Exciting news for startup founders who are looking to enter the US! The International Entrepreneur Rule (IER) might now be easier than ever to use, after recent updates by U.S. Citizen and Immigration Services (USCIS) (more on that below).

To help startups take advantage of this potentially improved process, we've arranged for special IER perks worth up to $3,000:

• For a limited time, Mercury^** is offering $2,000 in cash to Clerky startups who deposit the IER fundraising requirement amount ($264,147) within 90 days^*‍
• Ellis Legal, an immigration law firm, is offering Clerky startups $1,000 off one IER application
• SW Law Group, an immigration law firm, is offering Clerky startups 10% off one IER application

To get the Mercury perk, make sure to apply for a Mercury account from your formation checklist on Clerky. To get the perks for Ellis Legal or SW Law Group, go to the Perks page for your startup's team on Clerky and then look for the Immigration category.

On top of these perks, Clerky is also the easiest and fastest way to meet the IER requirements:

1. Incorporate Delaware corporation
   ‍
2. Issue stock to founders
   • Applicants have to own at least 10% of the startup
   • We're the only startup incorporation service to help you get the complete set of attorney-recommended 83(b) election evidence 😎 (requires paid add-on).
3. Open Mercury account without having to wait for an EIN from the IRS
   • Mercury can help you open an account even while you're waiting for your EIN, so you can get started closing investors as soon as possible. Just make sure to start your Mercury application from your formation checklist on Clerky to enable this.
4. Issue safe or convertible notes
   • Make sure to issue at least the amount required for the IER. As of July 2024, the threshold is $264,147.

^{* Earn a cash bonus of $1,000 by depositing at least $20,000 within 90 days of account opening and an additional cash bonus of $1,000 by depositing at least $264,147 within 90 days of account opening. This offer can't be combined with any other offers.
** Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust, Members FDIC.}

What is the IER?

The IER allows USCIS to grant startup founders parole to enter the US. Specifically, the IER makes it possible for most non-US startup founders to enter the US as long as they've raised more than $264,147 (as of July 2024) from investors meeting certain criteria. You have to own at least 10% of your startup, and up to three co-founders from the same startup can apply. You can stay in the US for 2.5 years (possibly up to 5) and your spouses can even work in the US too.

The IER has been available since 2021 but has not been popular due in part to very long processing times and unclear requirements. USCIS might be fixing that though. Late last week, they announced that they've worked through the backlog of applications and are actively encouraging people to apply. They also published new FAQs that make it easier for founders to apply by giving more clarity around the process.

We can't be certain, but many are speculating that the announcement and changes signal that USCIS wants to get more startup founders into the US and will be processing applications faster.

Things to consider

The IER could become a great option for non-US startup founders and we're excited for that possibility, but it's important to note:

• Parole isn't the same thing as a visa and there are some practical differences. You should consult an immigration attorney to determine what's best for your specific circumstances.
  ‍
• Many immigration attorneys recommend thinking of the IER as a backup to a visa. If you're applying for a visa to be able to work on your startup in the US, you can think of the IER as a backup that you might want to apply for at the same time. Or, the IER might be your only option if you're not eligible to apply for a visa.
  ‍
• The USCIS has specific requirements for the IER. For example, there are requirements that most well-known startup investors will meet, but that not all startup investors will meet. Please don't take any actions in anticipation of using the IER without first consulting an immigration attorney to make sure you take all the requirements into account.
  ‍
• The funding threshold ($264,147 as of the date of this post) is adjusted for inflation every three years and is next due to be adjusted in October 2024. Based on recent inflation data, we expect the funding threshold to increase when it's adjusted.
  ‍
• When a new president is elected this November, the new administration may have different views on the IER. While the USCIS may be signaling that they're eager to grant more parole now, this may change when a new administration takes over in January.
  ‍
• Some countries may have an exit tax for startups that move to another country (like the US). If you're in such a country and your startup raises money from investors, your startup could be considered valuable and trigger an exit tax. You should consult a tax advisor in your country if you have questions about this.

Finally, please keep in mind that it's too soon to know what startups will actually experience with the IER. Nevertheless, the recent updates by the USCIS are promising and might make the IER worth trying in more scenarios. Here at Clerky, we're excited for the prospect of the IER living up to its potential and are excited to help startups who want to try it out.

Good luck!

We're thrilled to announce our new BOI reporting tool! You can now submit all your startup's beneficial ownership information to FinCEN without ever leaving Clerky. 

In case you hadn't heard, most startups formed in the US now need to submit ownership information to FinCEN, a government bureau that helps detect financial crimes. This new requirement is a consequence of the Corporate Transparency Act (CTA), which went into effect in January 2024. 

Most Clerky startups now need to file a BOI report, with limited exceptions. Please refer to the chart below for information about deadlines:

The penalties for failing to file by these deadlines can be severe. That's why we've made staying compliant as easy as possible. As you approach your deadline, we'll send you reminder emails and in-app notifications. We'll also remind you to submit an updated report if we detect that you've changed any of your information, like your startup's name, address, or beneficial owners. 

When the time comes to file, you can submit your information directly from Clerky. We'll pre-fill the report with information we already have from your legal paperwork to make things as easy as possible. 

It's worth noting that a recent court decision in Alabama found the Corporate Transparency Act unconstitutional. The ruling won't affect most startups, only members of the plaintiffs in that particular lawsuit, but we're closely monitoring the development of any cases that may impact this requirement more broadly.

Do you still have questions about your startup's BOI report? Are you wondering whether you should get a FinCEN ID to make the process easier? You can find answers to these common questions and more in our help center article What is a BOI report?.

