed upon value or valuation formula in the Agreement still works for the business.

 

  1. We Will Put Commission and Bonus Agreements in Writing.  Many states, including New York, require that employers enter into a written agreement with any employee who is paid on commission.  Failing to have a written agreement can result in a presumption that the employees’ recollection of the commission structure is the correct one.  This can result in significant expense when a dispute arises.  Commission agreements do not need to be complicated, they just need to get done!

 

  1. We Will Update Our Employment File, Notices and Posters.  Both state and federal employment laws require the posting of certain notices in the workplace.  Similarly, there are rules requiring that written notice of compensation be provided to employees on an annual basis.  Finally, all employers are required to maintain up-to-date employment documentation for their employers.  The start of a new year is a good time to make sure you are in compliance with these rules.  Many payroll services will assist you in maintaining compliance if you ask.

 

Happy New Year and good luck keeping your 2015 New Year’s business resolutions!