In order to develop, commercialize and capitalize your startup, there are a number of legal factors and issues related to funding, compliance, employees, owner structure and IP rights that you should consider.
An idea – and a great one at that – could be an opening in the market, an unseen potential or a specialized need. These ideas are what startups and established businesses are built on.
In order to develop, commercialize and capitalize your idea into a startup, it is vital that you have the right team, that the team is "on the same page", that you have considered how to protect your idea, product, or trade secret and other major factors, where the funding should come from and on which conditions.
Many legal issues arising from managing and running a business can be met at an early stage if these are thought in at the beginning. Prioritizing legal counsel early may also be vital to your business in the long run.
In our experience, there are a number of different issues that any company, and in particular startups, should focus on.
As the company develops, so do the founders. Some may decide to leave and others may join at a later stage. It is also important to match one's expectations to workload and tasks. Therefore, it is vital that there is a shareholders' agreement in place at an early stage, which regulates the relationship between the co-owners.
Intellectual Property Rights, such as patents, trademarks, copyrights and goodwill, are all that of a company that are worth a lot but are hard to touch and feel. Protecting and enforcing intellectual property rights may be paramount if the business is built on an invention, and choosing the right trademark strategy will give the business the brand recognition that is needed.
A big challenge for many startups is funding the business. Often, investment comes from public innovation centers, venture funds and participation in accelerator programmes, which may be one of many funding opportunities.
The team is one of the most essential conditions for a startup to be successful, and is central for external investors' likelihood of investing in a particular startup. It is therefore important to ascertain that the relevant contracts between the business and its employees are in place. These may take a number of different forms – a business may decide to hire a freelancer, only hiring on limited contracts or that salary will be in the form of equity.
In many businesses, 20 % of the customers make up 80 % of the turnaround. For startups, this equation may be even more outspoken, which emphasizes the importance of contracts and terms and conditions being in place.