Legal Issues for Tech Startups
In the past, we shared a startup’s legal obligations. Continuing on the same theme, in general, at the early stages of starting up a tech company, legal issues are the last thing on founders’ minds. But, knowing potential problem areas can reduce the amount of time and money founders have to spend on legal matters. Here are a few things in particular that are likely to impact tech startups from a legal issue perspective:
- Confidentiality. Often, those in tech industries are expected to sign confidentiality and non-disclosure terms. Founders should review any such agreements they signed with former employers in at least the last five years to make sure that there are no clauses under which the former employer could own new developments.
- Law of Other Jurisdictions. Tech companies are likely to operate on a global scale. While the advantages of having consultants, contractors, and users in other countries is substantial, founders must make sure they comprehend applicable laws and regulations regarding privacy, tax, and intellectual property.
- Innovation. Innovation is the bread and butter of tech companies. But, new technologies bring new legal questions, and possible litigation risks. Uber, for example, arguably created a unique kind of worker that is difficult to categorize under the law as written, which led to massive litigation.
The best course of action for tech startups is to hire an attorney who understands the business and can help plan for legal challenges, so founders can focus on what they do best—developing and growing their business.
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