It comes as no surprise that Founders don’t often have legal on top of their minds when starting up – there is just too much to do and too little time, and legal falls to the bottom of the priority list as a result.
But think of it this way: Making the early investment to lay out right legal fundamentals will later serve as an accelerator that fast tracks processes as your startup hits newer milestones. Think:
You don’t want to lose out on a potential candidate while you scramble for an Employment Agreement and work out how shares should be vested.
You don’t want the freelancer you engaged to claim ownership over the intellectual property you paid him to create.
You also don’t want your beer buddy to think he owns 50 per cent of your company because he threw out some ideas when you had one drink too many…!
As funny as this may sound, there are real cases like this that have caused fundraising discussions to stifle. You can never afford to be too careful, too diligent, or too prepared up front.
Photo credit: The Working Capitol
She reminds members:
1. Put in place a Shareholders’ Agreement to set out rules and expectations around key decision-making such as the transfer of shares.
2. Use the right legal documentation to protect your intellectual property and confidential information when you engage consultants, employees and partners.
Minimising legal risk doesn’t have to be daunting! If you’re not sure where to start, take our free Legal Health Check to find out how you can better protect your business.
Dragon Law brings Open Office Hours to TWC members once every month! To discover the benefits of co-working and their brilliant community, book a tour or swing by 1 Keong Saik Road at 10:00am or 5:00pm, Monday to Friday, to join their guided tours and redeem your free day pass.