0:10 On this episode of Tally Tales, we’re diving into one of the most confusing and potentially costly transitions a startup can face, US entry and capital raising. To help us unpack this, I’m joined by Omeed Tabiei, a San Francisco based corporate lawyer and multi-time tech founder, specializing in all things US fundraising, structuring, and M&A for startups. If a US entry is on the cards for you, you don’t want to miss out on Omeed’s insights on how you can best prepare.

0:28 Okay, Omeed, great to have you here. Thanks for joining us. Thanks for having me, Emily. Great to be here. So before we dive right in, I want us to get to know you a bit more. So give us the Omeed elevator pitch. Yeah, so the elevator pitch that I’ve been giving most recently is I’m a corporate lawyer. I have my own law firm. I’m the managing partner of Optimist Legal and Optimist Legal is a law firm that helps startup founders start their companies, scale their companies, raise capital and exit.

1:00 So we’re a full service corporate law firm helping founders all the way from the minute that they start their business to when they want to sell. their business. And in addition to that, I’m also a 2X software founder. So I’ve founded two software companies. One was VC backed, one was bootstrapped. Some highlights of my career, I was an early lawyer on the Hyperloop One team, which was a transportation technology that can get you from LA to San Francisco in 30 minutes.

1:29 I helped them raise over $100 million in a couple of their financing rounds. ah And in my 10 years as a corporate lawyer, I’ve generated over a billion dollars in deal value for the startups I’ve worked with. So that’s just a quick high level kind of elevator pitch about who I am and some of the things I’ve done. I think a lot of the Aussie founders who are going to be listening in on this are going to get a lot out of the conversation.

1:55 Based on your experiences and also your legal work as well. So let’s start off with things a bit more broadly. So we’re thinking about Aussie founders who have future plans to go into the US. What are the biggest legal mistakes that you’ve seen over and over again? Where do startups tend to get tripped up? Yeah, I think for any founder coming to the United States, I think the pace by which the United States moves is going to be quite surprising for overseas founders, including Australian founders. Yeah. investors move very quickly here, customers move very quickly here, the markets move very quickly here.

2:41 And so founders need to be prepared for how quickly things move here. So I think that’s one of the things that’s going to be really surprising for founders as they come to the United States. And I think it will be also welcome. It’ll be like surprising and like, this is actually really nice. You know, this um while challenging, I think a lot of founders really appreciate.

3:04 you know, how quickly things can move in the United States while also, like I said, it is, it is challenging and it is something to get used to and adjust. But as part of that, I think not thinking through very clearly, I think a lot of founders also, including myself, you know, they just try to get through today or, know, the, isn’t a clear strategic plan in terms of moving to the U.S. or they’re. You know, there might be a loosely held plan, for example, that isn’t really considered until it’s actually time to pull the trigger on moving to the United States.

3:41 And that’s actually where the greatest missteps happen. um For example, some of the big legal mistakes is failing to start a U.S. entity before you actually start operating in the U.S. That actually can create some significant challenges for Australian founders because what ends up happening, and I’m not a tax lawyer, just to be clear.

4:02 uh I think a lot of people put tax and corporate very closely together and they are related in a lot of ways, but I mostly just handle the contracts and agreements side of things. And then there’s an actual tax lawyer, someone who focuses on tax that people need to work with, but it gets really complicated on the tax side of things.

4:28 uh And that’s where we’ve seen people make some of the biggest mistakes. And then there are just some general mistakes that I think any founder makes, whether you’re from Australia or anywhere else, but it’s like lack of understanding of like governance discipline, for example, how to keep your entities separate, how to keep everything clean, mixing assets, failing to hold regular board meetings or just making decisions without board consent and that sort of thing. And then I think another area that a lot of not, I mean, US founders have a lot of challenge with this. And you see this a lot in acquisitions, especially, but navigating employment and labor compliance.

5:10 So if US founders have challenges with that, I can’t imagine what foreign founders might think of it. So those are just some of the areas of biggest mistakes that Australian founders can make when contemplating moving to the US. Yeah, you touched on the how if founders have like a loosely held plan and maybe haven’t thought about it from day one for a lot of Aussie founders, the goal is to one day launch in the US or capital raise in the US. So what is the advice from day one? What can they start doing now so that in in the future when they plan to raise what can they do?

