These two things never go together:
1) Ambitious startup founder with growing revenues and big exit ambitions. “Someday this will be worth millions.”
2) No lawyer or “some lawyer I know” who isn’t focused on working with early-stage tech companies.
Sure, if you’re building a small business that won’t be big someday, legal hacking using Google or legal tech tools will probably work.
But if you are creating a serious startup that has any of these characteristics, you need savvy startup legal help in the beginning:
- Angel investors
- Stock options
- Seed or VC investors
- Customer contracts
- Trademarks and technology property protection
- Selling your company
- The hope of selling your business for a big prize someday
- More than a few employees
I didn’t say expensive or stuffy legal help.
I said savvy legal help–lawyers who are experienced with tech startups and the growth game this month. They speak startup.
Most startup law firms have very economical starter packages for new startups. Some will defer your payments.
It’s a red flag when I founder talks about growing a valuable business “worth millions” someday and they don’t have an experienced startup legal advisor making sure the right things are getting done right.
“But we’re all friends now, so we don’t need a lawyer.”
Nope. It’s funny how friendships and handshake deals get forgotten when there is big money involved.
And generalist lawyers at both big firms and small firms don’t know the realities and details of the startup growth game like the specialists do. They don’t speak startup.
The best startup lawyers offer superb advice and therapy for founders too. This is gold for founders.
And founders need to learn a few things about working with tech lawyers to make it an efficient investment in your company, not a frustrating expense.
“Who’s your lawyer?” reveals a lot about the future value of your company.
If you have a bad legal foundation when you start, it’s either going to kill you or cost you a lot later. I have seen both happen.
What other recommendations or experiences do you have about working with startup lawyers?