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Top ten legal mistakes made by entrepreneurs

By Lincoln Kim @ MaRS

November 13, 2006

 

Boston Legal: lawyers in pants
originally uploaded by LordKhan

Written by a Harvard Business School professor who specializes in Entrepreneurial Management, this list covers the legal aspects of entrepreneurship, from hiring the right lawyer to international IP protection.

1. Thinking any legal problems can be solved later.
2. Promising more in the business plan than can be delivered and failing to comply with state and federal securities laws.
3. Starting a business while employed by a potential competitor, or hiring employees without first checking their agreements with the current employer and their knowledge of trade secrets.
4. Disclosing inventions without a nondisclosure agreement, or before the patent application is filed.
5. Waiting to consider international intellecutal property protection.
6. Negotiating venture capital financing based solely on the valuation.
7. Failing to make a timely Section 83(b) election.
8. Hiring a lawyer not experienced in dealing with entrepreneurs and venture capitalists.
9. Issuing founder shares without vesting.
10. Failing to incorporate early enough.

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