Wisconsin and the Startup Community: Why Attorneys and Law Students Should Become Engaged

Next week from November 5th to November 11th, Wisconsin is celebrating its Startup Wisconsin Week. Cities across the entire state of Wisconsin will be hosting programs and events geared toward helping Wisconsin grow its startup community. For the entrepreneurial-minded, this week provides an array of opportunities to network, learn tricks of the trade, and become more involved in the startup process. For transitionally focused attorneys, this week offers a variety of opportunities to meet new potential clients and learn more about how entrepreneurs can affect Wisconsin.

Wisconsin itself has a lot of success with maintaining new businesses. According to the Kauffman Index of Main Street Entrepreneurship, out of the 25 largest states, Wisconsin ranks second in small business activity. Out of this same group of states, Wisconsin also ranks fourth for the highest rate of female business owners and fourth with the highest rate of business owners between the ages of twenty to thirty-two.  (more…)

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Bitcoin and Money: An Advocate’s View

Photo of a lampost with a paper flyer taped to it asking passerby to send bitcoins to pay for college.Some refer to Bitcoin as the internet of money. Why? Because they believe Bitcoin will revolutionize the way we transact with each other the same way the internet revolutionized the way we communicate with each other. Some critics argue otherwise. But, quite interestingly some of Bitcoin’s biggest critics are the same institutions and industries that stand to be disrupted by Bitcoin. To some, the idea of Bitcoin replacing our current mediums of exchange is too far-fetched. I would argue that our mediums of exchange throughout history have suffered arguably more drastic changes. As a human race we went from bartering, to exchanging precious metals, to paper money, and most recently to plastic cards with magnetic strips.  How do you think people reacted when they were told they would not be buying and selling goods with precious metals, but instead they would be using paper? This was a substantial aberration in the manner people transacted with each other, and it took hundreds of years for there to be consensus on this transition.

On that note, what is Bitcoin? Most people will say that Bitcoin is a digital currency. While at its essence this is not a false statement, if Bitcoin is simply a digital currency it would be inconsequential. Most of our currencies today are already digital. Bank accounts today are digital databases, and we use those bank account to transfer money to and from each other, in electronic form. That is digital money. The reality is that only about 8% of total world currencies exist in physical form. It would seem that if Bitcoin is as revolutionary as some claim, it would need to offer something beyond the digitalization of money, and it does. Let’s discuss some of these characteristics and possibilities. (more…)

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Bitcoin, Blockchain, and Smart Contracts – Part 2

Currency on a blockchain was the logical first step, and while it may well disrupt the way our financial systems operate, it was just that – the first step. Public and private industry adoption of blockchain and smart contracts is not dependent on the price or market capitalization of cryptocurrencies. Just this year blockchain popularity increased by 11% among large enterprises, while the cryptocurrency market capitalization, from early January to today, has decreased by an estimated $600 billion. Let’s talk emerging uses.  (more…)

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Bitcoin, Blockchain, and Smart Contracts – Part 1

Photo of a Bitcoin Cash wallet on a mobile phone and a copy of Mastering Bitcoin written by Andreas AntonopoulosOver the past year and a half Bitcoin and other cryptocurrencies have been taken a place under the mainstream spotlight, meaning the public at large has witnessed the speculative behavior in the cryptocurrency market. In December 2017 the price of one Bitcoin surpassed $20,000, only to encounter a bear market where the market price today is around $6,500. This volatility is not new to Bitcoin. For example, on December 4, 2013, Bitcoin was $1,175 and shortly after, on February 10, 2014, the price hit a low $100.  I point out price volatility to show that the cryptocurrency market is a unique speculative market. With that being said, let’s put money to the side and focus on the technology on which the Bitcoin network runs – blockchain technology. As we will see, using blockchain to create and maintain a currency is only the beginning.

At its essence blockchain technology is linked data between computers. It is defined as a digital, decentralized, append-only, distributed ledger that allows unrelated individuals to transact with each other without the need for a third-party or controlling authority. Because no third-party transaction confirmation is needed, the network becomes trustless. I want to make a note on the ‘append-only’ characteristic because it is crucial to the high security value blockchain provides. Append only means that data can only be added to the blockchain, it cannot be removed. Blocks that are already on the chain cannot be altered in any way. You can only make a change by noting it on a future block that is not on the chain yet, and every participant of the blockchain can see this change. At very technical levels advanced cryptography is what allows blockchain to exist, but diving into a discussion of these technicalities requires a scientific discussion, which, while interesting, would not serve a legal purpose. However, something of high-relevance to the legal community is a discussion of smart contracts. Working closely with coders and blockchain experts, attorneys can draft smart contracts that provide a more efficient, secure, and cost-effective way of facilitating transactions between individuals. (more…)

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Will a Wisconsin Benefit Corporation Benefit Your Start-Up?

Certified B Corp LogoThis semester in Professor Lisa Mazzie’s Advanced Legal Writing: Writing for Law Practice seminar, students are required to write one blog post on a law- or law school-related topic of their choice. Writing blog posts as a lawyer is a great way to practice writing skills, and to do so in a way that allows the writer a little more freedom to showcase his or her own voice, and—eventually for these students—a great way to maintain visibility as a legal professional. Here is one of those blog posts, this one written by 3L Nikki Paterson.

As a student associate in Marquette’s Law and Entrepreneurship Clinic, I see many start-up companies struggle with entity selection. It can be a difficult decision because founders have to consider liability, management structure, employee compensation, formation formalities, future investments, and tax implications, among other things.

As of February 26, 2018, the decision-making process got even harder. That is when 2017 Wisconsin Act 77 took effect, which recognized a new type of entity: benefit corporations. Far from being a trailblazer, Wisconsin was the 34th state to adopt such legislation.

So what is a benefit corporation? A benefit corporation is a type of corporation that places social and environmental values on equal footing with profits; in other words, a corporation with a “triple bottom line.” Chapter 204 of the Wisconsin Statutes specifies the process and requirements of incorporating a benefit corporation. (more…)

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