5:53 Yeah, I think uh I think getting incredibly clear on what that timeline is or what that milestone is and as they approach that milestone starting to uh think about. meeting attorneys, meeting tax advisors, that sort of thing, really understanding what the process of moving to the United States is going to entail and how to avoid those landmines, especially that I can’t emphasize enough how big the tax landmine is an important consideration because as I mentioned, if you, for example, start operating in the United States without having an entity that can cause really significant challenges that, you know, I’m going to likely share a story on this podcast. But yeah, you know, get clear, like, it doesn’t, you know, lot of founders, for example, will say, I want to start in the US in the next year, the next two years, for example, but then they approach that timeline for, and, know, and at that point, they’re like, okay, we’re still not ready for whatever reason, we’re still, you know, finding product fit in the Australian market. So we’re not ready to move to the US market yet. That’s fine.

7:06 Um, but yeah, you know, setting that milestone, whether it’s, you know, a revenue milestone or whether it’s a, you know, profit milestone or whether it’s a user milestone or whatever it is. And as you start to just near that milestone, really orienting yourself to what it will take. Um, and, you know, not taking action without understanding what the consequences of that action is.

7:33 you know, those, those aspects are really important. Love to hear the story, you know, what happened in the past that then why is it that founders should take this so seriously? Yeah, so we had a founder recently who uh had found a US investor and the US investor wanted to invest in the company and the company again had loose plans.

7:59 You know, everyone recognizes that the US is one of the biggest markets in the world. It’s you know, the one of it is the biggest venture market in the world by far. um And so every startup. you know, has plans and dreams to move to the United States. Well, you know, this founder just so happened through TikTok, actually, I believe had connected with, uh you know, someone here in the United States, an investor.

8:26 And when uh they went to uh incorporate in the US, essentially challenges arose. Well, OK, so first of all, the US investor did not want to invest. in the overseas entity. They were absolutely adamant, hey, if I’m going to invest, it’s going to be into a US entity. And then there was back and forth. It wasn’t in their roadmap.

8:57 That actually was what the founders’ uh blocker initially was. It’s not in our roadmap. We hadn’t planned on launching in the US at this point. And this investor specifically also had a very large audience that was uh very valuable to the startup that they wanted to invest in. So there was kind of like a two-fold benefit to this investor being brought in.

9:26 And the amount that the investor wanted to invest wasn’t a huge amount, but it wasn’t small. It was typical with the size of an angel check, you know, around $200,000. But not enough to, you know, it’s not like they’re raising two million or, you know, a series A 10 million to like really kind of motivate the founder to be like, we need to get this money. You know, 200k is like, it’s a, it’s not a huge amount. And as I mentioned, the founder had not thought about the roadmap of launching in the United States.

10:01 So it was kind of Unexpected that they had found a US investor this early in the game, but you know also very beneficial anyway So investor refuses to invest in the overseas entity founder doesn’t want to open the entity in the United States they go back and forth You know this goes on for weeks. It’s deadlocked Um, founder, you know, tries like all these different ways to convince the, the investor to invest, know, there’s traction.

10:31 Hey, we really need this money. We can use this money. Um, and then I get involved and, know, start talking to the, to the founder and I’m like, you know, this could be beneficial. There is obviously more capital that can be raised here. And he’s like, okay, you know, I’ll take this 200 and see if I can create momentum in the U.S and, know, maybe up it to a 500 K round, for example.

10:52 But then. What ended up happening was the company had already had some US clients and so on and so forth that had gone through the overseas entity. They went and they talked to an accountant. Essentially, there’s double taxation issues that are coming up. And as a result, now we’re actually in the thick of this. m We’re trying to figure out essentially the founder is weighing Does it even make sense for me at this point in this early stage to make this flip happen or should I wait until there’s uh a greater amount of business that’s been conducted such that it would support me going to the United States to essentially do the flip?

