In this interview with CalvinAyre.com’s Rebecca Liggero, commercial and corporate solicitor Gemma Boore explains why start-ups need to nail down all legalities before getting their ideas off the ground.
Start-ups have one important task to nail down before getting their ideas off the ground: secure all legalities.
Gemma Boore, commercial and corporate solicitor at Bates, Wells & Braithwaite, said it’s key for start-ups to seek legal advice before they turn their ideas into business.
“Start-ups are going to be wanting to speak to investors and later on, the investors are going to be wanting to see [if] the business can do everything that it says it’s going to do and that it owns everything that it owns,” Boore told CalvinAyre.com.
These include nailing down contracts and making sure all intellectual properties belong to the business.
“When you’re putting in place contracts with parties, these need to be written, they need to be clear and they need to be really unambiguous. Also, any intellectual property that’s created, it needs to be ironed by the business,” she explained. “It’s OK if it’s an employee creating an IP for you, but if you’ve got a consultant, or even a director, a founder that’s not an employee, then you need to make sure that this IP belongs to the business.”
Companies that don’t have these matters secured risk not only the court’s wrath, but also getting bad publicity.
“From a legal perspective, it’s really difficult to work, to try and make everything right after the event so I’d say the risks are that you could be brought action against by somebody else for infringing their IP if you don’t have the right to use it and somebody could go to court and seek an injunction against you which obviously is really bad publicity,” Boore said. “It’s really expensive for the business. And just generally, I’d say it’s going to put the potential investors off if you don’t have everything that you think you need, then it really is going cast some doubt over how well you know your business.”
The costs for legal advices vary, but Boore said what’s important is to ask for an estimate in advance and give the legal team “really clear instructions.” And for start-ups, Boore has this piece of advice: prepare your standard terms and conditions.
“Standard terms and conditions are going to be used on a recurring basis and obviously the potential for any liability then gets huger and huger every time they’re used and if they’re not fit for purpose then you could end up being in really hot water there,” she said. “Even if you’re B2C, obviously that’s really important, but B2B businesses have things like standard terms and use on their websites, privacy policies, cookies policies, everything like that so just be really careful about standard terms and get advice if you can.”