ENT101: Startup Law 101: Legal Launchpad (Arshia Tabrizi)

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Arshia Tabrizi: Startup Law 101: Legal Launchpad – corporate organization, intellectual property, contracts

20121010 ent101 Startup Law 101 - Arshia Tabrizi

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MARS ENTREPRENEURSHIP 101 STARTUP LAW 101: LEGAL LAUNCHPAD ARSHIA TABRIZI @ arshia_tabrizi Partnership Tips --> MaRS Video Is this the right person to be partners with? - values - timelines - goals - roles - compensation - exit strategy Written agreement Roles & responsibilities Ownership - different - Employment needed skilset may change Okay Need something else EXIT Build in an exit strategy in case of death, disability, major disagreement Corporate Organization $750 (basic) -$1,500 (full) articles of incorporation - imited liability --> Separate legal entity - tax advantages - IP centralization --> bringing other people's ideas together - venture capital / acquisition When do you incorporate? DEFINITELY Employees/ consultants Contracts / relationships Incorporate work, Scrooge pays later Don't cheap out ! Corporate Structure Founding shares Voting rights share classes Shareholders' agreement = pre-nup always cutomized! --> Hire/finance/sell arrangements Corporate governance Board Officers Shareholder exit (Divorce, sale, etc.) pre-venture venture-ready Questions (cont'd) Q: Finding the right laywer? A: Long-term relationship, so raport & fit. Experience in the field you're in. Q: NDA for investors? A: Practically, many won't. as a lawyer, try (Esp. with angel investors, low deal flow) Q: No IP assignment document? A: Employee? Company. Consultant? Consultant. Intellectual Property Protecting your primary assets Example: Steve Jobs Patented stair design in appl stroes! Secretve & controlling Vs Lean start-up practice (Shh!) I.P. is not only about patents - trademarks - design - etc. Costs --> Definitely get a specialist $ 10-15K full patent $ 2-4K provisional patent + Prosecution & enforcement Your lwer may not look like this Trademarks --> Brand $1-2K for registration (R) 6-18 months But improper use -- rights Digital media is about brand - Research your brands! Protect your brands! Trade Secrets easy, cheap no time limit / disclosure But watch out for traps in NDAs should be mutual watch out for big companies ! sometimes they use IP assignment forms! ENT101 October 10, 2012 Notes by Sacha Chua (@sachac) Livinganawesomelife.com Contracts Legallybinding agreement Use contracts with everyone - Employees - Founders - ... - Customers - Contractors Emails, Letter of intent, Memorandum of Understanding May be legally binding, may not! You need legal reviews of LOIs, MOUs. Lawyers -- Manage nsk Protect IP $ Sell company Review agreements,etc. We are here to be paranoid. Questions Q: Pre-venture us ventures? A: Simpler takes deals etc into account Q: Cost of patent enforcement? A: Several thousands just to check if you have a claim, way more to defend Patent --> right, but you have to defend them. Q: Provisional patent vs full? Reserve that filing date, then file full after. Can have pitfalls Q: Lean startup? A: Depends on type of company, Legal perpsective, worried about incomplete Q: Demographics of ENT 101? A: Similar to MaRS--Organizer Q: Hackathon? A: if you're willing.

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