11:48 And that’s the consideration that they’re wrestling with right now. So it has completely derailed the investment. Yeah, wow. You mentioned a flip for those listening who might not know what a flip is. Could you provide a bit of an explanation on that? Yeah, so as I mentioned, most investors are not going to want to invest in any sort of overseas entity or whether it’s a UK entity or an Australian entity, whatever it is, all overseas startup founders are going to, when they come to the US, the US investors are going to want to secure their investment in the asset that they invest in, which is the founder’s company. And the way that they do that is, uh They make sure that the parent company is a US entity.

12:36 And so what a Delaware flip is, is let’s say you have uh an Australian entity, and that is the only entity that exists. You want to come to the United States. What’s going to happen is you’re going to create a US entity likely in Delaware, because that’s more where most investors are going to want you to incorporate. And then that Delaware entity is going to flip. the structure and how it’s going to flip the structure is the Delaware entity is going to be the parent and then the Australian entity is going to be the subsidiary.

13:09 uh So that is what a flip is. And the reason why it’s called a flip is sometimes there might be a US subsidiary and then an Australian parent and then you just flip it on its head. But either way, what the eventual result is going to be is the Delaware entity is going to be the parent company. and the Australian entity is going to end up as a subsidiary. And so with this kind of example that you gave, it sounds like there’s, there’s an important piece about timing to this flip.

13:39 ah What, you know, generally should people, founders be thinking about when it comes to when is the right time for them to flip? Yeah, the right time to flip is before you have any sort of uh base in the United States, whether it’s customers, whether it’s operations, either of those are going to be when you want to start thinking about uh when to create the US entity.

14:05 And so thinking about, you know, flips and this is something that’s coming from an investor. You’ve already mentioned, you know, a few things how investors might think and act differently than what happens in Australia. Like one, the fact that they found an investor via TikTok. That’s, I think that’s kind of unheard of.

14:24 very interesting and also that they think and move a lot faster than maybe founders from overseas might be used to. What are other ways that US investors think and how can Aussie founders prepare for that? Yeah, I think, you know, investors are finance professionals. And what that means is finance professionals are risk managers.

14:50 you know, overseas, the… risk tolerance is significantly lower than it is in the United States, but there’s still a significant amount of risk management that happens for these investors that are financial professionals in the United States. And the primary way that they manage risk is by following industry standards.

15:14 And so you want to be incredibly aware of what these industry standards are. And so some of the industry standards that you want to be incredibly aware of are, for example, choosing the right entity structure. So you don’t want to, for example, start as a limited liability company. You don’t want to incorporate anywhere other than Delaware. You want to be a Delaware C corporation.

15:41 And that’s one of the ways that investors think it actually makes investors breathe a sigh of relief. when they see that it’s a Delaware C corporation. It makes them uh feel like the founder has credibility. They know what they’re doing, because that is the type of entity that they look for. So that’s one way that investors think. Another way that investors think is, uh so in the United States, we have, and also overseas, wherever it is, whether it’s Europe or whether it’s Australia, we have…

16:18 like classes of investors. we have angel pre-seed investors. We have uh seed investors. We have, you know, uh growth stage investors, series A, series B. We have secondaries investors, for example, people, you know, that have interest in private companies that those companies have become quite valuable, but they’re not trading on the public market. Now, uh I think a lot of…

16:46 European and Australian founders might say, you know, I think a lot of the investors overseas are later stage investors. That’s what I’ve heard at least, you know, even investors that say that their early stage usually are, you know, so risk averse that they’re not willing to invest until later stages, even if they say that they’re, early stage investments, which is also the case in the in United States, too.

17:10 But we do have a very active angel community in the United States. People that are just high net worth individuals, maybe previous startup founders, definitely a lot of previous startup founders that have had exits that are willing to invest. So the other way that investors think is you don’t want to be pitching a seed investor when you are in the pre-seed stage, for example.

17:34 You don’t want to be uh pitching series A investors when you are in the seed stage. because they’ll just be a mismatch. uh Now, the difficulty, as I mentioned, is a lot of investors call themselves early stage investors and will put themselves out as early stage investors just to create deal flow, to talk to as many founders as possible and then kind of cherry pick the ones that they feel are oh the strongest horses in the race.

18:04 And that’s a challenge and a difficulty that founders will have to go through. uh when undertaking the investment process. But that’s another way that investors think. There needs to be alignment in terms of stage of investment, type of investment, those sorts of things. Another way that investors think is uh founders need to be aware of the different types of investment vehicles.

