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Transforming an idea into a successful startup is rarely a journey founders embark on alone. A series of helping hands is necessary to establish a successful business. These may include your friends and family, investors, supportive mentors and loyal customers. Lawyers also form a vital part of this process. Without legal advice, you may incur unexpected costs or reputational damage further down the line. This article will explain three key ways founders can benefit from seeking legal advice about their startup business.
1. Setting Your Business Up for the Best Chance of Success
Successful businesses have a legally robust underpinning. Founders can establish legally sound businesses by having lawyers guide them through complex tasks and considerations. Your daily life as a founder is likely busy, and getting your business off the ground takes priority over all else. Some tasks are more complex and demanding than others. However, startup lawyers have specialist knowledge and experience. They can help you to complete many of the initial steps involved in starting a business. These can include the following:
- establishing the business’s legal structure;
- drafting and negotiating essential contracts; and
- reviewing lease agreements.
Lawyers can also advise you on your business’s best course of action. For example, they can help you understand the level of liability you will have under each legal structure.
LegalVision’s Startup Manual is essential reading material for any startup founder looking to launch and grow a successful startup.
2. Prevent Unexpected Future Costs
Many of the actions founders take, especially early on, involve essential decision-making. With each decision comes varying levels of risk. With increased risk comes the risk of legal issues further down the line. Legal disputes can be costly to resolve, especially if they involve litigation. Unfortunately, these costs can impact the viability of a business.
Besides finances, your startup’s reputation can suffer due to legal issues. Any founder will want to avoid this, especially while establishing and growing a startup. Legal issues can impact a brand’s public perception. Brand image, competitive position and reputation among customers are vital, especially for a newly established business.
The best way to avoid these risks is to consult an experienced lawyer as early as possible in your startup journey. A lawyer can advise you on the implications of your decisions, guiding you through the tricky legal landscape of the business world. The earlier, the better when seeking legal advice as a founder.
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3. Protecting Your Startup’s Intellectual Property
As you build your reputation and strengthen your business’s competitive position, your business’s intellectual property increases in value. Intellectual property includes elements such as:
- logos;
- slogans; and
- unique inventions.
Your intellectual property assets include your business’s unique identifiers and the innovative processes or inventions you use. They are intangible assets. You cannot touch or safely store them away in a locked cupboard. Accordingly, protecting them is far more complex. For example, if another business used your startup’s logo, this might dilute and damage your business’s reputation.
Key Takeaways
The three key reasons startup founders should invest in legal advice are as follows:
- it can set your new business up for the best chance of success;
- it can mitigate the risk of legal disputes; and
- a lawyer can protect your business’s intellectual property and reputation.
The cost of legal advice is often a hurdle that stalls many business owners. However, founders must be aware of the risks to their business and finances if they do not consult a lawyer. Ensuring your startup’s formation and operations are legally watertight reduces the risk of legal disputes arising in future. This has many benefits, including mitigating the risk of high legal costs and safeguarding your business’s reputation.
If you are considering founding a startup, factor legal costs into your initial budget and seek advice as early as possible. If you are already operating an established business and are yet to seek legal advice, prioritise the areas in which you could benefit from such advice. Then, set aside a budget for legal fees and find a suitable lawyer. Work from the issues at the top of the list, dealing first with those you think are the most important to your startup.
If you are a startup founder who needs legal advice, our experienced startup lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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