We always advise serious entrepreneurs, especially those with big ideas, to make sure an attorney is part of their team from the very start. Not only can they set the company up correctly, they can put standard agreements in place (e.g., stock option, non-disclosure, founder buy-sell, independent contractor, and more). Having such documents can help prevent a multitude of legal issues as the business grows.
Read this article at BusinessWeek to see potential problems for Facebook when a probably “bad” agreement comes back to haunt them when they are really worth something.
Saving money as a startup is usually ingrained in entrepreneurs and spending money on attorneys is not uppermost in their mind (and many have a poor impression of them anyway). But the right attorney is one person on your side to help with the above mentioned items, as well as company valuation and structuring the right deal for investors. They are your best protectors of value and assets, and one business “friend” you can count on.
You will find that many attorneys may strike a deal with you to ease the cash flow burden as you startup with a variety of offers so long as they believe in your potential as a company. Deals can include taking a small stock option in return for delayed fees, and/or delaying fees until you have raised money. Once part of VentureStart we can sometimes recommend regional attorneys to you.
