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Denver Business and Commercial Law Blog

How startups obtain large capital investments

Generally speaking, startups are more likely to get funding if they have a proven product or service. They are also more likely to stand out if they have a rapid growth rate. However, these are not the only attributes that new and emerging Colorado companies must have to obtain financing. For instance, they must be able to show how their product or service will be faring in five or 10 years.

Furthermore, a startup should be able to show that it has the ability to generate at least $100 million in revenue. Ideally, a company will be in an industry or niche sector that doesn't have a lot of competition. However, the presence of competing companies doesn't necessarily mean a startup can't get funding at a significant level. The credentials of the business owner or management team can also play a role in whether a venture capital firm chooses to invest in a startup.

USPTO warns of unauthorized trademark file changes

People and businesses in Colorado may be concerned about an alert issued by the U.S. Patent and Trademark Office (USPTO) on Oct. 19. The agency sent a message warning about a scam that aims to hijack trademark files for their use in third-party brand registries. This scheme was discovered after multiple trademark holders found that there had been changes to their files at the USPTO that they did not authorize. The changes affected both applications and completed registrations.

While the USPTO said that only a small portion of the total number of files the office maintains had been affected, they warned all registrants to check their files in order to ensure that their accounts were not breached. The USPTO said that the forms had been filed through the Trademark Electronic Application System (TEAS) without the consent of the actual rights holders.

What to include in a business plan

When creating a company in Colorado, an entrepreneur will ideally create a business plan. This plan should address key issues such as what the company will provide, how it will be funded and how it will grow its revenue over time. Prior to writing a business plan, it is a good idea to spend time researching the industry and talking to potential customers. Doing so can help a business owner gain the knowledge needed to be successful.

The plan should tell the story of why the company was created and what its purpose is. It should also help to outline future goals and expectations and how they will be met. Ideally, the plan will be tailored to pique the interest of future investors if the business plans on trying to attract outside capital. Otherwise, it can simply be a proactive way to consider and solve problems before they arise.

Colorado trucking company faces disability discrimination lawsuit

Individuals with disabilities can have a harder time applying for jobs that require a certain amount of physicality to them. However, regardless of their condition, they deserve a fair shot of applying for the position and going through the same procedures as everyone else. If employers fail to allow this, they are in violation of the Americans with Disabilities Act.

A trucking company in Greely has recently come into the spotlight due to a lawsuit filed by the Equal Employment Opportunity Commission (EEOC) in the U.S. District Court in Denver. The federal agency accuses JBS Carriers of filtering out disabled applicants during their hiring process.

Merging businesses to maximize value

Colorado businesses may want to learn more about how they can maximize their profits and value by pursuing acquisitions. Buying another successful business can be a major mechanism for companies to boost their intellectual property profiles and integrate similar systems in order to increase profits and leadership in a specific sector. In order to make a merger successful, however, it is important to bring the two companies together in a way that reduces inefficiency and maximizes value.

Going through a merger or acquisition is a multi-step process. In general, companies begin by performing due diligence research into the other business. By thoroughly investigating the other company, they can learn more about its finances, structure and the value of its intellectual property. This process allows a company to put a correct valuation on the other business and propose terms for an agreement. During the agreement phase of a merger, the companies negotiate on a range of issues. While sale price may seem the most obvious, the agreement can also include terms about management structure, personnel decisions and how the two companies' systems will be integrated.

Tips for getting an SBA loan

Many entrepreneurs in Colorado depend on small business loans. The U.S. Small Business Administration guarantees loans that small businesses can in turn get from lenders. This guarantee, along with guidelines created by the SBA, makes the loan process less risky for lenders.

However, there are a few general requirements to be eligible for such a loan. For example, there must be equity invested in the business, and it must be operating within the United States or its territories. Business owners can also take several steps to best prepare for the loan application process. Having several years of financial statements on hand can be helpful. Business owners need to have a clear picture of their goals and needs because there are different types of loans with different benefits. Some of those benefits may include no collateral.

Tax liens make financing harder

Debt is part of operating a business. Lines of credit and loans are often necessary to purchase inventory or make other required payments. If debts go unpaid, though, they can hinder the business's ability to operate. Colorado businesses that fall behind on tax payments to the government may have tax liens entered against them. Tax liens get paid before obligations to other creditors.

Tax liens can make it more difficult to secure financing as creditors know that they'll be second in line at best when it comes to getting paid back. A tax lien sends a message to lenders that the business or the business owner is unwilling or unable to pay back debts. It won't have an impact on a person's credit score, but it will still make it harder to get loans.

Why due diligence with venture capital is important

Some Colorado business owners who are seeking funding may be so relieved at receiving term sheets from an investor that they fail to do further due diligence. However, researching the venture capitalist ahead of time can give an entrepreneur an idea of how reliable an investment offer may be.

This was a lesson learned by one CEO. He had been contacted by a growth equity venture capital fund in regards to the needs of his growing company, and not long after, the fund submitted a term sheet. The CEO was pleased with the relative ease with which the financing had been secured since the fund had pledged half of what was needed. The plan was to get 25 percent from other investors and then secure a manageable 25 percent for the remainder.

The first 100 days of a business acquisition

When a Colorado business looks to make a change and boost their profits through mergers and acquisitions, they may realize why advance planning can be so critical to success. In up to 80 percent of business mergers, predicted value increases do not live up to initial expectations. Sometimes, this could be due to unknown facts about the company that was acquired, but in many cases, these problems can be attributed to a lack of preparation on the part of the company leading the merger. Businesses seeking to integrate an acquisition should start their planning for the process long before the deal is completed, while they are continuing the due diligence steps before a contract is signed.

Experts note that the first 100 days of a merger can be a critical time to judge the potential of success. While this may seem like an extremely quick time frame, businesses can accomplish a great deal in their first three months after a merger so long as they are prepared. Companies should expect to see their value grow during that period. When positive results are not realized shortly after a deal, it may not take long for stagnation to set in.

Muslim workplace discrimination rises in Colorado

Despite how long the Colorado Anti-Discrimination Act has been present, many employers continue to commit discriminatory behavior towards workers of different genders, ages, races and religions. Religion has become a particularly touchy subject because some workers use their beliefs to potentially justify their actions against someone with a different creed or sexual orientation.

One religious group that has certainly not been exempt from unfair treatment are the Muslims. There have been multiple reports in the last decade of employers not adhering to their religious practices or associating them with terrorists. Unfortunately, Colorado has seen an increase in this toxic behavior in the last decade and has denied them working privileges solely based on their religious beliefs. It is important for Muslim workers to be aware of this rise in behavior and what they can do in response.