Lessons in Legal: What documents do start-ups need?

More and more people have selected entrepreneurship as a lifestyle choice and a lot of people think they will be better off with a co-founder that complements their skillset and personality.

It is amazing what people can do when they get together to co-create but how do you pick the right co-founder? This decision may be the most important of your company’s entire history.

Most early-stage start-ups fail due to founder disputes, not the substance of the business. And founders spend so much time together that the business relationship is the closest some of them will ever get to marriage. This is a high-octane, high-consequence, long-term date. Fail to establish clear legal boundaries between stakeholders today, and risk burning bridges tomorrow.

In other words, things can get bitter when money is on the line, and people have strong ideas about how much money they’re entitled to and any fees they’re responsible for paying.

Legal documentation helps founders outline authoritative rights, entitled equity and builds greater transparency among partners.

In this scenario, what documents do start-ups need?

  • Co-founder’s Agreement:This agreement highlights ownership and equity among company founders. The document should oversee ownership rights, define operational responsibilities, and more broadly, summarise the foundation of the shared venture among owners.
  • Investor’s Term Sheet: For those in an early round of funding (even if the funding comes from friends and family) they need this document to outline how an investor will make a financial commitment to your company and it usually consist of three sections: funding, corporate governance and liquidation.
  • Confidentiality Agreement: Known as Non-Disclosure Agreement (NDA), protects the intellectual property, business strategy, trade secrets, algorithms, and client information. Many experience entrepreneurs recommend having a NDA ready to give to your potential business partners, investors and new employees.

A lot of people would think they need a lawyer to draw up these legal documents and if they are starting up with a healthy amount of investment they can.

However, start-ups need to save time and money and at Empowering Futures we are using an amazing and innovative start-up called Farillio, we find these kinds of documents ready for us, created by professionals and a super affordable price.

We also found an offer of employment letter and a template with terms and conditions to sell goods and services to other businesses.  That’s on top of loads of helpful ‘how-to’ videos, guides and infographic checklists about vital topics like getting funding and what options you have, being data compliant and what practical steps you need to be taking, working with others, IP protection, helpful tax reliefs, trading, selling and marketing, so you can stop searching for answers or worrying about what you don’t know, and start taking the steps you need with real confidence. And if you ever need an expert for help, you can invite one in to your account on the Farillio platform, and collaborate with them, rapidly, and for a fixed fee.

They are amazing, and all our readers are getting 15% OFF the already super affordable price. Enter Code FUTURES18 and try them out, let us know what you think? We just wanted to share!

And remember to start your entrepreneurial ventures with the right foot by having the right legal documents.

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