July 26, 2023 • 21 mins
Ready to get your legal game on? In this exciting episode, we're diving deep into the must-know legal aspects for your budding business.
Join us as we chat with Gretchen Lennon of Lennon Legal, our legal expert extraordinaire! From founders' agreements to employment contracts, we've got you covered with everything you need to ensure your business is legally sound and ready to conquer the world.
🌟 A Conversation with a Legal Guru: Listen in as Gretchen shares her expertise and valuable insights to empower you with the legal knowledge your business needs. Legal chat never felt so simple as Gretchen breaks down the legal jargon into digestible bites.
👩💼 Legal Trip Hazards and Success Stories: We’ve got a few examples for you of where not putting the time in can come back to bite you but also stories of business owners who navigated the legal landscape and found their way to triumph. Learn from their experiences and gain inspiration for your own journey.
📚 Legal Resources and Pro Tips: Leave the episode armed with helpful resources and pro tips that'll elevate your legal game and boost your business's confidence.$
Don't miss this informative and engaging episode filled with legal wisdom tailored to small business owners like you! Tune in now and get ready to elevate your legal game for a thriving business.
FREE Hiring & Finance Resources Links
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This podcast is brought to you by;
Georgia Fitzgerald (www.georgiafitzgeraldcoaching.com) and Pip Harland (www.theproductproject.com)
If you have a topic you particularly want support with, why not drop us a DM on our Instagram pages: @iamgeorgiafitzgerald OR @pipharland
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hello.
Welcome back to the podcast foranother episode, and we are starting
this week with a special guest who iscoming on to talk to us about all the
legal implications of starting ourbusiness, things we need to think about.
So I'm absolutely thrilled to haveGretchen Lennon join us from Lennon Legal.
, Gretchen, I'm gonna hand overto you to just summarize for
(00:22):
our listeners what it is you do.
Hi Georgia.
Thanks so much for having me.
, so I am the founder of Lenin Legal and weare a small legal consultancy specializing
in advising startups and scale ups.
In a range of needle issues to consideras you're getting your business off the
ground, as you're running it, and theneven as you're preparing to sell it.
(00:47):
, we advise across everything fromemployment contracts to shareholder
agreements, employee share schemes,,commercial contracts and yeah,
you name it, we can help you out.
Amazing.
Brilliant.
So Gretchen and I haveworked together previously.
We've discussed many differentaspects of getting your business off
the ground, , and she's an absolutefountain of knowledge when it comes
(01:08):
to all of this from the kind of earlystartup stuff, as you said, too.
I know that we've talked about likewhat happens with employment contracts,
what happens with, as you say, the shareoption agreements, and even then moving
into those f founding round, , fundingrounds when we get further up the chain.
So, , we have decided to pick your brainfor everyone that is in that startup
(01:29):
phase so that they can really thinkabout the things that, that they need.
So, First up, why is it so importantto think about these legal aspects
when we get going with our business?
, that's a, a really good questionGeorgia, and I think there
are sort of two mean answers.
One is, You have to, by law, there arecertain legal issues, certain sort of
(01:56):
frameworks and structures that you haveto have in place because otherwise you
would be running your business unlawfully.
, and secondly, and I think probably moreimportantly from a practical perspective,
if you could just get these sort offairly simple legal ducks in a row
night, you're gonna save yourself ahuge amount of headache down the line.
, whether that's, you know, in terms of.
(02:16):
Dodging fines or making your businessmore attractive to potential investors
or, buyers or even when it comesto dealing with, you know, larger
customer contracts or supplieragreements, or building your team.
If you've got the legal structurein place from the beginning, you
are definitely saving yourselfheadaches further down the line.
I think this is a thing because for alot of people, so we talk a lot about the
(02:38):
back office of starting your business.
. All the slightly unsexy stuff, which Ithink can make people feel a bit nervous
cuz they don't know anything about it.
We talk a lot about the sort of financialside and now that we're throwing in
the legal side, we might have people'sheads spinning with, oh my gosh, I
don't know where to start with this.
So thinking about, okay, so I'veimagined that I've just started
(03:00):
my business, I've been going.
Three months, and I've got a handful ofclients, but I've started to create, I've
got my own website, I've got my own logo.
I've started to createtools to help my clients.
How early in my business journey do Ineed to start thinking about this stuff?
(03:21):
Is it straightaway?
Can I wait six months?
Like what's the real timeframe?
I mean, I think you've described areally sweet spot of when, , founders
should be thinking about some ofthe very early stage legal issues.
, one of the key ones, I think justexactly in the kind of timeline that
you've just described would be, Areyou at the stage where you are, solely
(03:42):
running your business as a sole traderor have you incorporated a separate
company so you've effectively got acompletely separate legal entity that
you contract, , with your customersthrough, and you have a, you know, a
separate bank account for that business?
, That's probably a goodtime to start doing that.
Realistically, the earlieryou do that, the better.
And you know, in terms ofactually how you go about setting
(04:05):
that up, it's really simple.
The company's post website forbusinesses in the UK is pretty
intuitive, at least when it comesto sort of setting up companies.
You can do it online.
, within about, I think, 15 minutes, andit costs, I think it's like 12 or 15
quid to incorporate a company online.
And you really don't have to, you know,have your, your sort of your business
(04:26):
name, your brand, or anything locked down.
You can just be, you know, you cango pretty basic and just call it
Gretchen Lennon Unlimited, just.
Get a business incorporated.
, you can change the name furtherdown the line if you need to.
, but that's probably one of the first stepsin terms of the legal structure of how
you run your business and how you kindof keep it separate from you yourself.
(04:47):
Yeah.
, what would be then, I think, sorry to,but what would be the, one of the big
reasons to move to an incorporated companyrather than working as a sole trader?
, the biggest reason is separatingbusiness liabilities or business
debts from personal liabilities andto kind of, I guess really kind of
(05:09):
play that out in practical terms.
If your business isn't doingparticularly well and you ultimately
end up going insolvent andlet's hope that doesn't happen.
But if it were to happen, if you werejust operating as a sole trader, so
all of the business debts and all ofyour personal debts are effectively
all one, that is a potential risk thatyou could lose your personal assets
(05:32):
in order or you would be obliged tosell your personal assets in order to
pay off some of those business debts.
The most obvious and I suppose terrifying.
One of those is your house.
If you're a sole trader, there is arisk that your house could be at risk
or exposed if you end up in insolvencyin your business and have to sort of,
(05:52):
you know, pay off as much of, , ofthese very large debts as you can with
whatever personal assets you have.
If you have incorporated a separatebusiness, you've effectively got your.
Your personal assets, your personallife, and your business assets and
debts as two separate legal entities.
Even though you may only be thesole shareholder of that business
(06:14):
in the eyes of the law, theyare two separate legal entities.
So your personal assets are no longerexposed or at risk, , as a result of the
debts or liabilities of your company.
Okay, so we started heavy with what?
Yeah.
Yeah, lawyers do like to jump tothe sort of worst case scenario,
(06:35):
but no, it does make total senseand I think it's something that is
really good to think about early on.
And as you say at that kind ofsweet spot where this isn't just
a hobby anymore, this is actuallya business that you're going, I.
Full out with, in terms of bringingclients, then that's the time you do
also, I mean, I'm, I'm not an accountantnor a tax advisor by any stretch of the
imagination, but I think once you haveyour business set up and therefore your
(06:58):
sort of, you know, your business revenuesand costs are separate to your personal.
, income and costs.
There can be potentially some taxbenefits from doing it that way as well.
Yeah, as I said, absolutely, definitelynot a tax advisor, but, it, it's
worth speaking to someone about thatbecause, , yeah, it can be a lot more
tax efficient from, , in some instancesto have your business set up under
(07:21):
a separate company than your, your.
Your personal expenses.
Yeah.
Fantastic.
And that's something actually thatPip, who I normally co-host with,
, can go into a bit more detail on.
So we'll you an episode, a followup episode on that as well.
Okay.
So we've talked about,, incorporating the company.
What's the next sort of big thing on thelist that we should be thinking about
(07:42):
at this early stage of our startup?
So the next big thing that Iwould definitely always speak
to clients about is, , who areyou running your business with?
And if it's just you, great.
But if it's you plus afriend, a co-founder, you
know, a co shareholder, then.
Absolutely as early as possible.
You probably wanna think aboutgetting in place a finder's agreement
(08:02):
or a shareholder's agreement.
And again, not to sort of gostraight to the sort of, you
know, doom and glim of it all.
But, , if you think of a shareholder'sagreement or a finder's agreement
as a prenup, , you basically are.
With your co-founder or yourco-founders agreeing the terms
in which your businesses run, youknow, sort of the, the co-ownership.
What happens if one of you wants to sell?
(08:23):
What happens if one of you wants toleave or you know, gosh, what even
happens if one of you passes away?
Then the founder's agreement willprovide for all of that at a time when.
All of you are on really good formtogether and you know, sort of like the
relationship between, youre very positive.
So then if, for example, thingswere to break down in the future
and then maybe, you know, thereof one other, if you did want.
(08:48):
You don't have to sort of try andresolve that argument at that time.
You've already pre-agreed the processand who's gonna get what, and it's set
out quite neatly in a legal agreement.
, founders' agreements are alsoreally helpful for other reasons.
They can kind of quite clearly focus yourminds on what are your sort of, , each
other's minimum commitments and to eachother's expectations of the other and.
(09:10):
And yeah, they can just kind of helpyou with the general governance of
how the business is gonna be run.
, so definitely worth gettinga's agreement in place earlier.
I also don't wanna go doom and gloom,but do you have any examples of,
, obviously you can't name clients, butsort of vague stories that give an
example where perhaps someone hasn'tdone this and it's gone a bit wrong.
