In this dynamic episode, we have an in-depth discussion with Scott
from Latham & Watkins
, exploring the nuances of establishing and nurturing high-growth companies in the oil and gas sector. From initial decisions to potential challenges, the conversation offers essential insights into the world of oil and gas startups.
- Importance of Early Legal Decisions: We delve into the crucial initial choices, such as setting up as an LLC or Delaware C Corp, and their implications on matters like Qualified Small Business Stock (QSBS) and capital gains tax.
- The 83b Filing: Scott explains the need for timely filing of an 83b to prevent tax complications, also pointing out the advantages of a fixed fee attorney for startups.
- Equity Distribution: A detailed discussion on equity division, especially concerning employees, and the dangers of over-distribution in the early stages of the business.
- Use of RSUs: We take a look at the complexities of using Restricted Stock Units (RSUs) as a motivation for employees, with a case study of Facebook and other Silicon Valley companies.
- Impact of External Investment: The conversation shifts to the effects of external funding, from the introduction of board meetings to changes in operating style post-investment.
- Exit Process Realities: Scott provides a clearer picture of the exit process, focusing on venture capital return profiles, exit timelines, and the role of dealmakers.
- Going Public: We discuss the challenges of taking a company public and the importance of early preparation.