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California’s SB 53 and Emerging AI Regulation: Strategic Guidance for Founders and Investors
California recently passed the Transparent in Frontier Artificial Intelligence Act (SB 53), which is the first comprehensive state-level AI safety framework in the United States. This law applies mostly to the large AI developers training models with extreme compute (10^26 FLOP) or earning $500m+ annually.
If you are a founder of a tech startup, it is not likely that this law applies directly to you. However, SB53 may still materially impact your startup business. SB 53 introduces regulatory, commercial, and reputational dynamics that are likely to extend well beyond the Golden State.
Below is a summary of what founders of early-stage AI companies and their investors should be preparing for
Stock Vesting in Startup Companies
Why “Vesting?”
Building a company from the ground up is a risky (but hopefully rewarding) endeavor for founders. In exchange for the founders’ efforts and devotion to the success of the company, the founders take a significant equity stake in the company, with the expectation that the value of these shares will grow substantially as the company grows. However, where there are multiple founders involved, each founder will want to ensure that their co-founder(s) are incentivized to stay with the business and work hard to make it successful, rather than holding on to a large equity stake and relying on the other founders to put in the lion’s share of the work needed to grow the business. To address this concern, the initial grant of shares to each founder is often made subject to “vesting,” which links a founder’s right to keep such shares (or some portion thereof) to their continued service with the company.
MintzTech Connect: All Things Technology — October 2025
One of the remarkable things about the US economy is the robust nature of startups and emerging companies. These new enterprises drive growth and create jobs, and in turn fuel additional economic activity, creating a multiplier effect on growth. This issue of MintzTech Connect focuses on an important federal tax exemption available for investing in startup enterprises: what is known as Qualified Small Business Stock (QSBS).
New Electronic Filing Option for Section 83(b) Elections
On November 7, 2024, the Internal Revenue Service (IRS) released Form 15620, Section 83(b) Election (“Form 15620”), standardizing the requirements to make an election pursuant to Section 83(b) (“Section 83(b) Election”), with the promise of making electronic filing available for Form 15620 in the future. The IRS has made good on its promise and now permits electronic filing of Form 15620 to make a Section 83(b) Election through the IRS website. This change eases the administrative burden of having to physically mail the Section 83(b) Election (including a sprint to the mailroom on certain occasions to meet the 30-day deadline).
This alert explains the process for electronically submitting Form 15620 and provides a brief background on the Section 83(b) Election.
Client in the News: Moolah Kicks
Mintz client Moolah Kicks, who was brought into the Firm via our MintzEdge start-up program, was featured in the New York Times on July 18, 2025. Founded by Natalie White, Moolah Kicks is a first-of-its-kind basketball sneaker company that designs shoes exclusively for women.
QSBS Benefits Expanded Under One Big Beautiful Bill Act
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (OBBBA), which included revisions to Section 1202 for “qualified small business stock” (QSBS) unchanged from those initially introduced in the Senate version of the bill. The expansion of benefits applies to QSBS acquired after July 4, 2025.
MintzTech Connect: All Things Technology — July 2025
Common ground. In a successful venture capital transaction, the founders and the venture capitalists find common ground so they can work together to build a successful enterprise — listening to the other side, determining what is important to each stakeholder, and balancing the competing economic interests to find mutual success. We see this time and again in our venture capital / emerging companies ecosystem, with the result of creating many successful enterprises. Activity in our world of emerging companies remains robust, in large part by the ability of the various stakeholders to find common ground. As legal counsel, one of our primary jobs is to help facilitate this finding of common ground and to solve problems, not create problems. Imagine a world where we all focused on finding common ground!
Client Alert: Delaware Franchise Taxes
Everyone told you to incorporate in Delaware. Podcast hosts, industry blogs, your co-founder, your lawyer, your college roommate, your dogwalker – they all said that when it comes to incorporating your startup, Delaware is the place to be. Now, you’re staring at a notice saying that your company owes tens of thousands of dollars in state franchise taxes, and you’re ready to reach for the panic button. Sound familiar?
Seed Funding Basics
After forming a company and dividing equity amongst the co-founders, a founding team’s next questions are typically about funding. Often among ambitious founders, venture capital first comes to mind. Today, venture capital is well-suited for growing early-stage companies but rarely available for truly starting companies. In recent years, venture capital has been deployed in larger amounts to fewer companies and there has been a corresponding shift toward larger and more frequent seed or angel investments.
