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StartupLegalandIP
JoelEspelien
TheFounderIns8tute
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Whatisthelaw???
1. Explicit(Federal,State,foreignstatutesandregs)
U.S.taxlaw&patentlaw,Delawarecorporatelawetc.
Highdegreeofcertaintyforobviousthings
2. Commonlaw(courtdecisions)
Mediumdegreeofcertainty.Neverasmuchasyouwant.
Ex.Isanon-competeenforceableinstateX?
3. Privatelaw(contracts)
Whateveryouandtheotherpartyagreeto,aslongas
notcontraryto#1and#2
TermsheetforaVCinvestmentDailylifeislivedin3,withoccasionalreferenceto1&2
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3roleslawplaysinstartups
1. Constraint(Thoushaltnot)
Oenobvious,butevenwherenot,resultisobvious
2. Guide(Thoushould) Wellwornpathsreducerisk
Avoidhaironyourdealthatkillsopportuni8eslateron
3. Value-add(Thoucould)
Clevercontracttermthatgivesyouanadvantage
Taxelec8onthatsavesyoumoneywhencompanyissold
Patentthatissuesjustasyourcompe8torovertakesyou
Oeninvolvesplanningahead(oops)
Lawisanecessarybutnotsufficientcondi
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Theelephantintheroom
1. Youarenotyourcompany2. Yourcompanyisacreatureofthelaw3.
Yourcompanyhasalifeofitsown.Itwantsto
surviveanditwantstoprotectitself(evenfromyou)
4. Legaladvice=whatisbestforthecompany(notforyou)
Comingtotermswiththisishardformanyentrepreneurs
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KnowThyself
1. Howtrus8ngareyou?2. Whatisyourappe8teforrisk?3.
Howtransparentareyou?4. Canyoutakeadvice?5. AreyouaDIY?6.
Canyouputthecompanyfirst?
Mostmistakesarebothpredictable&avoidable
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KnowThyCompany
1. HowimportantisIP(really)?2.
Whatisthefundingstrategy(really)?3.
Whatistheexitstrategy(really)?
Duediligenceislikevolunteeringforataxaudit(really)