(09:33):
Yeah, I do actually have, , sortof an example that I, for quite
a few clients, , and this was asituation where we had two, I think
actually maybe three co-founders and.
Two of them wanted to sell and the third.
Effectively kind of just got, Iguess, really just left behind.
(09:54):
And the two who wanted tosell collectively owned more
than 80% of the business.
So they were able to sell their sharesto a, a, a third party buyer who,
when, when they came in, they acquireda sort of an 85% interest in the
business, which is more than enough.
Generally we call it acontrolling interest.
So if you only 85%, you can prettymuch make most decisions within
(10:17):
the business without having to get.
Full, a hundred percentshareholder on board.
So these two co-founders found a buyer,agreed a price, sold their shares, you
know, for quite a handsome sum, anddisappeared off into the sunset, leaving
behind the third original shareholder.
(10:37):
The, , new buyer wasn't interested inbuying the, the remaining 15 ish percent.
They didn't need it.
They already had thecontrolling interest and.
The, the third shareholder then, whowas left behind then was a minority
shareholder in his own business witha new buyer who he didn't really
have a relationship with or didn'tparticularly want to work with.
(10:59):
And because he had such a minoritystake, he didn't have a very attractive
offering to be able to then sellthose shares onto anyone else.
So he sort of left like abit of a sitting duck really.
, in a company that he's helped find Annie.
I, , you know, Enjoy the payday thatis, do other co-founders kind of
organized sort of behind his back?
That is a terrible situation.
(11:20):
Yeah.
Not great.
, and I, I mean, there is sort ofvarious things that we could look
into to maybe try and resolvethe situation a little bit.
But honestly, a well draftedco-founder agreement from the
beginning would've avoided that.
Yeah, because it would've saidif two want to sell, the third
has to be, has to be consulted.
Yeah, exactly.
That initial, the third has to beconsulted or maybe would've had to have,
(11:41):
had the right to sell into the transactionon the same terms, at the same price.
So he could also enjoy his paydayand force the buyer to buy a
hundred percent of the company.
, or maybe the two who wanted to sell,could have, , had an obligation
to offer to sell to him first.
Before selling to a third party.
Yeah, there's, there's lots of differentstructures that we would very typically
(12:03):
put into a founder's agreement that thesepeople just didn't have, and so he had
very little legal protection at that time.
And I think it happened.
It does actually sadly happen so often.
You do see often best friends setting upbusinesses together, which is great, and
it's all full of enthusiasm to start with,but then one's really pulling their weight
(12:23):
and one really isn't pulling their weightor, , but that's a very common example.
Life lifestyles change, maybe one.
They, they go off offer maternityleave and then actually their family
becomes more important perhaps thanthe , their commitments change.
Yeah, exactly.
And then you can really havesome big fallouts at the end
of that, which, . Absolutely.
And, and I think that'sa really important one.
(12:45):
It's the expectation of commitmentto the business, um, and how
much effort you, you're gonna putin versus, , what shareholding
you're gonna have in the business.
So a lot of, you know, as you say to.
Spends, co-founders go in and they owna business 50 50, and then very suddenly
it becomes apparent that only one ofthem is really pulling all the weight and
the other isn't, but yet they're stillon paper 50 50 co-owners and therefore
(13:09):
entitled to, you know, 50 50 of profitsor seal proceeds if they were to sell.
, so yeah, founders agreements can be avery useful tool in dealing with what
happens in that sort of situation.
And as I say, sort of havingit all agreed and, and written
down before it actually arises.
Yeah, so it helps to minimizethe , the a tensions and also when
(13:30):
you are negotiating, then you cando it in a quite light-hearted
way cuz it's all hypothetical.
You know, hypothetically, if I'mdoing more work in the business than
you, then this is how it would work.
Or if it goes the other way Yeah.
You know, you can keep it quite easy.
Absolutely.
And.
Exactly as you say.
You know, you're sort of thinking aboutit hypothetically, but you're also
thinking about it from the point of viewof, okay, well if I were the one who
(13:51):
was doing more work, how would I feel?
But also if I were the one who wantedto maybe take a bit of step back.
How so?
When you're negotiating.
You, we sort of try and think about itfrom both sides, , of the table so that
you try and reach a, a sort of fairand balanced the position as possible.
Yeah, absolutely.
Cuz you never know what's gonna happen.
So thinking about that, okay, sowe're incorporating the business
(14:12):
potentially, , founders agreementif we started with someone else,
. What else are we thinking about?
I think we talked about the fact thatmaybe we are starting to, we've got a
website, we've got a bit of a brand, we'restarting to produce some of our own work.
Yes.
, what do we need to thinkabout in that respect?
So, Absolutely, this is thetime if you haven't already
(14:33):
done it, to secure your domain.
If you've got your website, you'veprobably already got your domain.
You might wanna kind of get acouple of other domains as well.
Even if you're not actively usingthem, just lock them down so no
one else comes along and sortof switch them from under you.
Similarly, get your trademarks registered.
, again, it can be fairlyeasy to do this online.
, you know, the, the UK trademark offices.
You pretty straightforward.
(14:54):
You should register your logo, yourbrand name, and yeah, maybe any other
sort of brands or logos that you'realso thinking about using in the future.
Just as I said, with same with thedemands, just to get them secure to
prevent anyone else from taking them.
Yeah, that's such a big thing, like ifyou've put all that work into, firstly
thinking of your business name, designingthe website, getting those trademark,
(15:18):
getting the logos, and then somebody else.
Because if you think a lot of ourclients are probably working online,
so it's very easy for people to seeyour business and what you are doing.
And copy it, steal it.
Copy massively.
Yeah.
So if you lock that down,you've got no comeback.
They, they could take yourname, trademark it themselves.
(15:39):
Yeah.
And then, and then you've got,and then, and then, and then
you're sort of in, almost like ina bit of an extortion situation.
Like they could attempt to sell thetrademark to you and you have to pay just
to have the name that you're the one thatcame up with, or the, you know, the logo,
the brand that you up the first place.
So yeah, definitely.
Your logo and your brand andyour domains and, and your
(16:00):
social media handles as well.
You know, even if you think, oh, I'mnever gonna use TikTok or Instagram
to promote my business, just getthe handles that the accounts locked
down so someone else can't come alongand, and, and take them from you.
, and then also on the same theme ofreally protecting your ip, make sure
that whatever agreements you havein place with the people who are
(16:21):
coming up with or helping you come upwith the ip, you know, maybe design.
Your logos, make sure thatthe, , contractual agreements
that you have in place with themhave really robust IP clauses.
So if you engage, a graphic designerto help you with your logo or a
website designer to build your websitefor you, , or whoever it might be.
Or even if it's a sort of a member ofyour team, whether it's an employee
(16:45):
or , you know, consultant or contractor.
Make sure that.
Whatever IP they may be coming up with foryour business, there are provisions in the
contract that you have with them that saythat that IP is assigned or effectively
transferred over to your business.
So there's no dispute further down theline that you know, someone who used
(17:05):
to work for you and then disappearsoff as actually, well, I, I designed
that product, or I designed that logoor whatever and therefore I own it.
And so, yeah.
Fairly robust IP ownership clauses in thecontracts that you have with the people
who may be doing IP or, or creating IPfor you, whether that's your team members,
your, you know, your sort of your,
(17:26):
, whoever it is and get those.
And then, yeah, her ship is one of theareas that when you then do eventually
come to sell your business, yourpotential investors or buyers will
really want to look at, because usuallyIP is one of the main assets or sort
of items of value within your business.
And if you don't own it,potentially your business isn't
worth as much as you think it's.
(17:46):
. That is a, a huge point actually.
, and it's all about when youcome to sell your business.
And I think we might not have time togo into that this week, but definitely
something for a follow up episode.
The things you need to thinkabout it is all about the
things that your business owns.
, all those assets definitely likethe ip, the, the clients like.
I mean, obviously you don't ownyour clients, but you own your
client list, that sort of thing.
(18:07):
So many different aspects around that.
, just a quick question.
So this sounds like quite abig job and quite daunting.
If, if someone was to come to you andsay, okay, how do I lock down all my ip?
What do I need to do?
, how would you work with them on that?
So, trademark registration is actuallyprobably more of a specialist role,
(18:29):
and we would put you in touch withour, , specialist trademark partners
who can definitely help on that.
But when it comes to, , the thingslike your, the, the provisions
in your contracts, absolutely.
That's somewhere we can help and.
, sort of, I guess, you know, more generallyhaving a fairly decent template employment
contract or consultancy agreement ifyou're just bringing your team members on
(18:51):
as, as freelancers maybe in the beginning.
, that's definitely an area we can help.
And there are certain provisionsthat you, you have to have by law.
, and then there are other clausesthat you just wanna make sure are as.
Reasonable, but as protectiveof your business as possible.
And that's not just in terms of the IPownership, but also, you know, things
like, for example, like notice clauses,, or even, you know, things like with your
(19:15):
team talking about like what happens ifsomebody needs tick holiday or sick pay.
, and then the other area where it'sdefinitely worth thinking about.
, is whether you wanna put in place anykind of non-competes or, , any sort
of provisions in the, , contracts withyour team members that will protect
your company if they were to try andthen set up in competition or maybe
(19:39):
move to a competitor after they finishworking for you because, you know, team
members move on, but you don't want themnecessarily moving on and, you know,
setting up in competition next door orstealing all your clients or even trying
to poach your remaining team members.
So, yeah.
Yeah.
The, the contracts that you putin place with your team at the
beginning are important to you.
(20:01):
You don't want 'em to be toodraconian, but you also need
them to protect your business.
, yeah.
And there's a sort of, there's a,there's a balancing act to be had there.
I do think, yeah.
I completely agree with that.
And I think employment contractsdon't need to be complicated, but
it's just making sure that you've gotthose, those particular things in.
