Startup developers are creative, high-powered, and forward-thinking, but that forward thinking doesn’t always apply to legal issues surrounding their work. From contract development to the eventual development of patents and intellectual property protections, startups should be consulting with legal professionals from the start.
How can we better connect startups to lawyers? The key may be helping new innovators understand the many roles lawyers play in the business development process, as well as making the process more affordable for independent entrepreneurs.
Building Your Foundation
One of the main reasons startups struggle in their early days is there’s division between the founders. That’s why startup developers should consult with a lawyer when drawing up foundational documents, such as the articles of incorporation.
A legal adviser can help your nascent company clarify who has founder standing, who is an employee, your tax status, fundraising structure, and more. With this information in place – and legally confirmed, it will be easier for your startup team to move forward with confidence.
Another key thing that legal consultants can help your startup organize is licensure. New businesses often need a range of licenses and permits to operate and these vary by city and state. By reaching out to local lawyers, you can make sure everyone has the necessary licenses to perform their assigned roles.
Just because you’re one of the founders of a startup doesn’t mean you call all the shots. Most major companies have a board with bylaws, but startups frequently skip this step. Legal consultants won’t let that happen. They’ll assist you with the process of writing bylaws and creating an internal governance structure.
Your company’s bylaws and board structure may change over time as it grows, but your board can provide valuable advice as you develop your product and prepare it for market, especially if you can recruit more established entrepreneurs. These individuals may also be your most valuable assets for acquiring venture funding, a key step in any startup’s development.
Setting The Terms
As your startup moves into the marketplace, you’ll eventually have to develop terms of service – those detailed, fine print notices that no one but the writers ever reads. Whether or not anyone reads them, though, terms of service are legally binding and they need to be carefully laid out by someone who understands the terms.
Get a lawyer on board and talk to them about what you expect from users and the restriction on your product. They’ll know the general format and will be able to write a set of terms that conform to the standards of such a document.
If you think that legal advice is beyond your startup’s means, there are two things you should know. First, it’s not – legal advice is available at many tiers, including short-term consultancies and through legal incubators. Meeting with lawyers who are knowledgeable about startups is affordable, even for newbies.
The second thing you should know about the affordability of legal advice is that it costs more not to meet with a lawyer. What your startup stands to lose by not getting legal advice is, in fact, everything. Only carefully drawn up documents that hold up to court analysis will protect your company. Without that kind of coverage, your startup isn’t worth anything.
Startup development isn’t easy and you can’t go it alone – you need a legal team by your side. Building a strong relationship with a lawyer early in your company’s development can be a real advantage down the road. Your lawyers are as important as your business partners on your board and will keep you on the road to success. Learn to trust them, let them in on the internal workings of your business and your goals, and they will help pave the way.