18:32 in terms of the types of agreements so that they know what kind of structure they’re going to be offering investors. the three primary types of investment vehicles in the United States are what are called a SAFE, uh the Simple Agreement for Future Equity. SAFE is a document, it’s a contract that was created by Y Combinator. Y Combinator is one of the most…

18:59 prominent accelerators in the world. They’ve been around a long time, have made most of the investments into the big kind of tech startups that most people know, the Dropboxes and the DoorDashes and all those, Airbnb. uh And SAFE, Simple Agreement for Future Equity is a templatized uh document contract. probably created like in the early 2000s. And when it was first created, uh lot of investors did not take.

19:34 It took many years for this contract to actually become a template standard. I remember when I was raising for my startup, you would go and talk to investors and you would tell them that you wanted to raise via SAFE and none of them knew what it was. Now actually investors… will say themselves, hey, we’re going to make this investment via SAFE uh More old school investors, for sure, they still uh prefer not to use SAFEs.

20:05 They will often look to, for example, convertible notes, which is similar to a SAFE but has loan mechanics. So that’s the second type of investment contract that uh founders will need to know about. The first one is, as I mentioned, the SAFE, the simple agreement for future equity. And then the second is a convertible note, which is a loan.

20:24 So it has a maturity date and interest rate and so on and so forth. But it also comes with a conversion mechanic, which means that at a certain point, usually a fundraise that follows uh that loan will convert into equity. And then by the way, that’s what a SAFE does as well. It’s just a SAFE is like a convertible note, just it’s not a loan.

20:49 So it doesn’t have interest. The maturity date is essentially the date of conversion, which is a priced round. when you, which is the third type of contract, by the way, which is a priced round contract. It’s just a typical stock purchase agreement where you are purchasing, for example, one stock for $1 or whatever it is that you end up pricing the stock at.

21:16 And so SAFEs, will convert when you raise at a price round. And the whole idea of a SAFE is you raise your SAFE, you raise your 500k for example, let’s say you got into Y Combinator, you raise your 500k for 7 % or whatever it is, and that’ll give you runway for the next six to 12 months. And then in six to 12 months, you go and you raise your Series A $10 million, so on and so forth.

21:47 at that $10 million, you’ll raise at hopefully like a $100 million valuation, for example, and then you ride into the sunset and have your billion-dollar exit and buy your yacht and all that good stuff. yeah, those are the three types of contracts and I went over them kind of extensively, but there’s a lot of other things that people need to know.

22:09 But those are some of the ways that investors think in the United States. I think if you can nail Those two, those are really foundational. And one thing that we hear about here over in Australia is cap table hygiene and how expectations in the US in terms of what a cap table looks like might be slightly different to Australia. What have you found in your experience with how a cap table should be structured?

22:36 Yeah, definitely. Well, there’s a couple different components to cap table hygiene. So one aspect of cap table hygiene is uh making sure that you have uh an easily accessible cap table. So that’s one aspect of cap table hygiene. So using a platform like Carta, for example, which is probably the most prominent uh cap table management software that there is out there.

23:04 There’s another aspect of cap table hygiene, which is making sure that all of your equity grants are tied to specific documentation. So, uh you know, oftentimes founders will meet someone, you know, you’re at a networking event and you meet this guy that used to work for Salesforce, for example, and he tells you that he can introduce you to all the enterprise, you know, customers in the space. And he’s like, and I will do that for 10 % equity in your company, for example, and the startup founder is like, cool, this kind of like handshake deal.

23:40 Those types of agreements all need to be reflected on the cap table. And so that’s an aspect of cap table hygiene. Another aspect of cap table hygiene, and that causes significant issue for investors is making sure that the equity that you issue makes sense. So as I mentioned, like, does it make sense for you to give 10 % to this person who’s just going to introduce you to their network of, of, you know, enterprise customers for a lot of founders, um, you know, their logic is, well, you know, my company right now is worth nothing.

24:20 So what does it matter to me if I give this person 10 % of, you know a company that’s worth zero. uh If they can help me get to a million dollars in the next 30 days because that’s what they told me that they’re gonna do But that’s not the right way to think about things the right way to think about things. I think that a lot of founders either uh Treat their equity too loosely as in there are like too willing to give it away or they don’t They hold it too tightly and they’re not utilizing it to the best capacity and capability possible.

