Startup Lawyer – Startup Counseling for Entrepreneurs and New Emerging Companies
Choice of entity, filing required documents, raising capital, tax considerations, compliance issues, and other external matters require attention to detail and careful business planning. Internally, you need to ensure that you properly structure the formal relationships among executives, directors, stakeholders, key employees, and other participants.
At Walsh Banks Law, our startup lawyers have decades of experience offering advice and counsel for startups and emerging companies. We have in-depth knowledge of the legal requirements at the federal, state, and local level, so you can feel confident that your startup is built on a sturdy infrastructure.
Our attorneys also assist with the agreements and covenants necessary to formalize the relationships between stakeholders, founders, and key employees and help guide you through the entire life-cycle of your organization. We serve entrepreneurs and new emerging companies in Orlando, FL and throughout the Central Florida area.
Launching a startup company? We can help! Our lawyers understand the unique legal needs startups have. Our attorneys are seasoned veterans working with entrepreneurs in fast paced business environments. Let us handle the legal issues so you can concentrate on growing your business. Give us a call and find out how our legal services can help your business succeed (407) 259-2426 or Schedule a Consultation
Startup Counseling Services for Entrepreneurs and New Emerging Companies
At Walsh Banks Law, our lawyers take the approach that every startup has enormous potential. New emerging companies face unique issues that must be addressed at the same time stakeholders are relentlessly working to scale the company. Plus, a startup company faces these important challenges at a time when every penny counts. A startup lawyer can help with the necessary legal tasks, ensuring you can focus on building your new company.
- Legal entity selection and business formation.
- Structuring founders’ agreements and key employment relationships, outlining ownership, contributions, and responsibilties.
- Negotiating, preparing and reviewing business contracts and agreements with stakeholders.
- Advising on stock distributions and securities regulations.
- Advise on commercial finance matters; such as, IPOs, and other strategic investment avenues, and help negotiating investment terms and conditions.
- Implementing strategies to safeguard and leverage intellectual property
- Implementing strategic joint ventures
- Resolve contract disputes, and litigation avoidance and management
- Provide guidance and representation related to corporate law and governance.
- Act as general counsel for day-to-day legal matters
Our startup lawyers and business attorneys are dedicated to providing legal services that are custom-tailored to the needs, goals, and priorities of your startup.
Differences Between a Startup Company and a Small Business
In general, a startup company is formed for a distinct purpose. Usually, that purpose is to provide a product or service that is not being provided in the market, or solves a problem in the market. They are intended to prove a concept is valid and scalable. Startups have a fast growth entrepreneurial mindset. They often disrupt the market they are in. Uber, Google, Yahoo, and even Microsoft, were all startups. These types of companies, due to their cutting edge and disruptive nature, have a high rate of failure.
A small business, on-the-other-hand, generally, is setup to provide products and services that have already been proven in the market place. They are often privately held family businesses. They are established to provide income right away, and then build gradually and sustainably. The Small Business Administration further defines what a small business is based on the industry it is in. They do this to determine which companies are eligible for federal grants, funding, and contract preferences. For our purposes we will stick to comparing them to a startup company.
Beyond these generic definitions, there are many other factors that make the two different including:
The primary focus of a small business is generating profits and ensuring longevity for the company. Stakeholders seek to build a strong financial base, establish credibility, and develop a quality reputation with customers.
A startup company is motivated to attain maximum revenue and growth potential in the short term. They want to prove there is a market for their product or service and that it is scalable. The risks are much higher given the time frame, considering that the point is to create a organization dedicated to developing a repeatable strategic model that disrupts the relevant industry and produces large returns for its investors. Think Facebook, and the returns its early investors garnered.
Funds and Financing:
Because stakeholders in a startup and small business have diverging views on growth, their approach to financing is also very different. Those creating a small business may invest their savings, or the entity itself may take out a loan. However, the need for funds is much more extreme for the objectives of a startup. Angel investors, venture capital firms, partnerships, and even crowd funding may be the source of funds. Under some circumstances, startup financing may even come through an initial public offering in the securities markets.
Many owners view their company as their lifeblood, a legacy they want to pass down to family members or individuals they know and trust. Others may take the view that selling the company off for a hefty profit is their version of success. Though it may not actually live on eternally, the perspective of an owner is that operating the organization is a long-term plan.
