hcmc august 27 - startup legal and ip: christian schaefer

8/20/2019 HCMC August 27 - Startup Legal and IP: Christian Schaefer

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BUILDING A LEGAL AND IPSTRATEGY FOR START UPS

CHRISTIAN SCHAEFER & MINH DUONG



READY TO JUMP?

WHAT DO YOU NEED

! Legal and IP Strategy for Startups

! Legal Issues for Receiving Investment

! Basic Business Laws

! Setup New Company

! Copyrights/Trademarks/Patents

! Avoid Common Legal Mistakes



WHERE’S THE VALUE IN LAW?

! Compliance

! Protection

! Recognition

! Governance

=

Value



YOUR OBJECTIVES DETERMINE YOUR(LEGAL) STRATEGY

! Purpose

! Funding

! Co-Founder Issues

! Operations

! Exit



PURPOSE

IF YOU WANT TO DREAM, GO TO SLEEP

! Not so much a legal issue,but…

! Legal issues when looking atdifferent sectors (regulated vs.

unregulated)

! What are core legalrequirements that impact onthe business (licenses,restrictions etc.)



FUNDING

! Funding requirements for your business

! Funding sources (retained earnings, friends &family vs. institutional, classical lenders/banks)

!

Debt vs Equity! Expectations of different investors

! Rewards and Returns!

Control and security!

Dilution!

Management participation!

Priority (e.g. on liquidation)

!

Contractual side of things!

Loan (e.g. convertible or participating)! Shareholders Agreements



FUNDING- EXAMPLE

Sample Term Sheet / Investment Proposal:

! 10% equity plus 10-20% convertible loan atoriginal valuation / pre-money valuation

!

Convertible loan: 15-20% interest p.a.

! Put option for equity interest (on company orfounder) at certain multiple after 3 years ifcertain milestones are not met (e.g. IPO ornew financing series)



CO-FOUNDER ISSUES

! Founder agreements

! Typical issues

!

Commitment and

contributions

!

The money question

!

The objectives (purpose

vs financial reward)

! Exit/ Separation

!

Unexpected events



OPERATIONS

! Value of templates and contract forms(e.g. service contracts, customercontracts, labour contracts etc.)

! Standard terms of business

! In-house lawyer vs external lawyers

! Monitoring legal compliance



EXIT

! Often overlooked

! Separation of the business(clients, assets, IP, …)

!

How long are founderslocked up?

! Buy-out clauses



COPYRIGHTS/ TRADEMARKS/ PATENTS

IT’S ALL ABOUT PROTECTION

! Value of IP protection

! Terms and definitions

!

Costs and benefits

! How to register / protect a copyright/trademark/ patent

! Territoriality

!

Enforcement



COMMON LEGAL MISTAKES

! Naming without prior research

! Failure to document my relationships with co-founders (in particular: founders’ agreement)

!

Employees and contractors

! Failure to protect my IP

! Lack of mandatory filings

! The company’s domain name (e.g. whoregisters the domain?)

! Tax issues

hcmc august 27 - startup legal and ip: christian schaefer

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