The Katz Law Firm announced last week that it will dedicate resources to help entrepreneurs and startup companies in Southeast Michigan. The firm’s Structured Fee Engagement is aimed at early stage startup companies with innovative ideas and promising business plans.
The Structured Fee Engagement program defers a significant portion of a startup’s legal, compliance and tax planning expenses until the enterprise is viable, which can provide a needed boost for those companies in need of more complex legal and structural requirements and anticipating a funding event, such as crowd funding, angel investor or a venture capital round. Under the program, qualifying expenses are deferred until a future funding event occurs, which is usually in the form of convertible debt or equity financing that meets a valuation target based on the start-up company’s business plan, market strategy and the services needed.
“We don’t require an equity stake or charge some nebulous ‘success fee’ like other firms might,” says Don Katz, the firm’s managing partner. “We simply defer a portion of our fees to help cash flow at the company’s most critical stage of development, which increases the chances for success. This is good for our client, good for our community, and ultimately our firm.”
The Katz Law Firm operates under the philosophy that the beginning stage of a business is unique in many respects. The careful formation and critical tax planning may not seem important at the beginning to most but it can have significant impact at a funding event.
Katz says that often a startup will have a great idea or product but lack the cash flow to properly structure or tax plan. This can have significant negative tax or valuation consequences when a funding or liquidity event occurs.
The Katz Firm’s Structured Fee Engagement is only available to local startups who have a superior idea and a workable business plan. The program is consistent with the firm’s philosophy of providing terms and services that have immediate impact and practical value for business clients.
A simple application process can be found for the Structured Fee Engagement program at the firm’s website at www.donaldkatzlaw.com or contacting the firm at 248-733-4502.
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