24:58 So I think that’s another aspect of cap table hygiene is really understanding, again, like what the market expectation is. I see a lot of startup founders, for example, giving, as I mentioned, ridiculous amounts of equity to… you know, software developers, a software, they meet a software developer and the software developer is like, hey, I will create this MVP for you, but I want 50 % of your company.

25:24 And the startup founder just gives them 50 % for the creation of the MVP. And then after the MVP is created, the software developer, you know, disappears, for example, and investors are going to look at that and they’re going to say, well, why did you give that person 50 %? Now this person has locked up 50 % of your cap table.

25:43 and it’s dead equity. So that’s another aspect of cap table hygiene as well. We often are advising startup founders, if there are people on your cap table that were with your company at a certain point, but are no longer with your company, the pitch to them is, you hold whatever it is, 1 % equity on our cap table, uh we’re not going to exit.

26:13 probably for another 10 years, another five years, it’s gonna be a long time before you see any liquidity for that uh percentage of equity that you own. Why don’t you let me buy it from you? Why don’t you uh get your money out now? And uh that’s a way to clean up your cap table. Another aspect of cap table hygiene is there’s this phenomena in the United States, I think SAFEs are too accessible.

26:42 And so what startup founders will do is they will do multiple rounds of funding with SAFEs, and then it’ll end up that they have a hundred people on their cap table, all holding really small amounts of equity. Investors hate that. That’s another aspect of cap table hygiene. So, you know, something that you can do is you can put them all into an SPV, for example, which is a separate entity.

27:07 And then, you you consolidate them into one. m entity in one place. That’s a way to maintain cap table hygiene. But yeah, I think those are all different ways to maintain cap table hygiene. And how important is cap table hygiene? What could potentially be the downside if you’re not maintaining your cap table? Yeah, I think that with every investment opportunity, especially in the early stages, investors are looking for what’s called founder market fit.

27:40 And founder market fit is I’m going to invest not in this company, but I’m going to invest in this person. And so does this person operate in a way that again, like makes me feel relaxed? this person operate in a way where it the investment doesn’t feel risky. Now, what does that mean? That means that, uh you know, does this person understand what the investors are looking for?

28:09 Are they credible? I think that’s the number one question that investors are doing due diligence on when they are seeking to invest in founders. Is this a credible founder that I can trust my investment with this person? So when an investor sees a messy cap table, when an investor sees like bad decisions that have been made with respect to the cap table, giving too much equity, leaving debt equity outside of the cap table, a messy cap table that uh the uh agreements with respect to uh the equity that is to be issued are not papered.

28:49 All of these things can absolutely, if not uh damage the relationship with the investor. they will absolutely pull term sheets for some aspects of these things. And especially, I think, the one uh thing is bad uh decisions made with respect to issuances of equity. For sure, they’ll pull term sheets on that. So really, really important to maintain that cap table hygiene and to think about the fact that the investors are investing in the founder as well as the business.

29:26 And those two things are, especially in the, you know, the early stages are so intertwined. So for then founders who are looking more immediately. So 2026, let’s say we’ve got startups who are looking to expand into the US, whether it’s to gain customers or for investment deal, what should they be thinking about? Is there like a checklist? Should they be in terms of their legals that they need to get in order so that they’re ready?

29:58 Yeah, yeah, in 2026 founders should be thinking about In terms of a checklist, I think, especially for Australian founders that are thinking about launching in the United States, as I mentioned, proper planning is incredibly important. Understanding the process of setting up the entity in the United States, I’ve already shared some of the aspects of setting up the entity in the United States type of entity.

30:37 uh They should be familiarizing themselves with uh the standard market practices. And if you work with a knowledgeable attorney who has experience in the startup space, the benefit of hiring an expert is that that person has that market knowledge. And so they can be advising you. You go to them and you say, hey, I’m thinking about issuing XYZ amount of percent to my co-founder or my advisor.

