When we started expanding globally, we faced challenges with tariffs, export-import regulations, and compliance with local laws. ~ Bradley Fry, Owner, PinProsPlus
From securing on-call contract counsel to respecting customer data rights, nine tech start-up leaders, including COOs and CEOs, share the legal pitfalls they encountered and their advice for navigating these challenges.
- Secure On-Call Contract Counsel
- Verify Brand Trademarks Early
- Prioritize Intellectual Property Protection
- Check Company Name Originality Before Branding
- Implement Non-Compete Agreements
- Craft Clear Terms and Conditions
- Understand International Trade Laws
- Respect Customer Data Rights
Secure On-Call Contract Counsel
We would’ve been better off having counsel on call for contract review. We have a great relationship with our M&A attorneys, but they do less of the day-to-day operational work. We are currently in the process of developing this relationship. Ideally, we would find something available as a subscription for unlimited contract/agreement drafting and review.
Verify Brand Trademarks Early
A legal aspect that can be overlooked isn’t about the tech you are building; rather, it’s about your brand. After you go through the process to determine your company name and/or product name, you check (fingers crossed) that the domain name is available.
Often, you do a Google search to see if anyone else is using the name as well. The challenge is, even if the name appears unique, or someone else is using it but the product/service seems completely unrelated, you could still hit a major snag when you go to copyright or trademark names and assets.
A cease-and-desist letter that forces a rebrand in the middle of gaining traction is a major distractor! Take the time to have your legal counsel verify that there are no conflicts, and if something potentially arises, you can make an informed decision on how to proceed.
Nicole Spracale, Fractional COO and Integrator
Prioritize Intellectual Property Protection
All tech start-up leaders must be aware of the importance of safeguarding and protecting intellectual property (IP), which applies to more than just your product. It includes technology patenting, trademarking, establishing copyrights for creative work and content, clarifying ownership and use rights, and more.
We had a plan in place for all of this, but there are always complications, which is why you should address these legal aspects as soon as possible, protect your innovations, and make sure no ownership or use issues remain unresolved.
Check Company Name Originality Before Branding
When I started Steambase, I overlooked checking the trademark database for similar existing trademarks before choosing the brand and domain name. Surprisingly, I later discovered an active trademark for STEAMBASE, but it was for masks, a completely different niche from my platform focused on Steam games statistics.
Thankfully, due to the distinct differences in industries, there hasn’t been a conflict. This was a lucky break, but I advise other tech startup leaders to always check for existing trademarks before settling on a name. Neglecting this can lead to legal challenges and the potential need for costly rebranding. It’s a simple step that can prevent significant headaches down the road.
Implement Non-Compete Agreements
I had never even thought about non-compete agreements until a few years into my career. I knew that my company was growing quickly, and I wanted to make sure we were doing everything we could to be successful. But when I started looking into non-compete agreements, I realized that they were a really important part of protecting the company’s intellectual property and ensuring that employees felt safe sharing their ideas.
For me personally, it’s been extremely important to have a strong team and good relationships with my employees. I’ve always believed that you should treat both your coworkers and your customers like family—and sometimes family members don’t always get along! That’s just how life is sometimes. But if you don’t have a good relationship with your coworkers or customers, then they won’t feel comfortable sharing their ideas with you or being honest with you when something isn’t working right.
Craft Clear Terms and Conditions
I overlooked the need for a solid “Terms and Conditions” page. Sounds dull, but it’s like the rulebook for your business. My advice is to get a pro to help craft one. It’s not just about protecting yourself legally; it’s about setting the right expectations with customers. A clear rulebook can save you from headaches and keep things fair and square.
Understand International Trade Laws
One legal aspect I initially overlooked was the nuances of international trade laws. When we started expanding globally, we faced challenges with tariffs, export-import regulations, and compliance with local laws.
My advice to others is to thoroughly research and understand international trade laws before expanding your business overseas. Getting expert legal advice in this area can save you from costly mistakes and help ensure smooth international operations.
At the beginning, I didn’t pay enough attention to privacy policies. It may seem minor, but mishandling customer data can lead to trouble. My advice is to be crystal clear in your privacy policies and stay updated on data protection laws. It’s not just about following rules; it’s about respecting your customers and keeping your business out of legal hot water.
Respect Customer Data Rights
Consumer rights regarding their data usage is a legal aspect that’s often overlooked. There are legal parameters that tech startup leaders must follow surrounding the access, usage, distribution, and retention of customer data.
There are also policies concerning data correction, storage, and deletion that must be observed. Otherwise, you are violating the user’s data privacy rights, and these can land your startup in the hot waters of legal challenges. I advise staying on top of the General Data Protection Regulation and any updates it may have.