The Episode In 60 Seconds
There are 5 legal areas every startup should have covered:
- Have a clear agreement in place of how the departure of a co-founder would be handled.
- Critically look at shareholders agreements and make sure you understand the implications in case of an exit.
- Make sure that any IP produced for you by a third party will also belong to you.
- Always read contracts before signing. In the B2B business, there is no 30 day return policy.
- Ensure liability caps on sales contracts in case your product causes unintentional harm to your client.
- Be aware of how tougher privacy and data protection laws affect you and your business model.
- Know which sectors you need special licenses for.
- Make sure your employee contracts contain a provision for IP created by employees.
- Sign any employee contract by hand.
- Consider employee stock option plans.
- Software is usually protected by copyright rather than patent law. The only way to effectively protect your code is by not disclosing it.
- For hardware, be aware of existing patents and consider patenting yourself.
- Consider protecting your company name if it is crucial for your business.