I know that I work witha lot of coaches who.
(20:23):
Perhaps want to bring other coachesinto their business to take, you know,
take on some of their client delivery.
But that's definitely a concernfor people, you know, what if they,
what if they steal my business?
What if they move on?
, I know that it can be relativelyhard to follow up on that though.
In terms of what goes into the contract,you know, the non-compete courses,
(20:46):
having worked in, , recruitment,that was a big thing with us.
You know, if you left a firm.
It was a big non-compete and you wereoften put on gardening leave so that
there was a clear break between youand your clients so that the team
that you had left behind could get inthere and rebuild those relationships
that you were kind of key in.
Yeah.
While you sort of took some time outaway from business so that when you
(21:09):
started in your new role, it was not aseasy for you to, to bring those clients
with you cause there'd been quite a gap.
, is there anything that you wouldrecommend, , To make this feel
easier for people when they'retaking people on that they're not
gonna run off with their business.
, We could definitely talk about whatare the, what are the real threats,
because it's important to look atthose sorts of non-competes from
(21:33):
the perspective of obviously how toprotect your business, but also what's
reasonable for your team and what's notgonna appear as so harsh and draconian
that it might even potentially beoffputting to potential new hires.
Particularly if you're looking for someoneyou know, who's reasonably experienced
or senior who's maybe had a few otherroles within the industry already.
, You know, they may be sort ofconsidering a few different offers,
(21:55):
and if you've got the mo the mostsort of, , restrictive contract,
you may not be their first choice.
, so you probably want to have a, if youare going to go down the road of having a
non-compete clause or a non-solicitationclause, you know, no poaching of clients,
, in your contract, you wanna think aboutkeeping that as narrow as possible.
So it really is only capturing the.
(22:19):
Like the, the real threatthat you're perceiving.
So you know, if, if you're runninga business that is sort of.
Specific to a particular geographic area.
, you know, if you're providing a, a sortof an in-person service to clients,
it's, you know, it's not done remotely,then realistically you only need your
non-compete to be as wide as to coverthe geographic area where you operate.
You don't need it to be nationwide.
(22:40):
You don't need it to be global.
And actually from a legal perspective,if you do try and cast the net,
these kinds things, court holdable.
And likewise, you know, when you'retalking clients, , It's, it's considered
fair and reasonable to keep those kindsof non-solicitation clauses limited to
only those clients that the employeein question actually had a relationship
(23:03):
with, or actually, you know, sort of didsome work with or had some contact with.
Again, if you cast the net, so whythat it's all of your clients or
potential clients anywhere in themarket, then that's actually deemed to
be an unreasonable restraint of tradeand, you know, it, it would be sort
of unfairly trying to keep someone.
Of the market and ofthe industry altogether.
So we would definitely have tothink about what is the, what is
(23:25):
the real threat to your genuineand legitimate business interests?
And how do we kinda get thescope of the non-compete, right?
So that it's fair and reasonable, , toyour team members, but also so that
it adequately protects you as well.
, absolutely, and, and, and, you know, otherthings to think about as well, of course.
Ideally your clients wouldn't even beconsidering leaving even if you lose
(23:47):
a team member because they're sortof so happy and satisfied with your
business service anyway, so Exactly.
It's not just the legal element of it.
Yeah, and and I would really stressthat because I think this is something
I hear from people a lot and I, I thinkthat people are coming into it with the
negative mindset straight away actually.
What if you know, this person thatyou're bringing into your business
(24:09):
is just one cog in an amazing servicethat you're delivering to your clients.
So actually, if they leave having beenbrilliant within the business, and they
go and start something of their own, youknow, good on them, great luck to them.
, but actually they were just a smallpart of the incredible service that
you were delivering to your clients.
So for your client, actually, Is itreally worth them moving away to someone
(24:35):
else that's just providing part of a bigservice that they're getting with you?
So yeah, I think there's definitelyprotect yourself legally,
but there's so many differentways to look at that as well.
, so that you aren't beingfearful about hiring people.
Yeah, definitely.
Okay, so we've got a few things there.
So we incorporating the company,we've got the founder's agreement.
(24:57):
We're talking about registering,trademark, , contracts,
that sort of thing.
When we're bringing in our firstteam players, what are we missing?
What else do we need to talk about?
And then I, I think the other sort ofmain thing, you were kind of talking
about contracts with team players.
You also wanna think about contracts withyour customers or terms and conditions
with your customers, depending on sortof, The nature of the products or the
(25:17):
services that you're selling and, and, andwhat kind of relationship you would have.
But things like, you know, if you'reoperating on a kind of, I don't know,
like a subscription type arrangement,if that's your business model, you wanna
make sure that the, , provisions in yourcustomer contract or your customer Ts
and Cs are, first of all, you wanna makesure that they act accurately describe.
(25:40):
Your business arrangement or yourcontractual arrangement with your clients,
but then you also want to make sure thatyou are protected against things like
when your clients maybe wanna terminatethe agreement, , you know, can they just
terminate immediately and walk away?
Or do they have to give you a minimumnotice period or are they locked in
for a sort of, You know, a minimumsort of three month or 12 month
subscription period, and then theycan only terminate at the end of that.
(26:02):
, similarly, do you have asort of an auto renewal?
So at the end of the first 12months, the contract just ticks over
and immediately another 12 monthstarts, or you know, do you then
go onto a rolling one month basis?
, You also wanna think about, , the paymentprovisions and invoicing and what happens
if your clients are paying late andwhether you're gonna charge them interest.
(26:24):
, if, if you're sort of providing an ongoingservice, you want to potentially have
the right to suspend the provision ofthe service until, Payments for, made.
All of these kinds of things youwould build into your, , contract.
Likewise, what are the kindof minimum, , kind of quality
assurances that you want to provide?
(26:45):
, or if it's a, you know, an access tolike an online service or a platform,
did you have the right kinda, youknow, turn it off, , at certain times.
, okay.
So quite few things to thinkabout, , for your customer contract.
Yeah.
Okay.
Perfect.
So yeah, there's quite a bit there andI think for a lot of the people, , that
(27:06):
are listening, bringing in those clientcontracts is really, really important.
And I think it can be something thatpeople skim over or perhaps they're
just pulling one from somebody else'sand kind of making a copy of it.
Yeah, that's very tempting.
Yeah.
Yeah.
That's not a good idea.
But then someone else isn'tmaybe putting your name on it.
Exactly.
(27:26):
But why isn't that a good idea?
, I think it's, , very often thesekinds of either cribbing someone
else's or, or finding a sortof off the shelf, , product.
You know, you can, there aresome sort of off the shelf
legal document providers online.
They can maybe cover sort of 80to 85% of what you need, but it's
(27:48):
quite likely that they won't.
Absolutely fit your business model ordo exactly what you need them to do.
Or maybe they include a provision that youdon't want or don't understand, and then
you've ended up kind of giving away toomuch contractually, , or you don't have
the protection that you thought you had.
, and.
You know, exactly as you say,do you, these contracts don't
(28:10):
have to be very difficult.
These Ts and Cs and in particular,the language that they're written in
doesn't have to be, you know, sort ofall this impenetrable legal jargon.
You can have a contract that's written inreally plain, in English, so particularly
if you're pulling something, you know,off someone else's website or whatever,
and maybe there's something in therethat you don't actually understand.
That's not the right contract foryou, because if you don't understand.
(28:32):
Then how are your customersgonna understand it?
, so yeah, I think maybe that's a goodstarting point, but definitely then get
it toed to, to your business and Yeah.
And so that you, I love, I love thisidea of like plain English contracts
because I just think it's so good foryour clients to understand exactly
what they're signing up to too.
So if.
(28:53):
If they decide, oh, maybe I could getout of this contract, and then they
actually read through it and they don'tunderstand any of it, then it doesn't
really help with their situation.
But if they can read through andplain English and they're like,
okay, yeah, this makes sense.
Unfortunately I am, you know,contracted to keep going or da
da da da da, then it's great.
Yeah, I've got a 30 day notice period,so I just have to, you know, pay
(29:15):
out another 30 days and, and thenI'm free to terminate if I want to.
Yeah, exactly that.
I think, , You want it in plainEnglish so you can understand that,
and I think your clients definitelywant it in English as well.
Yeah, definitely.
Okay, so anything we've missed for thisperson that is just starting their startup
somewhere between nor and 12 months.
(29:37):
I mean, some people get to 12months and they haven't done any
of this yet, so don't worry ifyou haven't, it's not too late.
Just crack on.
That's very true.
Definitely don't worry.
, a couple of more on the sort of, youknow, do these because you have to
by law type, , things to consider.
, you wanna make sure that your HM R C filings and your company's
house filings are up to date.
, Probably more on the accountancy side.
(29:58):
Usually a lot of small businessaccountants will not only manage your
H M R C filings, but they'll also helpwith your company's house filings.
, it's just a bit of a wrap in the knucklesand maybe a fine if you are, leave it
with your deadlines and miss your filings,but it's not something that it's worth,
you know, really falling behind on.
, so yeah, definitely get yourducks in a row with those.
Likewise.
(30:20):
Consider whether or not you need toregister with the Data Protection Office.
, does your business handlequite a lot of personal data?
Are you collecting lots of personalinformation from your, , clients
or your website users or whomever?
What do you do with that personal data?
Do you transfer it ontoany other third parties?
Do you sell it?
And if so, you probably want to registerwith the data protection office and then
(30:40):
make sure protection policies and, and so.
Legal statutory requirementis, , if you have employees in the
uk, , you are required to put inplace a workplace pension scheme.
So that's the, the autoenrollment, , pensions in the uk.
(31:03):
And again, I think a lot of smallbusinesses bringing in their, you
know, their first or second employee,they maybe overlook the requirement,
the time you on your first employee.
