Quick Compliance Kit: What Media Startups Should Ask Before Hiring a New CFO or EVP

Hook: Hiring a senior exec without compliance homework costs startups — fast

Hiring a high-profile CFO or EVP can feel like hitting the accelerator: new capital conversations, studio deals, and distribution partnerships on the horizon. But the same hire that fuels growth can also expose a media startup to hidden legal, tax, IP, and regulatory risk. In 2026, with courts and state legislatures narrowing non-compete use, auditors asking tougher questions about stock grants and valuations, and AI-driven content creating new IP ambiguity, media founders must run a focused compliance due-diligence sweep before they sign the offer.

The most important things up front — the executive compliance checklist in one view

Start here: if you only run five checks, make them these. They prioritize risk that can derail deals, raise regulatory flags, or cost you ownership of your content.

1. Background and regulatory checks (criminal, civil, sanctions, FINRA/SEC/OFAC)
2. Non-compete and prior-contract analysis (enforceability and release)
3. IP and work-product assignment (pre-existing works, moral rights, Generative AI tools)
4. Equity structure and vesting economics (409A, tax elections, acceleration)
5. Disclosure & financial controls (SOX-lite, related-party policies, whistleblower)

Why this matters in 2026 — trends every media startup should use to prioritize

Recent months (late 2025–early 2026) accelerated three trends that change how you hire senior finance and strategy leaders:

• Tighter state regulation of non-competes. More states have limited enforceability and added notice or salary thresholds. That means a non-compete you thought would protect your business may be void in the candidate’s home state or untested in a key market.
• Greater scrutiny on equity accounting and 409A valuations. Auditors and investors now demand clearer fair-value documentation for option grants to C-suite hires; sloppy grants lead to restatements and tax exposure.
• IP ambiguity around AI and content creation. AI-driven content and machine-assisted works complicate assignment; without explicit assignment and disclosure, ownership of new content or training data can be contested.

Step-by-step due-diligence timeline (pre-offer through first 90 days)

1. Pre-offer (0–30 days)
   • Run FCRA-compliant background checks and sanctions screening (candidate consent required).
   • Request a redacted list of material contracts from the candidate (NDAs, agency deals, prior employment agreements).
   • Ask for immediate disclosures: existing non-competes, outstanding equity in other companies, material litigation, or bankruptcy involvement.
   • Order a quick IP audit: samples of recent content and written descriptions of their role on those projects.
2. Offer and close (Day 0)
   • Include express representations & warranties in the offer letter that the candidate has the right to perform and assign work.
   • Condition the offer on a close-out agreement requiring candidate to procure releases if they’re subject to prior restrictive covenants.
   • Attach a signed IP assignment and confidentiality agreement effective on day 1.
3. Onboarding (Days 1–30)
   • Implement access controls and separation of duties for the CFO: bank signatory rules, accounting system roles, and vendor approval thresholds.
   • File required tax elections (e.g., 83(b) notice if applicable) and update cap tables and 409A valuation records.
   • Run conflicts checks with major partners, advertisers, and talent.
4. Integration (Days 31–90)
   • Complete forensic review of candidate’s prior projects to confirm no third-party IP is embedded in future studio content.
   • Operationalize disclosure controls: reporting lines, related-party disclosure form, and an insider trading policy.
   • Reconfirm non-compete enforceability with counsel if the company plans to restrict post-termination competition.

Deep dive: Background and regulatory checks for a CFO or EVP

A CFO will touch bank accounts, investor data, and audits; an EVP may have commercial deals and production contracts. For either role you should:

• Run an FCRA-compliant criminal and civil background check. Follow state “ban-the-box” rules and EEOC guidance; get written consent and a pre-adverse action notice if you intend to deny employment based on the results.
• Financial checks for finance leaders. For CFO candidates include credit and bankruptcy history review where allowed by state law; it’s a red flag if a candidate has unexplained bankruptcies or judgments.
• Regulatory and securities screening. Screen for SEC, FINRA, and regulatory actions — especially for CFOs with past public-company roles or private-fund experience.
• Sanctions and PEP checks. OFAC and Politically Exposed Person screenings are increasingly required by investors and fintech partners.
• Employment and education verification. Confirm titles, dates, and responsibilities with past employers — not just resumes.
• Social and public communications review. Keep it targeted: material reputational risks and conflicts rather than invasive personal profiling (privacy and discrimination risk).

Non-competes and restrictive covenants — what to ask and how states differ

Ask early and document everything. Non-compete enforceability is no longer a safe bet.

Key questions to ask the candidate

• Are you subject to any non-compete, non-solicit, or confidentiality obligations that would restrict your work here? Provide copies.
• Have you signed agreements assigning IP to prior employers or third parties?
• Have you executed any settlement or release that limits your ability to solicit former partners or clients?

