In late spring, I kept coming across a theme when talking with growth entrepreneurs. Some of my colleagues from Fondia and I have been sparring on entrepreneurs at various KasvuOpen events. The biggest concern for any growth entrepreneur is not legal matters or contracts; instead they are focused on figuring out how to get their business off the ground and how to expand to new markets. Growth companies often operate internationally or in areas where protecting a product and an idea is essential for development from the get go. As the company grows, human resources management and related issues may leave entrepreneurs perplexed, especially if the company is operating in more than one country. Our customers have also encountered feeling unsure about how to respond when the counterparty’s big international giants slam a contract on the table that is then supposed to be negotiated. Growth entrepreneurs are not interested in legal matters in principle and the purchasing of legal support is still perceived as being difficult, because companies may not know what support they require and when. Nonetheless, many entrepreneurs may have the intention to exit the company at some point, which is when a sound legal foundation will make the company DD ready and therefore more valuable.
Where can growth companies find help?
For many, the familiar lawyer, who perhaps runs a one-man office, may seem like the best option at the early stage when money is also tight. Through Fondia, I have learned that few business lawyers are perfect all-round lawyers who are experts in data privacy issues, public procurement, and know how to set up a sister company in the USA. That is why existing and aspiring growth entrepreneurs should think about their own legal department early on. Not just a single lawyer, not just a familiar friend who creates all of the contracts, not just a fixed expense (i.e., a paid lawyer); instead all of this can be bought as a service. Fondia’s Legal Department as a Service (LDaaS) suits growth entrepreneurs perfectly. A specifically appointed team of Fondia lawyers will create a legal foundation for your company, including necessary contract templates, shareholders’ agreements, and anything else that your company may need. Continuous legal support through a free call and check service makes it easy to make decisions and helps our lawyers to proactively help you with the issues you and your company encounter.
10 tips on legal matters for growth entrepreneurs:
- Make a shareholders’ agreement before it is needed.
- Make sure that you create appropriate employment contracts in each country.
- Document your own and acquired intellectual property rights (IPRs).
- Protect your IPRs.
- Invest in good contracts! Remember that well thought-out contracts reduce your business risk!
- Remember cultural and legal differences between countries when doing international business.
- Keep your capitalisation (cap) table organised.
- Find a good accountant.
- Prepare for funding rounds and an exit from the very first day.
- Focus on your core expertise!