A Startup Lawyer Can Keep a Startup Afloat
A startup company most commonly refers to a newly created, technology-oriented or ecommerce-oriented company in the earliest stage of development. Startup companies are usually concerned with product or service development, capital building, and market research. They tend to lack the resources to do much else until they’ve moved beyond the startup phase. This dearth of resources and abundance of difficult-to-accomplish goals makes starting a new company incredibly challenging, but a startup lawyer can help clarify the process and facilitate taking important legal steps such as protecting intellectual property rights, negotiating the terms of start-up capital, and forming a corporation.
Often the value of a startup is based on its intellectual property. Therefore it is important for technology-oriented startups to develop a sound strategy for protecting their intellectual capital as early as possible. Intellectual Property (IP) refers to the creations of the mind including literary and artistic works, discoveries and inventions, and symbols, names, and images used in commerce. Under the various branches of IP law, such as copyright, patent and trademark law, owners are granted certain exclusive rights to enjoy varying degrees of control for specified time periods over these various intangible assets such as the rights to buy, sell, lease, and otherwise exploit the asset. It is not uncommon for those launching a startup to neglect protecting their IP. A startup lawyer can help make sure this doesn’t happen, or if he or she is consulted after it does happen, can remedy the mistake before it becomes costly.
Every successful startup needs funding, which typically happens in several rounds. Initially, a startup is usually funded by its founders. However, this rarely generates enough initial capital, so the founders may bring in angel investors, venture capitalists, or other seed funding firms for help. A startup lawyer can help clarify this process and protect the owners’ interests in negotiating these deals. It is important to note that startups are subject to the same regulations as a more established corporation. From the day a business is started, it must comply with the applicable business laws and regulations which may include areas such as advertising law, employment & labor law, corporations and tax law, finance law, privacy law, intellectual property law, and environmental regulations. Early growth requires understanding and overcoming what can be significant regulatory hurdles, and legal counsel with startup expertise can be invaluable as these early stages.
Hiring a tech lawyer or startup law firm that is savvy about all the risks and precautions a new business needs to consider can seem like an expensive and overly cautious measure. But in all but the rarest of cases, it is an investment that no successful business with important IP will ever regret.