, so yeah, are definitely.
Minimum legal requirements tomake sure that you're meeting.
And then another one is it's, , notnecessarily minimum legal requirement,
(31:24):
but it's, well, it probably is,but it's definitely something you
wanna think about is the appropriateinsurance policies for your business.
So whether that's your product,liability insurance, if you're selling
products, your employer's liability,if you have employees and or your
professional indemnity insurance ifyou're offering professional services.
, Those are the kinds of insurance policies,so that if something were to go wrong
(31:45):
and maybe a customer then perhaps triedto bring a claim against you, or even an
employee tried to bring a claim againstyou, you've got insurance to cover those.
Yeah.
Okay.
Makes sense.
This has made me think of a, a slightlyoff topic question, , but something that
has come up for a few clients recentlywho are small businesses, service-based
businesses, wanting to go in and workwith bigger corporate businesses.
(32:08):
Mm-hmm.
So we're talking like thebigger accountancy firms.
Or you know, those well-known bigbusinesses, hundreds of employees,
global and contracts, and they'vegot big supplier contracts that
you're expected to sign up to.
Exactly.
Okay.
So what's that work?
Because they're never gonna, I know thatthey never agree to the little person's
contract because they would have too manycontracts to look forward to look through.
(32:32):
So they've created this massive contractthat covers like every eventuality.
, what would you suggest when facedwith one of those supplier contracts?
Yeah, they're very daunting for sure.
, I mean, not to sort of, you know,be trying to blow my own trumpet too
much, but I think really you probablydo want to have it, at least give
(32:55):
it a good read through yourself.
, if you, you know, sort feel confidentthat you read it and understand it.
If not, you probably dowanna speak to a lawyer.
Kind of key things you wanna be lookingout for are, uh, the payment provisions.
, you know, when do they have to pay you by?
A lot of these very big players willoften say that invoices only have to be
(33:16):
paid within 60 or maybe even 90 days.
90 days is a long time for you towait for your invoices to be paid,
particularly if you're used tothem being paid maybe a day cycle.
There may not be much riggleroom with that, but you should at
least, you know, have a look forit in the contract and be aware.
, similarly with termination provisions,, again, if you're expecting this, you
(33:40):
know, this great new client to signup for a minimum 12 month contract,
but actually there's a provisionsomewhere in there that says that
they can terminate at any time on, youknow, a week's notice or something.
That's, Yeah, that'spretty terrible for you.
So ideally you'd wanna try andpush back on that where you can.
, they probably have some fairly sortof high thresholds on liability and
(34:02):
exposure and maybe even insurances.
They expect you to put in place.
Sometimes even large clientsexpect them to be listed on your
insurance policies as beneficiaries.
Depending on the nature of theservices and what you're doing, and
also depending on the value of thecontract and the potential exposure
that you face, you may decide to takethe commercial decision to just not
(34:28):
worry about those kinds of things.
You know, if you're, for example, , liketaking your business charges, you
know, if you're going, you're doing a
sort of webinar or a seminar on, , Sortof, , like some coaching for them.
Chances are you're not reallygonna have too much legal exposure.
(34:48):
, you know, it's very unlikely thattheir business is gonna suffer huge
amounts of loss because of somethingyou may or may not have done when
you were delivering that seminar.
So, well, we would hope not.
We would absolutely hope not.
, whereas, you know, ifyou are, I don't know.
A business that's providing themwith some sort of, , IT security
(35:09):
or data security services?
Yes.
Ok.
And then some kinda breach as, and there'ssome kind of breach then, you know,
there is potentially some pretty largeexposure and liability there that you as
the supplier could be on the hook for.
Yeah.
So yeah, you, you pretty much have tosort of weigh up the balance of what's
the real risk to you, you know, what'sthe real value of the contract and.
(35:34):
Versus how much liability are theytrying to push on you and, and
these big players will try andpush as much onto you as possible.
But yeah, instances youmight just decide it.
Yeah.
So some things need to be possiblypushed back on, but definitely
get, look to read it over there.
But I think also as you say, is lookingfor those clauses, like the payment
(35:55):
clauses and thinking, okay, I'm notgonna be paid for 90 days for this.
Yeah.
I essentially can't drop all my otherwork and focus on this for a month
if I'm used to I regular cash flowbecause, I'm, I'm gonna be in trouble
in two months time because yeah, moneyisn't gonna come in for a while and
I've been busy working on their projectand not generating any other income.
(36:16):
So thinking about how doesthis sit with my pipeline?
So then you're thinking about, you know,your financial overall, like can you
take Exactly and potentially even givenconsideration to whether they're scoped,
to negotiate with them that you get like,you know, 25% paid upfront or something.
So the three month doesn'tfeel quite sustainy.
Exactly and you could, you know, putthat as a development cost versus a
(36:39):
delivery cost or something like that.
Yeah.
Okay, fine.
So we've covered quite a lot of stuff.
, yeah.
And hopefully we haven't lefteveryone with doom and gloom.
I'm just wondering, have you got any,a really good story or something where,
I dunno, someone has put this legalstuff in place and it's actually really
(37:00):
saved their bacon further down the line.
You worked with recently and youthought, oh, do you know what?
Thank God we did that, or Thankgoodness they put that in place.
, I mean, well one customer, actuallyone client came to me recently and they
said that they had a, a quite a large,uh, client in the US and they, they
(37:21):
provide, , I think it's SEO services theyprovide, it's on a 12 month subscription.
And they came to me and said that theyhad just had one of their large clients in
the US say they wanna cancel the contractand they're giving them 30 days notice.
And they were like, youknow, this is terrible.
I, I thought we had them ona rolling 12 month contract.
Can you, you know, checkour Ts and Cs and confirm?
(37:42):
And so it was quite satisfying to beable to go back and look at their Ts and
Cs that we'd help put, we'd help themput together quite a few years ago now.
And they did in fact, say you're on a12 month contract, which, , you have
30 days to terminate at the end of that12 months, and if you don't terminate
within those 30 days, then you're ontoanother rolling 12 month contract.
(38:04):
And it just continues onthis rolling 12 month basis.
So it was quite satisfying tobe able to tell that client.
Don't worry, they are outsidethat 30 day termination window.
So they have already ruledinto another 12 months.
So, They are on the hook for Yeah,the minimum 12 month subscription.
So even if they do wanna leave you, andhopefully they won't, they still have
(38:26):
to pay you for the what's remainingof this current 12 month period.
, so yeah, I, I guess that's asort of a, a small example.
, other examples that I, I see kind oftime and time again are really on the,
, the IP and trademark ownership front.
It's usually when, , businesses arekind of coming to the stage where
they wanna bring in investors andinvestors are asking lots of questions.
(38:50):
You know, they're doing theirdue diligence, they want to know.
All about your main customer contracts.
They wanna know allabout your IP ownership.
And so to be able to say, , yes, wehave registered this trademark, or,
yes, we've got these IP, , provisionsin our employment contracts or
in our, , contractor agreements.
And it just gives theinvestor a lot of confidence.
One, that the IP ownership is locked in.
(39:12):
And also too, that, you know, you, you'vegot your, you've got your house in order.
Yeah.
, so yeah, that definitely a big one.
Okay.
So of all the things we've mentioned,going back to my example of three months
in just getting going with the business,what are the top if, if I'm might, okay,
this is great, but that is so much stuff.
(39:32):
Where do I begin?
Yeah, what are the, it feelsthat might be a bit overwhelming.
Yeah.
The first three that you would say,okay, start looking into these.
So incorporate your company ifyou haven't done so already.
, and just keep your personal financesseparate from your businesses.
Is, is really advisable.
, get your founder's agreement in placeif you're running your business with
(39:52):
a co-founder and then your, yeah, the,, employment contract or consultancy
agreements with your team once you'restarting to bring your hires in.
And then, , your, your IP ownership.
So your, your demands, your socialmedia handles, and your trademarks.
Ok.
Those are the top.
I think that was probablyfour things, but that's fine.
Integration, founders'agreement, employment contracts.
(40:13):
Trademarks seems much more achievablewhen we put them as the bullets like that.
And if people wanted to come and workwith you on this, how could they do that?
Absolutely.
So I mean, yeah, feel free to checkout our website, lenon legal.com.
We've got some sort of, , articles and,and useful pieces of information there.
, we're actually in the process ofputting together a sort of, , an
(40:34):
information pack, which summarizessome of these key legal issues for
startups that we've just talked about.
So that's gonna be availablefor free on our website.
Very soon, , or contact us directly.
, there's a, a contact us form on thewebsite and get in touch and we can chat
through whatever legal issues you'reconcerned about and how we can help you.
And we'll put all of thoselinks on the show notes as well.
(40:55):
So just jump down andhave a look at those.
I know that there's so many otherthings to get into and I would love to.
Kind of get you back for anotherepisode to talk about the next.
I'd love that stage and maybeeven the stage after that.
So maybe we've got a stagewhere we're up and running.
What are the challengeswe might be facing?
Mm-hmm.
Perhaps if anyone that's listening has anyquestions, feel free to send them to me
(41:18):
via, , Instagram is probably the best way.
I'll collate those and getGretchen back for a bit of a.
How do we deal with this situation?
, and then also looking at what we need todo when we're preparing to sell, because
perhaps you are five years away from that,but you're thinking, do you know what?
I know that between now and thenext five years, I'm building this
business up because I want to sell it.
(41:39):
And the earlier you start thinking aboutthe different things that you need to
get in place, the better, particularly.
If you are looking to kind of sell thaton to perhaps private equity or mm-hmm.
, something like that, then you wannamake sure that you've got certain
things organized because it'sgonna massively increase your sale
(41:59):
price if you've got those things.
Already underway.
Am I right?
Yeah.
