Family Law Prof Blog

Editor: Margaret Ryznar
Indiana University
Robert H. McKinney School of Law

Monday, October 14, 2019

Prenups for Startup Founders

From Yahoo!:

 The young woman in Monica Mazzei’s San Francisco law office was adamant: She wanted a prenuptial agreement.

Never mind that the client had barely anything to her name. What she had was a bunch of startup ideas. She and her fiancé, who already had his own small tech company, signed a prenup with clear terms, Mazzei said: “The spouse who has an idea [and] starts a business ‘owns’ that business. It’s their baby.”

A few years later, Mazzei, a partner at Sideman Bancroft, was traveling through the San Francisco airport when she saw her former client on a magazine cover. Her startup had struck gold. Her husband’s business had fizzled.

In Silicon Valley, where penniless programmers fervently believe their ideas are worth billions, getting rich can take priority over getting married. California law assumes that any wealth created during a marriage is community property, which should be split equally in a divorce. That’s alarming not just for young entrepreneurs but also their investors.

Read more here.

https://lawprofessors.typepad.com/family_law/2019/10/prenups-for-startup-founders.html

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