Conceiving an idea is easy, and if you are good at writing codes, you might be able to spin out your idea in a minimal version for testing within days or weeks. But, the simplicity of starting and running a business is not that easy. It’s a long bumpy road that attracts vultures and land mines, ready to feed and blow you up in a blink.
The success of your startup depends on some many things, quality legal advice and protection must be on that list.
The world is full of lessons from both successful and failed entrepreneurs, on how they lost their companies, some due to their own negligence, others of no fault of theirs, after-all a domain name is cheaper than legal advice.
Here is why your startup needs a legal adviser on the team.
Your trademark is an asset:
Earlier in 2019, the word, FUNTIME became a cause for serious litigation. agreed, this is a word commonly used without restricting, however, the rights belonged to a company in Hong Kong.
Imagine the word ”BACKYARD”, this caused Walmart $50M in total for failing to listen to their counsel who advised them against the use of the word despite been used by another company as stated in Variety Stores, Inc. v. Wal-Mart Stores, Inc.
The protection you enjoy from the counsel of your lawyer will save you now and in the long term.
Registering your name, logo or icon is a must under the direction of your attorney. Not every company can survive a million naira lawsuits which could drag for years without success.
Ask yourself, will you save yourself now or sink later. A legal adviser on your team will help you navigate the trademark maze.
Your Company Structure
A good lawyer knows one thing, how to protect their clients.
The way and manner you structure your company will determine who has the power to fire you. One grave mistake to make is to leave yourself unprotected in structuring your company.
Putting CEO, Co-Founder, Founder or any other suffix after your name or, prefix before your name can not protect you. One of the reasons founders get fired from their own company is because they gave up too much of their powers to investors in exchange for money.
In 2006, Andrew Mason started a company called Groupon, and by 2010 the company’s revenue had increased to $800m. Although this was followed by an offer for acquisition from Google, he was subsequently fired.
Firing of founders from the company they founded is not only restricted to structuring, in the case of Andrew Mason, after turning down a $5.3billion offer from Google, going public, the shares fell, he was considered no good to the company anymore.
The structuring of your company can definitely protect you, but, when the stakes are high, get your self a fat payout.
Raising capital comes with a cost and its a share of your control over the company you just started.
The sense of giving up control over something you love so much could be frightening. That is why you need a lawyer on your team. To help you make the right and legal decisions for when all the chips fall.
Raising funds is like a marriage, sweet and full of love when you get into it, but can go south within months. An investor will give you money to run your company and make it a success for a seat on the board and a certain percentage of your equity. This marriage is a long one, that could weigh you out if care is not taken or swallow you up if necessary documents needed to protect you are not in place.
No matter who is offering you money, talk to your attorney first before entering into any form or contract and have it on paper. The tendency to make money without the necessary paperwork is high especially when you are just starting out or blowing through your cash with nothing sitting in the bank.
With the increasing wave of cyber-attacks and breach of privacy, protecting your customers and those that transact with your website is important, also more important is protecting yourself against potential lawsuits that might occur.
Having the right disclosures on your site can be the saving grace, The common mistake out there is the use of template forms, content and disclosure that does not reflect your area of service.
With the help and advice of your attorney, a quality document can be drafted to protect you and your customers.
Lawsuit is very expensive and can drain your resources, it is better to prepare by retaining the services of an attorney who will guide you through the legal protection you need to enjoy a successful business life.