It's, it's massively gonna increasethe value of your business and
it's just gonna make the, theprocess of the exit so much easier.
You know, there's a lot of movingpieces when you're going through, an
exit transaction and yeah, that, asyou say, Georgia, the more that you
can kind of, , get things in place and,and get the right sort of structures,
(42:23):
, in place in advance, the smoother,hopefully the transaction should.
Yeah, absolutely.
Okay.
So drop me any questions if, , ifpeople wanna know more, particularly
if you've got any questions aroundshare option agreements, funding
rounds, and what employment contracts.
Yeah, all of that.
, and we can answer all ofthose and another episode.
(42:43):
But thanks so much forjoining me, Gretchen.
It was lovely to chat with you.
Thanks so much for having me.
It was really great.
Hello.
Welcome back to the podcast foranother episode, and we are starting
this week with a special guest who iscoming on to talk to us about all the
legal implications of starting ourbusiness, things we need to think about.
So I'm absolutely thrilled to haveGretchen Lennon join us from Lennon Legal.
, Gretchen, I'm gonna hand overto you to just summarize for
(00:22):
our listeners what it is you do.
Hi Georgia.
Thanks so much for having me.
, so I am the founder of Lenin Legal and weare a small legal consultancy specializing
in advising startups and scale ups.
In a range of needle issues to consideras you're getting your business off the
ground, as you're running it, and theneven as you're preparing to sell it.
(00:47):
, we advise across everything fromemployment contracts to shareholder
agreements, employee share schemes,,commercial contracts and yeah,
you name it, we can help you out.
Amazing.
Brilliant.
So Gretchen and I haveworked together previously.
We've discussed many differentaspects of getting your business off
the ground, , and she's an absolutefountain of knowledge when it comes
(01:08):
to all of this from the kind of earlystartup stuff, as you said, too.
I know that we've talked about likewhat happens with employment contracts,
what happens with, as you say, the shareoption agreements, and even then moving
into those f founding round, , fundingrounds when we get further up the chain.
So, , we have decided to pick your brainfor everyone that is in that startup
(01:29):
phase so that they can really thinkabout the things that, that they need.
So, First up, why is it so importantto think about these legal aspects
when we get going with our business?
, that's a, a really good questionGeorgia, and I think there
are sort of two mean answers.
One is, You have to, by law, there arecertain legal issues, certain sort of
(01:56):
frameworks and structures that you haveto have in place because otherwise you
would be running your business unlawfully.
, and secondly, and I think probably moreimportantly from a practical perspective,
if you could just get these sort offairly simple legal ducks in a row
night, you're gonna save yourself ahuge amount of headache down the line.
, whether that's, you know, in terms of.
(02:16):
Dodging fines or making your businessmore attractive to potential investors
or, buyers or even when it comesto dealing with, you know, larger
customer contracts or supplieragreements, or building your team.
If you've got the legal structurein place from the beginning, you
are definitely saving yourselfheadaches further down the line.
I think this is a thing because for alot of people, so we talk a lot about the
(02:38):
back office of starting your business.
. All the slightly unsexy stuff, which Ithink can make people feel a bit nervous
cuz they don't know anything about it.
We talk a lot about the sort of financialside and now that we're throwing in
the legal side, we might have people'sheads spinning with, oh my gosh, I
don't know where to start with this.
So thinking about, okay, so I'veimagined that I've just started
(03:00):
my business, I've been going.
Three months, and I've got a handful ofclients, but I've started to create, I've
got my own website, I've got my own logo.
I've started to createtools to help my clients.
How early in my business journey do Ineed to start thinking about this stuff?
(03:21):
Is it straightaway?
Can I wait six months?
Like what's the real timeframe?
I mean, I think you've described areally sweet spot of when, , founders
should be thinking about some ofthe very early stage legal issues.
, one of the key ones, I think justexactly in the kind of timeline that
you've just described would be, Areyou at the stage where you are, solely
(03:42):
running your business as a sole traderor have you incorporated a separate
company so you've effectively got acompletely separate legal entity that
you contract, , with your customersthrough, and you have a, you know, a
separate bank account for that business?
, That's probably a goodtime to start doing that.
Realistically, the earlieryou do that, the better.
And you know, in terms ofactually how you go about setting
(04:05):
that up, it's really simple.
The company's post website forbusinesses in the UK is pretty
intuitive, at least when it comesto sort of setting up companies.
You can do it online.
, within about, I think, 15 minutes, andit costs, I think it's like 12 or 15
quid to incorporate a company online.
And you really don't have to, you know,have your, your sort of your business
(04:26):
name, your brand, or anything locked down.
You can just be, you know, you cango pretty basic and just call it
Gretchen Lennon Unlimited, just.
Get a business incorporated.
, you can change the name furtherdown the line if you need to.
, but that's probably one of the first stepsin terms of the legal structure of how
you run your business and how you kindof keep it separate from you yourself.
(04:47):
Yeah.
, what would be then, I think, sorry to,but what would be the, one of the big
reasons to move to an incorporated companyrather than working as a sole trader?
, the biggest reason is separatingbusiness liabilities or business
debts from personal liabilities andto kind of, I guess really kind of
(05:09):
play that out in practical terms.
If your business isn't doingparticularly well and you ultimately
end up going insolvent andlet's hope that doesn't happen.
But if it were to happen, if you werejust operating as a sole trader, so
all of the business debts and all ofyour personal debts are effectively
all one, that is a potential risk thatyou could lose your personal assets
(05:32):
in order or you would be obliged tosell your personal assets in order to
pay off some of those business debts.
The most obvious and I suppose terrifying.
One of those is your house.
If you're a sole trader, there is arisk that your house could be at risk
or exposed if you end up in insolvencyin your business and have to sort of,
(05:52):
you know, pay off as much of, , ofthese very large debts as you can with
whatever personal assets you have.
If you have incorporated a separatebusiness, you've effectively got your.
Your personal assets, your personallife, and your business assets and
debts as two separate legal entities.
Even though you may only be thesole shareholder of that business
(06:14):
in the eyes of the law, theyare two separate legal entities.
So your personal assets are no longerexposed or at risk, , as a result of the
debts or liabilities of your company.
Okay, so we started heavy with what?
Yeah.
Yeah, lawyers do like to jump tothe sort of worst case scenario,
(06:35):
but no, it does make total senseand I think it's something that is
really good to think about early on.
And as you say at that kind ofsweet spot where this isn't just
a hobby anymore, this is actuallya business that you're going, I.
Full out with, in terms of bringingclients, then that's the time you do
also, I mean, I'm, I'm not an accountantnor a tax advisor by any stretch of the
imagination, but I think once you haveyour business set up and therefore your
(06:58):
sort of, you know, your business revenuesand costs are separate to your personal.
, income and costs.
There can be potentially some taxbenefits from doing it that way as well.
Yeah, as I said, absolutely, definitelynot a tax advisor, but, it, it's
worth speaking to someone about thatbecause, , yeah, it can be a lot more
tax efficient from, , in some instancesto have your business set up under
(07:21):
a separate company than your, your.
Your personal expenses.
Yeah.
Fantastic.
And that's something actually thatPip, who I normally co-host with,
, can go into a bit more detail on.
So we'll you an episode, a followup episode on that as well.
Okay.
So we've talked about,, incorporating the company.
What's the next sort of big thing on thelist that we should be thinking about
(07:42):
at this early stage of our startup?
So the next big thing that Iwould definitely always speak
to clients about is, , who areyou running your business with?
And if it's just you, great.
But if it's you plus afriend, a co-founder, you
know, a co shareholder, then.
Absolutely as early as possible.
You probably wanna think aboutgetting in place a finder's agreement
(08:02):
or a shareholder's agreement.
And again, not to sort of gostraight to the sort of, you
know, doom and glim of it all.
But, , if you think of a shareholder'sagreement or a finder's agreement
as a prenup, , you basically are.
With your co-founder or yourco-founders agreeing the terms
in which your businesses run, youknow, sort of the, the co-ownership.
What happens if one of you wants to sell?
(08:23):
What happens if one of you wants toleave or you know, gosh, what even
happens if one of you passes away?
Then the founder's agreement willprovide for all of that at a time when.
All of you are on really good formtogether and you know, sort of like the
relationship between, youre very positive.
So then if, for example, thingswere to break down in the future
and then maybe, you know, thereof one other, if you did want.
(08:48):
You don't have to sort of try andresolve that argument at that time.
You've already pre-agreed the processand who's gonna get what, and it's set
out quite neatly in a legal agreement.
, founders' agreements are alsoreally helpful for other reasons.
They can kind of quite clearly focus yourminds on what are your sort of, , each
other's minimum commitments and to eachother's expectations of the other and.
(09:10):
And yeah, they can just kind of helpyou with the general governance of
how the business is gonna be run.
, so definitely worth gettinga's agreement in place earlier.
I also don't wanna go doom and gloom,but do you have any examples of,
, obviously you can't name clients, butsort of vague stories that give an
example where perhaps someone hasn'tdone this and it's gone a bit wrong.
(09:33):
Yeah, I do actually have, , sortof an example that I, for quite
a few clients, , and this was asituation where we had two, I think
actually maybe three co-founders and.
Two of them wanted to sell and the third.
Effectively kind of just got, Iguess, really just left behind.
(09:54):
And the two who wanted tosell collectively owned more
than 80% of the business.
So they were able to sell their sharesto a, a, a third party buyer who,
when, when they came in, they acquireda sort of an 85% interest in the
business, which is more than enough.
Generally we call it acontrolling interest.
So if you only 85%, you can prettymuch make most decisions within
(10:17):
the business without having to get.
Full, a hundred percentshareholder on board.
So these two co-founders found a buyer,agreed a price, sold their shares, you
know, for quite a handsome sum, anddisappeared off into the sunset, leaving
behind the third original shareholder.
