PTRBOA005: Laying the Legal Building Blocks for Your Venture The Bank of America Institute for Women’s Entrepreneurship at Cornell “Laying the Legal Building Blocks for Your Venture” Course Project Knowing your company’s vulnerabilities enables you to act to protect the business you’re working so hard to build. This project will help you evaluate the legal building blocks you have in place for your business so you can keep the door open to future opportunities and reduce legal risks. Part 1—Assess Your Legal Vulnerability: Structure, Ownership, and Funding In this part of the course project, you will use the tools Professor Bigoness provided in Module 1 to assess your progress toward getting your structure, ownership, and funding building blocks in place and to analyze your legal opportunities and vulnerabilities in these areas. Instructions: 1. For each building block, place an X in the box to the left of the statement that best describes the status. 2. Answer the analysis questions, using as much space as you need. Experienced Startup Lawyer I have a lawyer or legal services in place. I do not yet have a lawyer, or I need to look for a different lawyer. If you have a lawyer … − Is your lawyer experienced with startups? − Do you recognize any barriers or vulnerabilities in your relationship with your lawyer? Note them here. − Do you see evidence of unconscious gender bias from your lawyer? In what ways? − If you have recognized opportunities to improve the way you work with your lawyer, what first step will you take toward making positive changes? 1 © 2018 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. PTRBOA005: Laying the Legal Building Blocks for Your Venture The Bank of America Institute for Women’s Entrepreneurship at Cornell If you still need to find a lawyer… − Where will you look? − What questions will you ask? − What skills, experience, or characteristics will you look for? − What steps will you take to prevent unconscious gender biases from affecting your decisions about hiring or interactions with a potential lawyer? − What’s the next big step you need to take toward finding an experienced lawyer? Founders’ Agreement All founders have signed an agreement. The agreement has not yet been created/finalized, or not all founders have signed it. I am the sole founder; no agreement is needed. If you have a founders’ agreement in place… − Were any aspects of the agreement difficult to discuss with your co-founders? If so, why? − Did the founders’ checklist uncover any areas of vulnerability not addressed in your founders’ agreement? − Do you need to revisit any topics with your co-founders or lawyer? Note them here. − What’s the next big thing you need to do to address legal vulnerabilities you uncovered? 2 © 2018 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. PTRBOA005: Laying the Legal Building Blocks for Your Venture The Bank of America Institute for Women’s Entrepreneurship at Cornell If you still need to create or finalize your founders’ agreement… − Did the founders’ checklist uncover any legal vulnerabilities or risks you’re currently facing? Note them here. − What, if any, topics or questions in the founders’ checklist are you uncomfortable discussing with your co-founders? Why? − What challenges do you foresee in getting this agreement drafted and signed? − What’s the next big thing you need to do to get a founders’ agreement in place? Consider questions to explore with your lawyer, and think critically about how you may want to focus your conversation. Clear Ownership Clear ownership of the business has been determined and documented. I am still working to establish clear ownership. If you have established clear ownership… − Are you satisfied with how ownership was established? Have you noted any concerns or legal vulnerabilities? − Do you need to revisit any aspects of ownership with your co-founders or lawyer? You can note them here. − Have you started a capitalization table to track ownership and control? If not, what is holding you back? − Have you developed procedures to keep your cap table up to date? 3 © 2018 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. PTRBOA005: Laying the Legal Building Blocks for Your Venture The Bank of America Institute for Women’s Entrepreneurship at Cornell If you still need to establish clear ownership… − What questions do you have for your lawyer about determining who owns what portion of the company? − What challenges do you foresee in determining ownership and creating your cap table? − What’s the next big thing you need to do to get clear ownership established and cap table in place? Formalized Business Entity My business entity has been established; all required documents have been filed. I am still researching my options or getting my paperwork in order. If you have established your business entity… − Did the Business Entity Comparison Chart uncover any questions or uncertainties about the business entity you have chosen? If so, note them here. − Did the LLC Formation or Incorporation Checklist uncover any areas of vulnerability for your company? − Does your current business entity leave the door open for future funding and growth? If not, what questions do you have for your lawyer about changing your entity in the future? If you still need to decide on or establish your business entity… − What are your main considerations when you think about choosing a business entity? What are your biggest concerns? 4 © 2018 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. PTRBOA005: Laying the Legal Building Blocks for Your Venture The Bank of America Institute for Women’s Entrepreneurship at Cornell − What questions do you have for your lawyer about establishing a business entity? Think critically about how you may want to focus your conversation. − What’s the next big thing you need to do to start the formalization process? 