31:05 What are your thoughts on that? We’re always telling people like, no, no, no, don’t do that. Like, don’t give 15 % to this software development house. Like, you should actually make it more like five, for example, or advisors. Like, definitely don’t give them more than 1%. In terms of a checklist, yeah, there’s like a lot.

31:29 I think there’s a lot of resources out there in terms of setting up. their entities in the United States. They also need to be thinking about at what point they want to seek investment in the United States as well, because I mentioned stage is really important. And I think something that founders should be aware of is being successful overseas doesn’t necessarily like guarantee that you’re going to obtain investment in the United States. Um, it, you still are going to have to show, you know, if you’re like seeking investment from seed investors, for example, you’re going to have to show traction.

32:11 Now for angel investors, uh, you will not need to show traction, um, because angel investors are more comfortable investing in pre-launch entities. But the problem again, for a lot of startup founders is angel investors. are difficult to find. Typically, angel investors for most startup founders that don’t have a pre-existing network in the United States, angel investors are going to be your friends and family.

32:50 So, yeah, think, um you know, thinking about your US entry, where you’re, you know, at what point you’re going to seek investment, starting to plan resources, you know, your own internal resources for your US launch. I think those are, you know, the ways that founders should be thinking about how to approach the US in 2026.

33:20 Okay, so we’ve talked about investments launching into the US. One thing that founders are always thinking about is the magical exit at some point in the future and hoping for a massive US exit, you know, buying the yacht, billion dollar company sailing up into the sunset kind of vibe. Thank plans, what are steps that they can do now or in the next few years as they look towards that exit?

33:52 What is it from a structural perspective? When they’re at the early stage, how do they best prepare themselves? Yeah, yeah, that’s a great question. So I think where they start is proper entity structuring. So as I mentioned, whether it’s a raise or whether it’s an exit. Raises, I actually have always said that raises and exits are very similar in that, you know, a raise is like a little mini exit, uh you know, because what is an exit other than either your assets or your stock are being acquired where a raise is a partial acquisition of your stock.

34:35 So similar, they have a lot of similarities in that respect. So where you start is a proper uh entity structure. in terms of choosing the right state of incorporation, choosing the right type of entity for incorporation. Delaware C-Corp, if it hasn’t landed yet. But yeah, so Delaware C-Corp, think a big… Problem in a lot of acquisitions is with IP ownership. So IP ownership can often uh be a sticking point for a lot of acquisitions uh specifically around IP assignments.

35:20 So if you all of the people that have contributed to this to the company and the success of the company have not signed uh proper IP assignments, are called confidential information assignment agreements, C-I-A-A’s. Those are incredibly important. Sometimes not having all of the signatures on something as simple as not having both signatures on those IP assignments can hold up both fundraisers and exits, which is ridiculous, but that is like how it works. And a significant amount of the due diligence is going to be focused on ensuring those IP assignments are in place because again like an asset it’s incredibly important that the asset actually has proper, you know ownership and control of the valuables of the asset. uh And so, you know making sure from day one all co-founders, know sign IP assignments whenever I make content about this, I always say even if your grandma gave you an idea that you actually implemented into your startup, you know, the safe bet is to make sure that she signs an IP assignment as well. Just to, you know, give you an example, I have a friend who’s a startup founder.

36:42 Her husband is a designer and he often, you know, gives her ideas for, you know, design implementations and that sort of thing. She’s made him sign an IP assignment. even though he doesn’t necessarily directly work for the company. He has his own design agency, but um really important um because here’s the risk of what happens if you don’t get this document, if you don’t get this IP assignment.

37:10 If you don’t get this IP assignment uh and you end up implementing you know, some aspect of something that someone shares with you, whether it’s, you know, creation of code or whether it’s a idea that they gave you in the form of a marketing campaign or, or, or, you know, some sort of idea that you end up implementing in the business, whatever it is.

37:35 uh What can happen is they can come after the fact and they can say, Hey, that thing, that line of code, that block of code, that campaign, that logo, that whatever it is, actually, that’s mine. You used my intellectual property and they can sue you. And uh no acquirer and no investor is going to want to either invest or acquire a company that has uh liability in the form of…

38:10 potentially being pursued after the fact for creation of IP. And so that is a big sticking point for a lot of investors and acquirers, the IP assignment. So really important, right entity structure, IP assignment, thinking about exits, other things that people need to be thinking about is, again, lot of scrutiny is going to be placed on the cap table. Another huge… uh area of like risk and liability for a lot of startup founders is around employment compliance, specifically around like misclassification of employees and independent contractors. If that means nothing to you, I’m sorry. But just like a quick overview, there are two types of workers in the United States.

