Complete DIY guide: legal basics for startups
blog.staply.co
blog.staply.co
Are there hazards to founders as they roll along in the earliest stages without the benefit of lawyer review or guidance? Of course. And those hazards lie precisely in failing to understand what needs to be done or in how to do it.
But lawyers cost money and every founder is or should be cognizant of the need to budget wisely for such costs.
So there is room for good DIY guides and services. Indeed, in today's era, DIY guides and services are great and can be valuable: one of the great distinctives of our modern startup era lies precisely in having savvy and informed founders (except for serial entrepreneurs, this was a relative rarity at or before the bubble era). So, yes, by all means, do educate yourself and do use lawyers wisely so as not to overpay or overdo the legal pieces that are secondary (albeit important) to your venture. I encourage what the author is doing here and hope it lives up to its promise.
That said, I don't believe a DIY guide should include arbitrary rules or procedures.
In particular, I disagree that a founders' agreement is an essential first step on the path toward startup launch. In 30 years of specializing in this stuff, I have seen such agreements in very few startups. They can be helpful but there are no arbitrary rules about the need to use them.
A founders' agreement is after all a formal legal document. It locks in relationships and commitments - meaning, if you agree to its terms, your failure to conform to such roles and commitments can have legal consequences. And, while that can be fine, and while it can certainly go a long ways towards limiting the hazards mentioned above that a lawyer would normally deal with, it can also be frustrating for founders to front-load legal things at a time when the venture is in greatest flux. In many cases, you can wind up trying to define in the abstract, and hence lock in, roles and relationships that are by definition still not settled.
As always, the goal is to use good judgment and common sense while educating yourself to the maximum extent possible either through DIY guides/resources or with the help of lawyers. But do not think that there is only one process for getting to the goal of a good launch. If a founders' agreement fits your needs (and if the author offers a good one), by all means use it to your benefit. If not, don't get stymied by the thought that you have failed to meet some pre-condition to launch that really does not exist.
The example given in the original post sort of proves this point. The OP makes "developing and managing of the software development" and "managing of the tasks" CEO responsibilities. It's not clear how those terms are defined, but it arguably suggests that were the CEO to focus on biz dev instead of coding or if a CTO decides to prioritize one bugfix over another without consulting the CEO, someone is now in breach of a legal agreement.
If you really are too shortsighted to pay for necessary legal advice for fundamental aspects of your business and want a DIY guide, check out the NOLO series, which is written and vetted by practicing lawyers and includes business-operational perspectives and considerations.
Thanks OP, hope you stay motivated with this!
HN would be in uproar if someone wrote a blog saying - hey you don't need a CTO to launch your tech startup, just read my blog on Visual Basic and away you go.
Start ups ask people to invest their lives into the enterprise. The least you could do is get proper fucking legal advice to ensure your employees and co-founders are covered.
Or don't. And get raped by either the taxman or a VC legal counsel.
Seek proper legal advice, please. You get what you pay for.
Thanks a lot to the author!!
"Don't listen to blog writer because this, that and other thing, but of course listen to ME the commenter!"
The whole point of the post is if you're a founder, you need to take care of these legal things: Founders Agreement, vesting & performance, IP, NDA, responsibilities, etc. (NOTE: not a complete list)
Of course you should get a lawyer so it is done right and suited to you. Having made all these mistakes, I wish I had known about these things before making these classic blunders.
However, if there are boilerplate agreements given with the advice "use these", THEN release the hounds.
1) They're likely going to take /some/ amount of equity with them (have a vesting plan!)
2) Getting rid of a co-founder before you reach critical mass will be detrimental to the business. If not, they probably weren't a good pick for co-founder.
Some co-founders simply let themselves get booted but still cash in at a later date without have actually accomplished anything.
Every law student will attest that nothing replaces the advice of actual legal counsel. Even lawyers get a lawyer when they need one since you need someone with expertise that up to and including that minute.
If you want example of a sterling legal disclaimer then check out
http://www.jisclegal.ac.uk/aboutus.aspx#Disclaimer
A website dedicated to providing legal information.
Is this legal advice? Can I sue you?
All that said, the point apparently wooshed a few miles above your head.
I posted a link to someone else's legal disclaimer as an example of how legal advisory services protect themselves. They used it to try and paraphrase my own comment back to me, unsuccessfully.
You could subpoena HN but it would display a startling lack of understanding about ISPs, legal process, HN and the Internet.
One, a subpoena has to be delivered in person...
Maybe I'm wrong here, but has anyone actually seen such a lawsuit?
Without a legal disclaimer then the blog could theoretically be held accountable as they positioned themselves as the authority and invited action.
The mere presence of a "CEO" title doesn't grant one founder domain over the other(s), and it shouldn't, but this helps explain the frequency of founder drama.
It is also applicable for the UK. When it will be different, we will provide clear examples for the US and the UK.
In one the use of a single word instead of another was the key point.
How can you offer legal advice without even writing correct English?