Key Legal Considerations For Startups

Key Legal Considerations For Startups


It’s important to set up all the legal structures of your business right from the beginning to avoid running into problems going forward. If you are running a lean startup or bootstrapping your business, you can consult a business law firm or startup lawyer to help you put together the proper legal framework for your new business. This way, you will protect your business now and in the future. A startup lawyer’s advice becomes even more crucial if you intend to seek funds from angels or venture capitalists.

The simple legal consideration here is to avoid front-loading unnecessary legal expenses at the beginning. When you are ready for a meaningful launch, though, do your setup properly and  make sure the right legal structure covers everything you need now and in the future.

The basic key considerations of every startup include ownership and funding / entity formation, Intellectual property and Internal staffing / HR.  Mergers and acquisitions and Litigation will come later if you survive the first year of operation. If you intend to rely on a term sheet generator from the beginning, you can heard over to wsgr (provider of legal services for technology businesses)  for a customised venture financing term sheet.

If you intend to tackle intellectual property right from the beginning, make sure your lawyer (or their firm) has real IP experience – general practice lawyers without good tech experience may not be sufficiently familiar with the issues.

If you have received some kind of great news — your startup just got accepted to an incubator! Relax, don’t hurry to sign the term sheets yet. Before your startup signs up and cashes that $[XX,000] check, you should sit down and evaluate the incubator’s offer. The key considerations to look out for are: Pre-money valuations, Investment Structure (stock options), take a good look at the office Space and make sure you are comfortable creating a business or building a culture in that space, find out when mentorship and other benefits end and reach out to prior incubated companies.

There are countless legal resources out there for you and your education about legal structures for startups, make the most of them when you start your business. If you already own a business, you can share with us how you deal with your business’ legal framework.

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