38:58 There are employees which are, you know, full time, what are called W-2 workers. Those employees have taxes deducted, for example, from their salaries. And there is a certain level of control that the employer is allowed to exert over employees, which is close to total control. I can dictate what time you have to be at work, what your work has to look like, when you can clock in, when you can clock out, what hours you can work, all those sorts of things.

39:29 Then there are independent contractors. Independent contractors are in the eyes of of tax, what are known as 1099. 1099 means that their taxes are not deducted by their employer. They are responsible for the deduction and handling of their own tax. Most vendors, for example, you work with a software development agency, they’re going to be an independent contractor.

39:53 Your contract needs to state that they are an independent contractor. So those are the two primary types of workers in the United States. And then independent contractors, you have little to no control over the independent contractor. So all you can dictate is, I want this result, but the means, the nature, the hours, the process, those sorts of things, you cannot control.

40:21 So you need to be incredibly aware of that and make sure that you’re adhering to the laws in that respect. You need to have you know, uh really strong contracts. you know, employment agreements, independent contractor agreements, vendor agreements, terms of service, privacy policy, making sure that you’re, you know, in compliance with global privacy laws, GDPR, all the various privacy laws in the United States, which is a whole kind of cluster of web of compliance.

40:59 uh The contracts need to be neatly organized, so I think you’ll love hearing this, Emily, but there needs to be, you know, a data room where all of these documents live, like in a structure that is intuitive and easy to navigate. uh You need to make sure that all of the documents are being countersigned as well, and all of those countersigned or fully executed, which just means that every signature page needs to have signatures on it. All of those documents need to live in a repository and you don’t want to be waiting until you uh either want to get funded or you want to exit to have all those documents in one place because it’s a huge pain to do cleanup after the fact and go running after everything.

41:49 So as you get those documents, need to be uh just housekeeping. It’s like housekeeping. You need to keep your house clean. You need to be putting those documents into the respective folders uh and making sure that those folders are regularly updated. You need to make sure that you’re uh adhering to corporate compliance. So your bylaws, when you start your Delaware C Corp, will have certain actions that have to be uh ratified by, for example, the board, other actions that will have to be ratified by shareholders. So issuance of stock, for example, is often going to have to be ratified by the board in the case of an exit, likely going to have to be ratified by the shareholders.

42:37 So these sorts of things are what you want to be thinking about in the form of an exit. Right entity, compliance with laws in terms of employment labor laws, making sure that you get IP assignments and locking down the IP. for the asset from day one and maintaining a clean cap table, uh compliance with data privacy laws, and uh making sure that you keep your house clean in the form of a well-maintained data room. I think that advice applies to any startup globally and sounds like uh it’s really important in the US as well.

43:21 And also tax from what you said earlier as well. It sounds like another really important piece for everyone to be aware of. uh Thank you so much. This has been absolutely fascinating. I’ve learned a few things. Part of Tallystone’s plan at one stage is we have to go into the US as well. So I found it really useful for us. And so I know absolutely that people tuning in are going to find this really fascinating and also feel more secure and prepared and know what they need to do next steps wise to go into the US. For those people who do have plans um to go into the US and want to reach out and maybe engage you or ask for some advice, how do they connect with you?

44:06 Yeah, uh so I have uh my LinkedIn. You can find me on LinkedIn, Omeed Tabiei. I have a newsletter that people can sign up for. I have a YouTube channel. Those are, you know, the three primary ways. And the YouTube channel is just under my name, Omeed Tabiei. And if they want to sign up for my newsletter, they can also do so off my LinkedIn. So LinkedIn probably would be the best place for people to find me.

44:35 Okay, well I’m sure you’ll be getting a lot of follower requests once this goes live. Awesome, well thank you so much again Omeed and you have a wonderful day and thank you for sharing all your insights with our Thanks for having me, Emily. It was great to be here.