State law snapshots (high-level)

• California: Generally hostile to employee non-competes; most garden-variety employee non-competes are unenforceable, but limited exceptions exist for sale of business or narrowly tailored agreements.
• Delaware: Will enforce reasonable non-competes that protect legitimate business interests (trade secrets, customer relationships) — common corporate law venue for startups.
• New York: Enforces non-competes if reasonable in scope and duration and necessary to protect legitimate interests.
• Texas & others: State-by-state variation; many states now require consideration or include salary thresholds or narrow blue-pencil rules.

Practical rule: Assume variability. If a candidate signs a non-compete with a prior employer, get a written release or a risk allocation in the employment agreement (indemnity for defense costs, change-in-control carveouts, or narrowly scoped restrictions).

IP assignment and rights — stop content ownership surprises

For a media startup, IP is the balance sheet. Senior hires who arrive with production credits, scripts, or ongoing content relationships create two common risks: (1) pre-existing third-party rights embedded in future work, and (2) unclear ownership of AI-assisted creations.

Checklist — IP and content assignment

• Require a signed IP Assignment Agreement effective on day 1 covering inventions, works-for-hire, and machine-assisted content.
• Get a list of pre-existing works and a license schedule: what they own outright, what is licensed, and any encumbrances.
• Ensure moral rights waivers where permitted (or a license back where waivers aren't available).
• Include explicit language on AI: candidate must disclose use of third-party models and confirm the company receives sufficient rights to commercialize outputs. See best practices for disclosing model use in creative workflows at From Click to Camera.
• Insist on representations that the candidate won’t bring third-party materials without documented licenses.

Equity grants, vesting design, and tax steps founders often miss

Equity is the core currency at startups — get the economics and mechanics right before onboarding an executive who will influence valuation, fundraising, and financial reporting.

Design checklist for equity grants

• Grant type: options vs. RSUs vs. restricted stock — choose based on stage and tax consequences.
• Vesting schedule: typical is 4 years with a one-year cliff, but executives often demand acceleration (single-trigger or double-trigger). Reserve carveouts in the plan for performance-based vesting.
• Acceleration: Prefer double-trigger (change of control + termination without cause) to avoid premature dilution but be mindful of negotiation leverage.
• Repurchase rights: Company should maintain post-termination repurchase rights at fair market or par value for unvested shares.
• 409A and valuations: Confirm a recent 409A valuation (generally within 12 months) before pricing option grants.
• 83(b) elections: Offer clear guidance and deadlines for executives who receive early restricted stock grants; missing this window can create material tax burdens.

Disclosure controls and financial integrity — SOX-lite for startups

A new CFO will expect to see internal controls, segregation of duties, and disclosure policies. Implement scalable controls early to protect your books and investor confidence.

Essential financial and disclosure controls

• Segregation of duties: separate invoice approval from bank reconciliation and check signing.
• Vendor onboarding and KYC: verify vendors, avoid shell entities, and set approval thresholds for large payments.
• Related-party transaction policy: require pre-approval and public disclosure for any transactions involving founders, execs, or major shareholders.
• Whistleblower channel: anonymous reporting and anti-retaliation protections to surface misstatements or fraud.
• Insider trading policy: blackout periods, pre-clearance, and reporting obligations for exec trades.
• Document retention & VDRs: centralize contracts and material documents in a secure data room with audit logs.

Special red flags in media hiring — things Vice’s hires illuminate

The recent senior hires at high-profile media companies show common issues startups face when recruiting industry veterans:

• Hidden agency relationships: talent-agency agreements may give agencies revenue participation or approval rights over productions. Check any prior ICM/CAA deals for residual obligations.
• Pre-existing production deals: executives moving from studios may have producer credits or profit-participation interests that can attach to new work.
• Client or sponsor exclusives: prior employer deals with advertisers or distributors may limit the executive's ability to negotiate new partnerships.
• Reputational contingencies: high-profile hires bring press scrutiny. Confirm there are no pending disputes or conduct issues that could become public liabilities.

Sample clauses & language to include in offers (practical, copy-ready lines)

Below are short, practical clauses your lawyers can adapt for offer letters and employment agreements.

Representation & warranty (pre-hire)

"Executive represents and warrants that, to the best of Executive’s knowledge, there are no agreements, ongoing obligations, or pending disputes that would prevent Executive from performing the duties hereunder or from assigning Intellectual Property to the Company."

IP assignment (day-one)

"Executive hereby assigns to the Company, absolutely and in perpetuity, all rights, title, and interest in any and all 'Works' conceived, authored or reduced to practice by Executive during the term of employment, including machine-assisted works, and agrees to execute any documents necessary to perfect the Company’s ownership."