The Financing Environment and Current Trends in Robotics
As we head into the second half of 2025, the prospects for innovation in robotics and artificial intelligence (AI) seem limitless. It is difficult to find an industry that hasn’t touted the potential for robotics and AI to bring significant growth and advancement: from agriculture to warehousing and logistics. Key sectors, including healthcare, financial services, retail, and manufacturing, are integrating robotics into their physical processes and attempting to optimize other aspects of their businesses through the use of AI, including the use of surgical robotics to enhance precision and efficiency in medical procedures and the adoption of robotics to increase safety, productivity and quality in manufacturing and logistics.
Seller Considerations When Negotiating a Letter of Intent
Negotiating and signing a Letter of Intent (LOI) is a key inflection point in the process of selling your business. Buyers and sellers both want the LOI to ensure a base level of understanding on certain key terms such as price, the structure of the deal, exclusivity, and confidentiality. However, sellers generally want, and should push for, additional details before agreeing to exclusively negotiate with a potential buyer. Below are some of the key items that sellers should ensure they have a full understanding of.
The Delaware Empire Strikes Back to Protect its Turf!
On March 2025, a sweeping reform of the Delaware General Corporation Law (DGCL) took effect. SB 21 codifies safe harbors for conflicted transactions, clarifies director independence standards, and significantly tightens shareholder inspection rights. The new law reflects Delaware’s strategy to maintain its position as the corporate domicile of choice amid growing competition from states like Texas and Nevada.
SEC Provides Further Clarity in Rule 506(c) Offerings
Recent regulatory developments in the crypto asset and financial technology space suggest that US regulators may be shifting toward a more balanced approach — one that prioritizes clearer regulations while fostering innovation over a more enforcement-driven strategy. President Trump’s recent executive order on this topic reshapes the Biden administration’s approach to crypto assets by eliminating many of the prior administration’s policies on crypto and establishing the President’s Working Group on Digital Asset Markets (Working Group).
MintzTech Connect: All Things Technology — April 2025
As we turn our thoughts to 2025, there is clearly significant enthusiasm in the financial world for a bust-out year in venture capital. Anecdotally, we can readily see that the number of transactions is increasing, and perhaps we are witnessing a paradigm change with a new robust market for private company financings. Hopefully, the dam holding back IPOs will break in 2025. Deal flow is definitely increasing, especially with respect to any enterprise related to AI.
Delaware’s Corporate Law in the Culture War: What It Means for Startups and Founders
Controversial rulings—combined with high-profile criticism from high profile figures like Elon Musk—have sparked a broader debate about whether companies should explore alternatives…
A New Era for Crypto Regulation & Innovation? The Crypto Executive Order, a Rebooted SEC Crypto Task Force & the Journey Ahead
Recent regulatory developments in the crypto asset and financial technology space suggest that US regulators may be shifting toward a more balanced approach — one that prioritizes clearer regulations while fostering innovation over a more enforcement-driven strategy. President Trump’s recent executive order on this topic reshapes the Biden administration’s approach to crypto assets by eliminating many of the prior administration’s policies on crypto and establishing the President’s Working Group on Digital Asset Markets (Working Group).
The State of the Funding Market for AI Companies: A 2024 - 2025 Outlook
Artificial intelligence (AI) has emerged as an influential technology, driving notable investments across various industries in recent years. In 2024, venture capital (VC) funding for AI companies reached record levels, signaling ongoing interest and optimism in the sector’s potential. Looking ahead, 2025 is anticipated to bring continued innovation, with promising funding opportunities and a growing IPO market for AI-driven businesses.
Key Considerations for the Prospective Blockchain Investor
Prospective purchasers of blockchain assets can now navigate through global exchanges (i.e., Coinbase or Kraken) to invest in various forms of tokens. Investments in tokens, however, are only the tip of the iceberg for those who are interested in undertaking financial exposure in blockchain projects. Here, we will provide a high-level overview of common forms of securities that blockchain investors may choose to acquire.
USPTO Issues Artificial Intelligence Strategy
Artificial Intelligence (AI) in intellectual property is as big – and as fast-changing – a topic as ever. On January 14, 2025, the U.S. Patent and Trademark Office (USPTO) published an Artificial Intelligence Strategy (“USPTO’s AI Strategy”) document which discusses how the USPTO “aim[s] to address AI's promise and challenges across intellectual property (IP) policy, agency operations, and the broader innovation ecosystem.”
MintzTech Connect: All Things Technology — January 2025
As we turn our thoughts to 2025, there is clearly significant enthusiasm in the financial world for a bust-out year in venture capital. Anecdotally, we can readily see that the number of transactions is increasing, and perhaps we are witnessing a paradigm change with a new robust market for private company financings. Hopefully, the dam holding back IPOs will break in 2025. Deal flow is definitely increasing, especially with respect to any enterprise related to AI.
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