Some of the biggest startup headaches I’ve seen are when startups mess up their early legal docs. You do not need an expensive lawyer to get started. Avoid legal fees by all means.
You do need to have paperwork that clearly delineates who owns what and what happens when someone departs voluntarily or involuntarily.
Last week I met with an entrepreneur who had raised a sizeable amount of money from a friend last year. On a handshake. Now they are arguing about the interpretation of that handshake. Bad scenario. It is causing the founder stress when the founder should really just be diving into his customers and their needs, not this paperwork issue.
We made plenty if mistakes early on. I wrote about a particularly tough one before.
I recommend James McDonough (who has done all our legal work and is a rock star for startups) and Wayt King (who is also well known by startups for his work). Both are great minds and understand that early startups don’t wanna spend their scarce cash on crazy legal fees.
What are your thoughts or stories on early paperwork problems?