Why You Should Talk to a Startup Lawyer Before Taking Funding
While it is often enticing to take any funds offered, the legal consequences of how you are paid can make or mar a company. To better understand your obligations after being funded, and to ensure that the startup funding you take is really in your business's best interests, it may help to speak with an experienced and professional startup lawyer.
A startup lawyer works with startups, entrepreneurs, emerging companies, early-stage companies and small and medium enterprises. The job starts with the inception, the incorporation of a legal entity, and goes on until the exit, encompassing general legal counseling all along the way.
Drafting contracts and agreements forms a core part of the services a startup lawyer provides. Advice on employee stock option plans and on setting up the equity structure among co-founders is another mainstream service startups seek from a business lawyer.
The advice a startup lawyer can offer includes:
Legal documents essential to incorporate a startup.
Choosing the proper legal entity to suit the needs of the startup.
The exact time to incorporate a company.
Drafting a co-founders agreement.
Deciding stock options among co-founders.
Determining intellectual property created by the startup.
Protecting intellectual property rights: patents, trademarks, designs, copyrights, trade secrets and domain names.
Confirming the startup's ownership of intellectual property by way of assignment agreements, employment contracts, external vendor or consultant agreements and product development agreements.
Certifying taxation compliance and tax management for startups.
Incorporating appropriate international legal entities.
Funding involves agreements about ownership, rights and obligations. Having a lawyer review them before you sign is one way to avoid taking money that costs more than it is worth.