Non-compete carve-out and indemnity

"If Executive is subject to any restrictive covenant, Executive shall promptly obtain a release. To the extent the Company elects to proceed with the employment notwithstanding such restriction, Executive shall be indemnified by the Company against costs and liabilities arising from such restriction, subject to Company approval."

Privacy, cross-border candidates, and data protection in 2026

Hiring executives who live outside the U.S. or who worked internationally requires extra steps in 2026:

• Comply with GDPR and local data laws when transferring background-check data. Use Data Processing Agreements and standard contractual clauses where required.
• Screen for export-control and sanction risks if the candidate dealt with international content distribution or covered sanctioned regions.
• Consider immigration steps and tax residency impacts for remote or hybrid execs.

AI, content generation, and how to protect studio IP

By 2026 every major media workflow uses AI. Contracts must reflect reality:

• Require disclosure of AI models used and confirm commercial rights to outputs.
• Clarify training-data obligations: the company should not inherit models trained on proprietary third-party content without licenses.
• Build a policy that flags potential copyright or paparazzi-style privacy issues before public release.

Real-world example (anonymized case study)

Scenario: a mid-stage media startup hired a former studio EVP with a significant production track record. Post-hire the company discovered the EVP had producer credits tied to a previous studio that included profit participation in future exploitations. Because the startup had not required a pre-offer contract list or a signed IP assignment, it faced a potential claim that the start-up’s first original series incorporated encumbered elements. The fix required a costly settlement and a reallocation of the show rights.

Lesson: insist on a pre-offer contract inventory and enforceable assignment language — and require the candidate to obtain releases for any encumbered material.

Practical templates & tools — start your compliance kit

Use these items to build a hiring compliance kit in 48–72 hours:

1. Pre-offer disclosure form (non-competes, ongoing obligations, litigation)
2. FCRA-compliant consent form for background checks
3. Short-form IP assignment and confidentiality addendum for day one
4. Equity grant summary template (vesting, acceleration, tax note)
5. Disclosure-controls checklist for CFO onboarding (bank signers, audit trail)

Actionable takeaways — what to do this week

1. Update your offer template to require a contract inventory and day-one IP assignment.
2. Run FCRA-compliant background and sanctions checks on finalists before the final interview round.
3. Ask candidates for a written disclosure of any restrictive covenants and get counsel to assess enforceability in relevant states.
4. Confirm a fresh 409A valuation is available before issuing option grants to an exec — or defer grant pricing to a post-close valuation if needed.
5. Create an AI disclosure clause for content workflows and attach it to the employment agreement.

When to bring in outside counsel or specialists

Escalate to a specialist if any of the following occur:

• The candidate is subject to a recent or likely-enforceable non-compete that could limit core business activities.
• The candidate has outstanding profit-participation agreements or production credits tied to a prior studio.
• There’s potential cross-border data-transfer risk, sanctions exposure, or major tax-residency complications.
• The equity grant will trigger complex tax consequences (large accelerations, early-exercise structures, or RSU-heavy packages).

Final checklist — the Compliance Kit one-pager

• Background & sanctions screening (with consent)
• Written disclosure of non-competes & contracts
• Day-one IP assignment & AI disclosure
• Equity mechanics & 409A confirmation
• Financial controls & related-party policy
• Vendor & talent conflict checks
• Whistleblower & insider-trading policy

Closing — protect growth by hiring with discipline

In 2026, media startups win by moving fast and protecting their IP and balance sheets. The right CFO or EVP can be a transformational hire — but only if you remove the compliance landmines first. Use the checklist above as a minimum standard, press for written disclosures, and build day-one controls that scale. The cost of skipping these steps is not just legal fees; it’s lost content ownership, compromised fundraising, and reputational damage that can set your studio back years.

Ready to close your next senior hire without the surprises? Download our free Compliance Kit template, or schedule a 30-minute review with a seasoned startup employment and IP attorney through legals.club — get the contract language, checklists, and a state-specific enforceability memo you need to hire confidently.

Related Reading

• From Click to Camera: How click-to-video AI tools speed creator workflows
• Observability for Edge AI Agents: compliance-first patterns
• Legal & Privacy Implications for Cloud Caching in 2026
• Analytics Playbook for Data-Informed Departments
• Quick Wins for Small Biz Branding: VistaPrint Bundles That Stretch Your Marketing Budget
• Pitching a Graphic Novel for Transmedia Adaptation: A Template Inspired by The Orangery’s Playbook
• Creative Inputs That Boost Video Ad Performance—and Organic Rankings
• Legal Risk Checklist: Scraping Publisher Content After the Google-Apple AI Deals and Publisher Lawsuits
• Teaching With Graphic Novels: A Template to Design Lessons Using 'Traveling to Mars'‑Style Worlds