By its nature, the startup is a temporary organization. Once the entity disrupts the market, hits an established distribution volume, or reaches certain trigger events as intended, stakeholders will begin working toward the agreed-upon business wrap up. The exit strategy will have been negotiated and bargained for when kicking off the company. From the point of view of investors, the startup’s termination should provide some positive return on investment to be a success.
Avoid Common Startup Legal Issues
Once you know the key differences between a startup company and a small businesses, you can see that you face a good number of challenges that other types of business do not have to face. A knowledgeable startup attorney can help you navigate common startup legal issues.
Considering the fact that investors in a startup have certain expectations, you should be clear in setting the parameters of the startup arrangement. You may be limited in terms of bargaining power, but you should firmly establish various factors when crafting the details. A startup lawyer can protect your interest when it comes to:
- Ownership interests
- Delegation of responsibility
- Vesting of stakes in the startup
- Voting power
- Removing key stakeholders
- Many other details.
In addition, you should note that the dynamic may change as the startup progresses. It is important to have solid contractual terms in place for future hires and partnerships, so that the startup company’s infrastructure remains intact.
Prompt, Effective Entity Formation:
Careful assessment of the most suitable business structure is crucial, particularly when liability, taxes, and efficient exit strategies enter the picture. It is better to choose the right fit from the start than to transition from a partnership to some version of a corporation, limited liability company, or other arrangement.
Federal securities and state blue sky laws are so complex that many startup companies do not even realize how and when they violate them. Failure to comply with the vast regulatory scheme can lead to devastating fines, legal penalties, and even criminal sanctions. A startup lawyer knows the rules regarding disclosures, filings, and forms.
The importance of proper documentation and adherence to startup policies increases as the organization gains momentum. With expansion comes serious issues relating to employees, investors, and corporate responsibility. You cannot afford risking litigation if you overlook:
- Stock rights and options
- Filing and compliance related to bylaws and articles of organization
- Restrictive covenants and confidentiality agreements
- Employment contracts
- Benefits issues
- Other details that relate to operating any company, including a startup.
Many startups involving technology recognize the importance to protect their intellectual property. However, all startup companies must be cognizant of the relevant issues, the value of trade secrets, and implications of proprietary information. A wide range of complex legal doctrines affect your intellectual property and, as a startup, your work IS often the value. Protecting intellectual property and ideas should be a core focus of operations. It is a huge mistake to glaze over intellectual property terms when working with stakeholders, partners, investors, and others.
Complying with tax laws is a trying task, but it is not enough to simply adhere to the Internal Revenue Code. Startups must also endeavor to seek out tax advantages that will offer benefits and reduce liability down the road. Some of the more common tax issues affecting startups include:
- Determining the most beneficial corporate formation for filing
- Properly filing sales and payroll taxes
- Complying with IRS guidelines securities, stocks, and stock options
- Elections, including when to pay taxes on income
- Taking advantage of incentives that apply under tax laws
- Many other tax matters.
Why Hire a Startup Lawyer
Although there is no legal requirement to leverage an attorney when starting a company, including a startup. You do, however, give your startup enterprise a greater chance of success by retaining a knowledgeable startup attorney. A lawyer gives you peace of mind knowing that essential tasks are being handled efficiently, properly, and legally. Your own financial resources – and the contribution of your investors – are in good hands if you have skilled legal counsel from the outset. The investment may seem considerable at the beginning, but it is worthwhile when you know you are saving your enterprise time, money, resources, and legal troubles in the long run.
A startup lawyer benefits your organization goals and adds value to your enterprise in many ways, including:
- Taking the lead in negotiations with investors
- Drafting proper organizational documents
- Advising you on tax matters
- Minimizing risk of liability in connection with employees, contractors, and other partners
- Negotiating, reviewing contracts and preparing business agreements;
- Protecting intellectual property, including trademark, copyright, patent, trade secrets, and other rights
- Other tasks.
Most importantly, retaining an experienced startup lawyer ensures you can devote the time and resources necessary to promote your objectives. An attorney will make sure you focus on the most important matters, so you will not be distracted by the details.
Schedule a Consultation with a Startup Lawyer Today
A solid infrastructure is critical to any organization, but a strong foundation is even more important, considering the unique challenges involved with a startup company. It can be tough taking on the essential legal issues when you are also trying to achieve such demanding goals.
For more information on how we can help you with the groundwork, please contact Walsh Banks Law by calling (407) 259-2426 or Schedule a Free Consultation. Our startup lawyers are happy to conduct a free consultation to talk about your objectives, ideas, and legal options.