If we can learn anything from Facebook Inc. founder Mark Zuckerberg, let it be this: Be careful about the conversations you have with friends, associates and potential cofounders of a startup at the initial stages, warns Richard Segal of Foley & Lardner, as these talks often involve equity allocation.
“While an entrepreneur may think that a casual chat or email exchange regarding equity in a to-be-formed entity … may be nothing more than that, the other party to the conversation may think otherwise,” says Segal, and that becomes problematic if and when a relationship breaks down.
