When starting a new business, planning for potential legal issues is essential. The last thing you need to be focusing on is damage control, particularly if you have a brilliant, game-changing idea that could be a thriving business otherwise.
To find out how to make sure your crazy startup idea isnât going to get you into hot water, we asked members of the Young Entrepreneur Council, an invitation-only organization comprised of the countryâs most promising young entrepreneurs, the following:
âWhatâs one valuable tip youâd give an entrepreneur with a disruptive technology/service to prepare for legal problems down the road? â
Hereâs what YEC community members had to say:
1. Consult With an Attorney
âEntrepreneurs should consider consulting with an intellectual property attorney while they are developing their products to avoid potential legal disputes. By doing so, they can possibly navigate around intellectual property battles instead of having to fight them.â ~ Doug Bend, Bend Law Group, PC
2. Build an Army of Engaged Users
âIf youâre small, the existing institutions will fight you on their turf with lawyers and lobbyists. The easiest way to disrupt entrenched interests, such as unions and trade associations, is to bring the battle out into the open. Acquire and engage a passionate user base, and it will take on the old industries for you.â ~ Neil Thanedar, LabDoor
3. Put Together a Legal Team
âGet a high-quality legal team in place. Traditional industries are fighting back hard against new innovations, and if you donât legally prepare in advance, you might struggle before you ever make it out of the starting blocks.â ~ Andrew Schrage, Money Crashers Personal Finance
4. Donât Over Plan Around Legal
âDisrupting old industries is inevitably going to cause some type of legal or regulatory challenges. You canât avoid it, and you canât plan around it. But donât let the future threats of legal issues prevent you from building your company at the start. If you build something awesome, then youâll have a reason to fight, but start with the building something awesome first.â ~ Eric Koester, DCI
5. Invest in Legal Support
âIf youâre going to disrupt the status quo, itâs critical to know your rights, legal precedence and regulations that you may need to fight. Donât go into this blind â" even if you have legal training. Focus on the growth of your business, and hire a legal team that can research and fight for you. â ~ Kelly Azevedo, Sheâs Got Systems
6. Invest in Liability Insurance
âAlthough it may not keep you out of court in our litigious society, a general business liability insurance policy may mitigate your exposure when you end up there. Even though most people know that insurance can protect them from personal injury and property damage claims, it can also cover claims of false or misleading advertising for startups, including libel, slander and copyright infringement.â ~ Peter Minton, Minton Law Group, P.C.
7. Include Board Members
âIf you know you are gearing up for a fight, I would look to include board members who are either lawyers or have been closely associated with other companies that have had similar legal situations.â ~ Sam Saxton, Salter Spiral Stair and Mylen Stairs
8. Use Patent Lawyers to Protect Technology
âDisruptive technology from a small company attracts attention from larger companies with confidence in their legal budgets. Expect patent infringement and appeals to your patents as larger companies try to outlast your legal resources. Choose a patent attorney who is well versed in every legal protection possible and will apply for every patent you need before the technology is publicly known.â ~ Jay Wu, A Forever Recovery
9. Hide Under the Radar and Make Allies
âIncumbent companies will do whatever it takes to protect their market shares and interests to the point where theyâll find ways to sue you just to throw a wrench in your wheel. Itâs best to stay below the radar while youâre getting your business in order, gathering funding, etc. During that time, look for large strategic partners that might benefit from your entry, and get them on your side. â ~ Andy Karuza, brandbuddee
10. Be Prepared
âAll entrepreneurs should assume that they will encounter some sort of legal issues once they start showing success. To combat these legal issues, start preparing immediately. Before you launch, you should perform your due diligence and create a list of all foreseeable legal situations. Review these with your lawyers to develop strategies to defend against or prevent these issues. â ~ Kevin Tighe II, WeBRAND
11. Build a Relationship With Your Lawyer Now
âBegin building a great relationship with your lawyer before the legal issues arise. You need to be comfortable with their communication styles, confident that they wonât run up the clock unnecessarily and assured they understand that ultimately they are the advisors, and you call the shots. â ~ Michael Simpson, DJZ
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