What's new in our software:

• Non-US founders can now apply for EINs through Clerky‍
• Startups can now apply for a Mercury bank account while waiting for their EIN‍
• We've just launched a cap table integration with Pulley

We've also added new perks, plus a limited-time offer:

• Efficient Capital Labs  – 25 basis point discount on ECL's financing fees
• Pulley – 15% off your first year when you sign up through Clerky
• Limited-time offer! Mercury — $1,000 cash for eligible Clerky startups that open a Mercury account (minimum deposit required)

Delaware's Court of Chancery recently ordered that Elon Musk’s $55.8 billion compensation package from Tesla be undone. On the surface, the decision can be confusing since Elon Musk has contributed so much to Tesla. Can a court even get involved with compensation?

Since there's a lot of interest in this ruling, we thought it'd be helpful to provide startup founders with a summary of the legal reasoning behind the outcome. So we read through the entire 200-page opinion to make the outline below for you. Enjoy!

What was the logic of the opinion?

Hopefully this gives you a clear understanding of how the case was decided! We've done our best to distill the opinion down to the essence of its logic. If you want to get into the details, you can read the full opinion on the Delaware Court of Chancery's website.

What are startup attorneys saying?

In case it's helpful, we've put together a list of commentary on this case by well-regarded startup attorneys and law firms:

• Fenwick & West
• Goodwin Procter
• José Ancer at Optimal Counsel
• Perkins Coie

Subject to any changes that might happen if the case is appealed, the key takeaways from these attorneys and law firms are:

• Make sure that stockholders are given relevant information when having them approve decisions involving conflicts of interest.
• Compensation committees should ideally be comprised of directors that don't have a conflict of interest.
• If compensation for a controlling stockholder is unusually large, it should ideally be negotiated, benchmarked, and in service of company objectives.

None of this is new to competent corporate attorneys, but this case provides a high-profile reminder of how Delaware corporate law works.

These takeaways are more likely to be relevant for large companies like Tesla, because most early-stage startup founders aren't giving themselves above-market compensation. In addition, litigation about compensation is very uncommon with early-stage startups, unless there's a scheme to defraud investors or co-founders. This is in part because litigation can easily kill an early-stage startup, which would be counterproductive for stockholders.

We're excited to announce a new partnership with Pulley, one of the most popular equity management solutions for startups. Thousands of startups use Pulley to create cap tables, secure 409A valuations, and access essential tools for equity management. Pulley is the top-rated cap table solution on G2 and is used by more than 70% of each Y Combinator batch.

Starting today, you'll be able to automatically create a cap table for your startup on Pulley using information from Clerky. Your cap table on Pulley will also automatically update as you issue more shares, stock options, safes, or convertible notes on Clerky.

As a startup attorney, I’ve seen firsthand the challenges startups have with cap table management. Pulley is one of the most popular cap table services with our startups, so we're thrilled to be making it easier for them to get set up on Pulley.

‍

‍Darby Wong — Co-Founder and CEO of Clerky

‍

In 2011, I was in the same Y Combinator group as Clerky. The founders personally helped me set up my company quickly, saving me thousands on legal fees. I've used Clerky for every company I've started. It's not surprising that Clerky has become the default for so many companies today. I'm excited for Pulley to partner with Clerky and make it easier for more founders to start and scale.

‍

‍Yin Wu — Co-Founder and CEO of Pulley

‍

To get started, go to the Integrations page for your startup's team on Clerky. Then just go to the Pulley integration and click Install. Once you've connected your Clerky account, Pulley takes care of the rest, syncing your data and setting up your cap table.

That's not all! If you don’t already use Pulley, you'll get 15% off your first year when you sign up through this integration.

We’re excited to work with Pulley to make life even easier for startup founders. This new integration means that Clerky startups will be able to use Pulley's advanced equity management tools without the repetitive data entry. We hope you'll enjoy using it!

We're excited to announce an enhancement to our partnership with Mercury (plus a limited-time offer) that will significantly reduce stress for non-US startup founders — and even some US founders!

If you're a new founder and someone agrees to invest in your startup, you may need to quickly set up a new corporation and open a bank account. Naturally, you want to close the investment as soon as possible.  Or maybe you're in a little less of a rush but still need to accept payments or pay employees soon.

Clerky has always made it easy to set up a corporation so you can get the first step done quickly.  We've also long partnered with Mercury and others to make that second step, opening a bank account¹, as easy as possible.  Trusted by more than 100,000 companies, Mercury lays the groundwork for ambitious companies to operate at their highest level with banking and credit cards engineered for the startup journey. With an intelligent banking platform powering their operations, founders and finance teams can efficiently store, manage, and move their funds while driving smarter business decisions. And with access to notable investors, operators, founders, and resources, startups can better navigate the obstacles of company building.

But sometimes startups encounter a roadblock when trying to take this second step. In order to open a US bank account, you generally need to get an EIN from the IRS.  If you have a US taxpayer ID, you can probably get an EIN online in just a few minutes.  But if you don't have a US taxpayer ID, you'll need to apply by fax.  Sometimes you'll need to apply by fax even if you do have a US taxpayer ID.  The problem is that the IRS can take months to assign EINs via fax, which means it could take months to open a bank account.  That's bad news if you have an investor waiting.

To fix this, we're teaming up with Mercury so you can open a Mercury account while waiting for the IRS to assign your EIN.  Clerky startups can now start applying to Mercury through Clerky right after applying for an EIN!  This means you can potentially start banking within days of incorporating.  No more stressing about when the IRS is going to get back to you. You can now start closing investors, accepting payments, and hiring people in days, not weeks or months.

One more thing — for a limited time, Mercury is helping cover a portion of incorporation costs by offering $1,000 in cash to Clerky startups that open accounts and deposit at least $20,000!² This offer won't last forever, so if you're interested, get started today on Clerky.^‍