(10:37):
The, , new buyer wasn't interested inbuying the, the remaining 15 ish percent.
They didn't need it.
They already had thecontrolling interest and.
The, the third shareholder then, whowas left behind then was a minority
shareholder in his own business witha new buyer who he didn't really
have a relationship with or didn'tparticularly want to work with.
(10:59):
And because he had such a minoritystake, he didn't have a very attractive
offering to be able to then sellthose shares onto anyone else.
So he sort of left like abit of a sitting duck really.
, in a company that he's helped find Annie.
I, , you know, Enjoy the payday thatis, do other co-founders kind of
organized sort of behind his back?
That is a terrible situation.
(11:20):
Yeah.
Not great.
, and I, I mean, there is sort ofvarious things that we could look
into to maybe try and resolvethe situation a little bit.
But honestly, a well draftedco-founder agreement from the
beginning would've avoided that.
Yeah, because it would've saidif two want to sell, the third
has to be, has to be consulted.
Yeah, exactly.
That initial, the third has to beconsulted or maybe would've had to have,
(11:41):
had the right to sell into the transactionon the same terms, at the same price.
So he could also enjoy his paydayand force the buyer to buy a
hundred percent of the company.
, or maybe the two who wanted to sell,could have, , had an obligation
to offer to sell to him first.
Before selling to a third party.
Yeah, there's, there's lots of differentstructures that we would very typically
(12:03):
put into a founder's agreement that thesepeople just didn't have, and so he had
very little legal protection at that time.
And I think it happened.
It does actually sadly happen so often.
You do see often best friends setting upbusinesses together, which is great, and
it's all full of enthusiasm to start with,but then one's really pulling their weight
(12:23):
and one really isn't pulling their weightor, , but that's a very common example.
Life lifestyles change, maybe one.
They, they go off offer maternityleave and then actually their family
becomes more important perhaps thanthe , their commitments change.
Yeah, exactly.
And then you can really havesome big fallouts at the end
of that, which, . Absolutely.
And, and I think that'sa really important one.
(12:45):
It's the expectation of commitmentto the business, um, and how
much effort you, you're gonna putin versus, , what shareholding
you're gonna have in the business.
So a lot of, you know, as you say to.
Spends, co-founders go in and they owna business 50 50, and then very suddenly
it becomes apparent that only one ofthem is really pulling all the weight and
the other isn't, but yet they're stillon paper 50 50 co-owners and therefore
(13:09):
entitled to, you know, 50 50 of profitsor seal proceeds if they were to sell.
, so yeah, founders agreements can be avery useful tool in dealing with what
happens in that sort of situation.
And as I say, sort of havingit all agreed and, and written
down before it actually arises.
Yeah, so it helps to minimizethe , the a tensions and also when
(13:30):
you are negotiating, then you cando it in a quite light-hearted
way cuz it's all hypothetical.
You know, hypothetically, if I'mdoing more work in the business than
you, then this is how it would work.
Or if it goes the other way Yeah.
You know, you can keep it quite easy.
Absolutely.
And.
Exactly as you say.
You know, you're sort of thinking aboutit hypothetically, but you're also
thinking about it from the point of viewof, okay, well if I were the one who
(13:51):
was doing more work, how would I feel?
But also if I were the one who wantedto maybe take a bit of step back.
How so?
When you're negotiating.
You, we sort of try and think about itfrom both sides, , of the table so that
you try and reach a, a sort of fairand balanced the position as possible.
Yeah, absolutely.
Cuz you never know what's gonna happen.
So thinking about that, okay, sowe're incorporating the business
(14:12):
potentially, , founders agreementif we started with someone else,
. What else are we thinking about?
I think we talked about the fact thatmaybe we are starting to, we've got a
website, we've got a bit of a brand, we'restarting to produce some of our own work.
Yes.
, what do we need to thinkabout in that respect?
So, Absolutely, this is thetime if you haven't already
(14:33):
done it, to secure your domain.
If you've got your website, you'veprobably already got your domain.
You might wanna kind of get acouple of other domains as well.
Even if you're not actively usingthem, just lock them down so no
one else comes along and sortof switch them from under you.
Similarly, get your trademarks registered.
, again, it can be fairlyeasy to do this online.
, you know, the, the UK trademark offices.
You pretty straightforward.
(14:54):
You should register your logo, yourbrand name, and yeah, maybe any other
sort of brands or logos that you'realso thinking about using in the future.
Just as I said, with same with thedemands, just to get them secure to
prevent anyone else from taking them.
Yeah, that's such a big thing, like ifyou've put all that work into, firstly
thinking of your business name, designingthe website, getting those trademark,
(15:18):
getting the logos, and then somebody else.
Because if you think a lot of ourclients are probably working online,
so it's very easy for people to seeyour business and what you are doing.
And copy it, steal it.
Copy massively.
Yeah.
So if you lock that down,you've got no comeback.
They, they could take yourname, trademark it themselves.
(15:39):
Yeah.
And then, and then you've got,and then, and then, and then
you're sort of in, almost like ina bit of an extortion situation.
Like they could attempt to sell thetrademark to you and you have to pay just
to have the name that you're the one thatcame up with, or the, you know, the logo,
the brand that you up the first place.
So yeah, definitely.
Your logo and your brand andyour domains and, and your
(16:00):
social media handles as well.
You know, even if you think, oh, I'mnever gonna use TikTok or Instagram
to promote my business, just getthe handles that the accounts locked
down so someone else can't come alongand, and, and take them from you.
, and then also on the same theme ofreally protecting your ip, make sure
that whatever agreements you havein place with the people who are
(16:21):
coming up with or helping you come upwith the ip, you know, maybe design.
Your logos, make sure thatthe, , contractual agreements
that you have in place with themhave really robust IP clauses.
So if you engage, a graphic designerto help you with your logo or a
website designer to build your websitefor you, , or whoever it might be.
Or even if it's a sort of a member ofyour team, whether it's an employee
(16:45):
or , you know, consultant or contractor.
Make sure that.
Whatever IP they may be coming up with foryour business, there are provisions in the
contract that you have with them that saythat that IP is assigned or effectively
transferred over to your business.
So there's no dispute further down theline that you know, someone who used
(17:05):
to work for you and then disappearsoff as actually, well, I, I designed
that product, or I designed that logoor whatever and therefore I own it.
And so, yeah.
Fairly robust IP ownership clauses in thecontracts that you have with the people
who may be doing IP or, or creating IPfor you, whether that's your team members,
your, you know, your sort of your,
(17:26):
, whoever it is and get those.
And then, yeah, her ship is one of theareas that when you then do eventually
come to sell your business, yourpotential investors or buyers will
really want to look at, because usuallyIP is one of the main assets or sort
of items of value within your business.
And if you don't own it,potentially your business isn't
worth as much as you think it's.
(17:46):
. That is a, a huge point actually.
, and it's all about when youcome to sell your business.
And I think we might not have time togo into that this week, but definitely
something for a follow up episode.
The things you need to thinkabout it is all about the
things that your business owns.
, all those assets definitely likethe ip, the, the clients like.
I mean, obviously you don't ownyour clients, but you own your
client list, that sort of thing.
(18:07):
So many different aspects around that.
, just a quick question.
So this sounds like quite abig job and quite daunting.
If, if someone was to come to you andsay, okay, how do I lock down all my ip?
What do I need to do?
, how would you work with them on that?
So, trademark registration is actuallyprobably more of a specialist role,
(18:29):
and we would put you in touch withour, , specialist trademark partners
who can definitely help on that.
But when it comes to, , the thingslike your, the, the provisions
in your contracts, absolutely.
That's somewhere we can help and.
, sort of, I guess, you know, more generallyhaving a fairly decent template employment
contract or consultancy agreement ifyou're just bringing your team members on
(18:51):
as, as freelancers maybe in the beginning.
, that's definitely an area we can help.
And there are certain provisionsthat you, you have to have by law.
, and then there are other clausesthat you just wanna make sure are as.
Reasonable, but as protectiveof your business as possible.
And that's not just in terms of the IPownership, but also, you know, things
like, for example, like notice clauses,, or even, you know, things like with your
(19:15):
team talking about like what happens ifsomebody needs tick holiday or sick pay.
, and then the other area where it'sdefinitely worth thinking about.
, is whether you wanna put in place anykind of non-competes or, , any sort
of provisions in the, , contracts withyour team members that will protect
your company if they were to try andthen set up in competition or maybe
(19:39):
move to a competitor after they finishworking for you because, you know, team
members move on, but you don't want themnecessarily moving on and, you know,
setting up in competition next door orstealing all your clients or even trying
to poach your remaining team members.
So, yeah.
Yeah.
The, the contracts that you putin place with your team at the
beginning are important to you.
(20:01):
You don't want 'em to be toodraconian, but you also need
them to protect your business.
, yeah.
And there's a sort of, there's a,there's a balancing act to be had there.
I do think, yeah.
I completely agree with that.
And I think employment contractsdon't need to be complicated, but
it's just making sure that you've gotthose, those particular things in.
I know that I work witha lot of coaches who.
(20:23):
Perhaps want to bring other coachesinto their business to take, you know,
take on some of their client delivery.
But that's definitely a concernfor people, you know, what if they,
what if they steal my business?
What if they move on?
, I know that it can be relativelyhard to follow up on that though.
In terms of what goes into the contract,you know, the non-compete courses,
(20:46):
having worked in, , recruitment,that was a big thing with us.
You know, if you left a firm.
It was a big non-compete and you wereoften put on gardening leave so that
there was a clear break between youand your clients so that the team
that you had left behind could get inthere and rebuild those relationships
that you were kind of key in.
Yeah.
While you sort of took some time outaway from business so that when you
(21:09):
started in your new role, it was not aseasy for you to, to bring those clients
with you cause there'd been quite a gap.
, is there anything that you wouldrecommend, , To make this feel
easier for people when they'retaking people on that they're not
gonna run off with their business.
, We could definitely talk about whatare the, what are the real threats,
because it's important to look atthose sorts of non-competes from
(21:33):
the perspective of obviously how toprotect your business, but also what's
reasonable for your team and what's notgonna appear as so harsh and draconian
that it might even potentially beoffputting to potential new hires.
Particularly if you're looking for someoneyou know, who's reasonably experienced
or senior who's maybe had a few otherroles within the industry already.
, You know, they may be sort ofconsidering a few different offers,
(21:55):
and if you've got the mo the mostsort of, , restrictive contract,
you may not be their first choice.
, so you probably want to have a, if youare going to go down the road of having a
non-compete clause or a non-solicitationclause, you know, no poaching of clients,
, in your contract, you wanna think aboutkeeping that as narrow as possible.
So it really is only capturing the.
(22:19):
Like the, the real threatthat you're perceiving.
So you know, if, if you're runninga business that is sort of.
Specific to a particular geographic area.
, you know, if you're providing a, a sortof an in-person service to clients,
it's, you know, it's not done remotely,then realistically you only need your
non-compete to be as wide as to coverthe geographic area where you operate.
You don't need it to be nationwide.
(22:40):
You don't need it to be global.
And actually from a legal perspective,if you do try and cast the net,
these kinds things, court holdable.
And likewise, you know, when you'retalking clients, , It's, it's considered
fair and reasonable to keep those kindsof non-solicitation clauses limited to
only those clients that the employeein question actually had a relationship
(23:03):
with, or actually, you know, sort of didsome work with or had some contact with.
Again, if you cast the net, so whythat it's all of your clients or
potential clients anywhere in themarket, then that's actually deemed to
be an unreasonable restraint of tradeand, you know, it, it would be sort
of unfairly trying to keep someone.
Of the market and ofthe industry altogether.
So we would definitely have tothink about what is the, what is
(23:25):
the real threat to your genuineand legitimate business interests?
And how do we kinda get thescope of the non-compete, right?
So that it's fair and reasonable, , toyour team members, but also so that
it adequately protects you as well.
, absolutely, and, and, and, you know, otherthings to think about as well, of course.
Ideally your clients wouldn't even beconsidering leaving even if you lose
(23:47):
a team member because they're sortof so happy and satisfied with your
business service anyway, so Exactly.
It's not just the legal element of it.
Yeah, and and I would really stressthat because I think this is something
I hear from people a lot and I, I thinkthat people are coming into it with the
negative mindset straight away actually.
What if you know, this person thatyou're bringing into your business
(24:09):
is just one cog in an amazing servicethat you're delivering to your clients.
So actually, if they leave having beenbrilliant within the business, and they
go and start something of their own, youknow, good on them, great luck to them.
, but actually they were just a smallpart of the incredible service that
you were delivering to your clients.
So for your client, actually, Is itreally worth them moving away to someone
(24:35):
else that's just providing part of a bigservice that they're getting with you?
So yeah, I think there's definitelyprotect yourself legally,
but there's so many differentways to look at that as well.
, so that you aren't beingfearful about hiring people.
Yeah, definitely.
Okay, so we've got a few things there.
So we incorporating the company,we've got the founder's agreement.
(24:57):
We're talking about registering,trademark, , contracts,
that sort of thing.
When we're bringing in our firstteam players, what are we missing?
What else do we need to talk about?
And then I, I think the other sort ofmain thing, you were kind of talking
about contracts with team players.
You also wanna think about contracts withyour customers or terms and conditions
with your customers, depending on sortof, The nature of the products or the
(25:17):
services that you're selling and, and, andwhat kind of relationship you would have.
But things like, you know, if you'reoperating on a kind of, I don't know,
like a subscription type arrangement,if that's your business model, you wanna
make sure that the, , provisions in yourcustomer contract or your customer Ts
and Cs are, first of all, you wanna makesure that they act accurately describe.
(25:40):
Your business arrangement or yourcontractual arrangement with your clients,
but then you also want to make sure thatyou are protected against things like
when your clients maybe wanna terminatethe agreement, , you know, can they just
terminate immediately and walk away?
Or do they have to give you a minimumnotice period or are they locked in
for a sort of, You know, a minimumsort of three month or 12 month
subscription period, and then theycan only terminate at the end of that.
(26:02):
, similarly, do you have asort of an auto renewal?
So at the end of the first 12months, the contract just ticks over
and immediately another 12 monthstarts, or you know, do you then
go onto a rolling one month basis?
, You also wanna think about, , the paymentprovisions and invoicing and what happens
if your clients are paying late andwhether you're gonna charge them interest.
(26:24):
, if, if you're sort of providing an ongoingservice, you want to potentially have
the right to suspend the provision ofthe service until, Payments for, made.
All of these kinds of things youwould build into your, , contract.
Likewise, what are the kindof minimum, , kind of quality
assurances that you want to provide?
(26:45):
, or if it's a, you know, an access tolike an online service or a platform,
did you have the right kinda, youknow, turn it off, , at certain times.
, okay.
So quite few things to thinkabout, , for your customer contract.
Yeah.
Okay.
Perfect.
So yeah, there's quite a bit there andI think for a lot of the people, , that
(27:06):
are listening, bringing in those clientcontracts is really, really important.
And I think it can be something thatpeople skim over or perhaps they're
just pulling one from somebody else'sand kind of making a copy of it.
Yeah, that's very tempting.
Yeah.
Yeah.
That's not a good idea.
But then someone else isn'tmaybe putting your name on it.
Exactly.
(27:26):
But why isn't that a good idea?
, I think it's, , very often thesekinds of either cribbing someone
else's or, or finding a sortof off the shelf, , product.
You know, you can, there aresome sort of off the shelf
legal document providers online.
They can maybe cover sort of 80to 85% of what you need, but it's
(27:48):
quite likely that they won't.
Absolutely fit your business model ordo exactly what you need them to do.
Or maybe they include a provision that youdon't want or don't understand, and then
you've ended up kind of giving away toomuch contractually, , or you don't have
the protection that you thought you had.
, and.
You know, exactly as you say,do you, these contracts don't
(28:10):
have to be very difficult.
These Ts and Cs and in particular,the language that they're written in
doesn't have to be, you know, sort ofall this impenetrable legal jargon.
You can have a contract that's written inreally plain, in English, so particularly
if you're pulling something, you know,off someone else's website or whatever,
and maybe there's something in therethat you don't actually understand.
That's not the right contract foryou, because if you don't understand.
(28:32):
Then how are your customersgonna understand it?
, so yeah, I think maybe that's a goodstarting point, but definitely then get
it toed to, to your business and Yeah.
And so that you, I love, I love thisidea of like plain English contracts
because I just think it's so good foryour clients to understand exactly
what they're signing up to too.
So if.
(28:53):
If they decide, oh, maybe I could getout of this contract, and then they
actually read through it and they don'tunderstand any of it, then it doesn't
really help with their situation.
But if they can read through andplain English and they're like,
okay, yeah, this makes sense.
Unfortunately I am, you know,contracted to keep going or da
da da da da, then it's great.
Yeah, I've got a 30 day notice period,so I just have to, you know, pay
(29:15):
out another 30 days and, and thenI'm free to terminate if I want to.
Yeah, exactly that.
I think, , You want it in plainEnglish so you can understand that,
and I think your clients definitelywant it in English as well.
Yeah, definitely.
Okay, so anything we've missed for thisperson that is just starting their startup
somewhere between nor and 12 months.
(29:37):
I mean, some people get to 12months and they haven't done any
of this yet, so don't worry ifyou haven't, it's not too late.
Just crack on.
That's very true.
Definitely don't worry.
, a couple of more on the sort of, youknow, do these because you have to
by law type, , things to consider.
, you wanna make sure that your HM R C filings and your company's
house filings are up to date.
, Probably more on the accountancy side.
(29:58):
Usually a lot of small businessaccountants will not only manage your
H M R C filings, but they'll also helpwith your company's house filings.
, it's just a bit of a wrap in the knucklesand maybe a fine if you are, leave it
with your deadlines and miss your filings,but it's not something that it's worth,
you know, really falling behind on.
, so yeah, definitely get yourducks in a row with those.
Likewise.
(30:20):
Consider whether or not you need toregister with the Data Protection Office.
, does your business handlequite a lot of personal data?
Are you collecting lots of personalinformation from your, , clients
or your website users or whomever?
What do you do with that personal data?
Do you transfer it ontoany other third parties?
Do you sell it?
And if so, you probably want to registerwith the data protection office and then
(30:40):
make sure protection policies and, and so.
Legal statutory requirementis, , if you have employees in the
uk, , you are required to put inplace a workplace pension scheme.
So that's the, the autoenrollment, , pensions in the uk.
(31:03):
And again, I think a lot of smallbusinesses bringing in their, you
know, their first or second employee,they maybe overlook the requirement,
the time you on your first employee.
, so yeah, are definitely.
Minimum legal requirements tomake sure that you're meeting.
And then another one is it's, , notnecessarily minimum legal requirement,
(31:24):
but it's, well, it probably is,but it's definitely something you
wanna think about is the appropriateinsurance policies for your business.
So whether that's your product,liability insurance, if you're selling
products, your employer's liability,if you have employees and or your
professional indemnity insurance ifyou're offering professional services.
, Those are the kinds of insurance policies,so that if something were to go wrong
(31:45):
and maybe a customer then perhaps triedto bring a claim against you, or even an
employee tried to bring a claim againstyou, you've got insurance to cover those.
Yeah.
Okay.
Makes sense.
This has made me think of a, a slightlyoff topic question, , but something that
has come up for a few clients recentlywho are small businesses, service-based
businesses, wanting to go in and workwith bigger corporate businesses.
(32:08):
Mm-hmm.
So we're talking like thebigger accountancy firms.
Or you know, those well-known bigbusinesses, hundreds of employees,
global and contracts, and they'vegot big supplier contracts that
you're expected to sign up to.
Exactly.
Okay.
So what's that work?
Because they're never gonna, I know thatthey never agree to the little person's
contract because they would have too manycontracts to look forward to look through.
(32:32):
So they've created this massive contractthat covers like every eventuality.
, what would you suggest when facedwith one of those supplier contracts?
Yeah, they're very daunting for sure.
, I mean, not to sort of, you know,be trying to blow my own trumpet too
much, but I think really you probablydo want to have it, at least give
(32:55):
it a good read through yourself.
, if you, you know, sort feel confidentthat you read it and understand it.
If not, you probably dowanna speak to a lawyer.
Kind of key things you wanna be lookingout for are, uh, the payment provisions.
, you know, when do they have to pay you by?
A lot of these very big players willoften say that invoices only have to be
(33:16):
paid within 60 or maybe even 90 days.
90 days is a long time for you towait for your invoices to be paid,
particularly if you're used tothem being paid maybe a day cycle.
There may not be much riggleroom with that, but you should at
least, you know, have a look forit in the contract and be aware.
, similarly with termination provisions,, again, if you're expecting this, you
(33:40):
know, this great new client to signup for a minimum 12 month contract,
but actually there's a provisionsomewhere in there that says that
they can terminate at any time on, youknow, a week's notice or something.
That's, Yeah, that'spretty terrible for you.
So ideally you'd wanna try andpush back on that where you can.
, they probably have some fairly sortof high thresholds on liability and
(34:02):
exposure and maybe even insurances.
They expect you to put in place.
Sometimes even large clientsexpect them to be listed on your
insurance policies as beneficiaries.
Depending on the nature of theservices and what you're doing, and
also depending on the value of thecontract and the potential exposure
that you face, you may decide to takethe commercial decision to just not
(34:28):
worry about those kinds of things.
You know, if you're, for example, , liketaking your business charges, you
know, if you're going, you're doing a
sort of webinar or a seminar on, , Sortof, , like some coaching for them.
Chances are you're not reallygonna have too much legal exposure.
(34:48):
, you know, it's very unlikely thattheir business is gonna suffer huge
amounts of loss because of somethingyou may or may not have done when
you were delivering that seminar.
So, well, we would hope not.
We would absolutely hope not.
, whereas, you know, ifyou are, I don't know.
A business that's providing themwith some sort of, , IT security
(35:09):
or data security services?
Yes.
Ok.
And then some kinda breach as, and there'ssome kind of breach then, you know,
there is potentially some pretty largeexposure and liability there that you as
the supplier could be on the hook for.
Yeah.
So yeah, you, you pretty much have tosort of weigh up the balance of what's
the real risk to you, you know, what'sthe real value of the contract and.
(35:34):
Versus how much liability are theytrying to push on you and, and
these big players will try andpush as much onto you as possible.
But yeah, instances youmight just decide it.
Yeah.
So some things need to be possiblypushed back on, but definitely
get, look to read it over there.
But I think also as you say, is lookingfor those clauses, like the payment
(35:55):
clauses and thinking, okay, I'm notgonna be paid for 90 days for this.
Yeah.
I essentially can't drop all my otherwork and focus on this for a month
if I'm used to I regular cash flowbecause, I'm, I'm gonna be in trouble
in two months time because yeah, moneyisn't gonna come in for a while and
I've been busy working on their projectand not generating any other income.
(36:16):
So thinking about how doesthis sit with my pipeline?
So then you're thinking about, you know,your financial overall, like can you
take Exactly and potentially even givenconsideration to whether they're scoped,
to negotiate with them that you get like,you know, 25% paid upfront or something.
So the three month doesn'tfeel quite sustainy.
Exactly and you could, you know, putthat as a development cost versus a
(36:39):
delivery cost or something like that.
Yeah.
Okay, fine.
So we've covered quite a lot of stuff.
, yeah.
And hopefully we haven't lefteveryone with doom and gloom.
I'm just wondering, have you got any,a really good story or something where,
I dunno, someone has put this legalstuff in place and it's actually really
(37:00):
saved their bacon further down the line.
You worked with recently and youthought, oh, do you know what?
Thank God we did that, or Thankgoodness they put that in place.
, I mean, well one customer, actuallyone client came to me recently and they
said that they had a, a quite a large,uh, client in the US and they, they
(37:21):
provide, , I think it's SEO services theyprovide, it's on a 12 month subscription.
And they came to me and said that theyhad just had one of their large clients in
the US say they wanna cancel the contractand they're giving them 30 days notice.
And they were like, youknow, this is terrible.
I, I thought we had them ona rolling 12 month contract.
Can you, you know, checkour Ts and Cs and confirm?
(37:42):
And so it was quite satisfying to beable to go back and look at their Ts and
Cs that we'd help put, we'd help themput together quite a few years ago now.
And they did in fact, say you're on a12 month contract, which, , you have
30 days to terminate at the end of that12 months, and if you don't terminate
within those 30 days, then you're ontoanother rolling 12 month contract.
(38:04):
And it just continues onthis rolling 12 month basis.
So it was quite satisfying tobe able to tell that client.
Don't worry, they are outsidethat 30 day termination window.
So they have already ruledinto another 12 months.
So, They are on the hook for Yeah,the minimum 12 month subscription.
So even if they do wanna leave you, andhopefully they won't, they still have
(38:26):
to pay you for the what's remainingof this current 12 month period.
, so yeah, I, I guess that's asort of a, a small example.
, other examples that I, I see kind oftime and time again are really on the,
, the IP and trademark ownership front.
It's usually when, , businesses arekind of coming to the stage where
they wanna bring in investors andinvestors are asking lots of questions.
(38:50):
You know, they're doing theirdue diligence, they want to know.
All about your main customer contracts.
They wanna know allabout your IP ownership.
And so to be able to say, , yes, wehave registered this trademark, or,
yes, we've got these IP, , provisionsin our employment contracts or
in our, , contractor agreements.
And it just gives theinvestor a lot of confidence.
One, that the IP ownership is locked in.
(39:12):
And also too, that, you know, you, you'vegot your, you've got your house in order.
Yeah.
, so yeah, that definitely a big one.
Okay.
So of all the things we've mentioned,going back to my example of three months
in just getting going with the business,what are the top if, if I'm might, okay,
this is great, but that is so much stuff.
(39:32):
Where do I begin?
Yeah, what are the, it feelsthat might be a bit overwhelming.
Yeah.
The first three that you would say,okay, start looking into these.
So incorporate your company ifyou haven't done so already.
, and just keep your personal financesseparate from your businesses.
Is, is really advisable.
, get your founder's agreement in placeif you're running your business with
(39:52):
a co-founder and then your, yeah, the,, employment contract or consultancy
agreements with your team once you'restarting to bring your hires in.
And then, , your, your IP ownership.
So your, your demands, your socialmedia handles, and your trademarks.
Ok.
Those are the top.
I think that was probablyfour things, but that's fine.
Integration, founders'agreement, employment contracts.
(40:13):
Trademarks seems much more achievablewhen we put them as the bullets like that.
And if people wanted to come and workwith you on this, how could they do that?
Absolutely.
So I mean, yeah, feel free to checkout our website, lenon legal.com.
We've got some sort of, , articles and,and useful pieces of information there.
, we're actually in the process ofputting together a sort of, , an
(40:34):
information pack, which summarizessome of these key legal issues for
startups that we've just talked about.
So that's gonna be availablefor free on our website.
Very soon, , or contact us directly.
, there's a, a contact us form on thewebsite and get in touch and we can chat
through whatever legal issues you'reconcerned about and how we can help you.
And we'll put all of thoselinks on the show notes as well.
(40:55):
So just jump down andhave a look at those.
I know that there's so many otherthings to get into and I would love to.
Kind of get you back for anotherepisode to talk about the next.
I'd love that stage and maybeeven the stage after that.
So maybe we've got a stagewhere we're up and running.
What are the challengeswe might be facing?
Mm-hmm.
Perhaps if anyone that's listening has anyquestions, feel free to send them to me
(41:18):
via, , Instagram is probably the best way.
I'll collate those and getGretchen back for a bit of a.
How do we deal with this situation?
, and then also looking at what we need todo when we're preparing to sell, because
perhaps you are five years away from that,but you're thinking, do you know what?
I know that between now and thenext five years, I'm building this
business up because I want to sell it.
(41:39):
And the earlier you start thinking aboutthe different things that you need to
get in place, the better, particularly.
If you are looking to kind of sell thaton to perhaps private equity or mm-hmm.
, something like that, then you wannamake sure that you've got certain
things organized because it'sgonna massively increase your sale
(41:59):
price if you've got those things.
Already underway.
Am I right?
Yeah.
It's, it's massively gonna increasethe value of your business and
it's just gonna make the, theprocess of the exit so much easier.
You know, there's a lot of movingpieces when you're going through, an
exit transaction and yeah, that, asyou say, Georgia, the more that you
can kind of, , get things in place and,and get the right sort of structures,
(42:23):
, in place in advance, the smoother,hopefully the transaction should.
Yeah, absolutely.
Okay.
So drop me any questions if, , ifpeople wanna know more, particularly
if you've got any questions aroundshare option agreements, funding
rounds, and what employment contracts.
Yeah, all of that.
, and we can answer all ofthose and another episode.
(42:43):
But thanks so much forjoining me, Gretchen.
It was lovely to chat with you.
Thanks so much for having me.
It was really great.
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