5 © 2018 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. PTRBOA005: Laying the Legal Building Blocks for Your Venture The Bank of America Institute for Women’s Entrepreneurship at Cornell Part 2—Assess Your Legal Vulnerability: Hiring and Compensation In this part of the course project, you will use the tools Professor Bigoness provided in Module 2 to assess the way you plan to or already have put your hiring and compensation legal building blocks in place. You will also analyze your legal opportunities and vulnerabilities in these areas. Instructions: 1. For each building block, place an X in the box to the left of the statement that best describes the status. 2. Answer the analysis questions, using as much space as you need. Personnel Classifications I have classified my personnel (e.g., as employees or independent contractors). I have not classified my personnel. If you have classified your personnel… − Did you work with your lawyer to make sure your classifications are in line with the laws in your jurisdiction? − If you changed workers’ classifications, did you discuss possible tax and legal implications with your lawyer? − If you have employees, have you verified with your lawyer that you have met all legal obligations of an employer in your jurisdiction? − If you have written agreements in place with your personnel, are the terms of those agreements compatible with their classifications? If you have not classified your personnel… − What concerns or questions about classification do you have for your lawyer? − What’s the next big step you need to take toward properly classifying your employees and protecting your business from potential penalties? 6 © 2018 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. PTRBOA005: Laying the Legal Building Blocks for Your Venture The Bank of America Institute for Women’s Entrepreneurship at Cornell Incentive Compensation Plan I do not plan to offer incentive compensation. I have a written plan for how I will offer incentive compensation. I plan to offer incentive compensation but do not yet have a written incentive compensation plan. If you have an incentive compensation plan… − Did the Incentive Compensation Plan Checklist uncover any concerns or legal vulnerabilities? Note questions for your lawyer here. − Have you considered seeking specialized legal counsel to review your incentive compensation plan? − If you want a specialized lawyer to review your plan, how will you find the right lawyer? If you still need to establish an incentive compensation plan… − What questions do you have for your lawyer about incentive compensation plans? − Think critically about how you may want to focus your conversation with your lawyer to determine if you should seek specialized legal counsel to address securities law and tax law considerations. What questions can you ask? − What challenges do you foresee in establishing an incentive compensation plan? − What’s the next big thing you need to do to develop your incentive compensation plan? 7 © 2018 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. PTRBOA005: Laying the Legal Building Blocks for Your Venture The Bank of America Institute for Women’s Entrepreneurship at Cornell Personnel Contracts Contracts are in place and signed by all who work for/with my company. I am still finalizing contracts, or some people still need to sign. If you have signed personnel contracts in place… − Did the Personnel Contracts that Protect Your Venture chart uncover any potential legal vulnerabilities? If so, note questions for your lawyer or next steps you need to take. − Have you consulted with you lawyer to ensure your company’s agreements are legally sound and follow the laws within your jurisdiction, and that the agreements are appropriate for how you have classified your personnel? − If necessary, have you had people who started work before your personnel contracts were in place sign them? If you don’t have all signed personnel contracts in place… − What specific questions do you have for your lawyer about personnel contracts? − What challenges do you foresee in getting founders, employees, and independent contractors to sign these contracts? Do you anticipate pushback? If so, take some time to carefully plot out the conversations you will need to have. Consider how contracts work to protect relationships. − What’s the next big thing you need to do to get signed agreements in place for all founders and workers? 8 © 2018 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. PTRBOA005: Laying the Legal Building Blocks for Your Venture The Bank of America Institute for Women’s Entrepreneurship at Cornell Part 3—Assess Your Legal Vulnerability: Intellectual Property In Module 3, you identified your company’s IP and the extent to which that IP is appropriately protected. Now you will use your IP inventory, along with the other Module 3 resources, to reflect on your legal vulnerabilities related to IP. Then, you will take a broad view of the legal building blocks in place for your business, determine the area that requires the most urgent action, and make a plan to address it. Answer the following questions using as much space as you need. Note: Answer these questions in general terms. Do not share protected information in this document. 1. Are you working with a lawyer who specializes in IP? If not, how will you determine if you should seek specialized counsel? What questions can you ask your business lawyer? 2. In creating your IP inventory, did you uncover any vulnerabilities or risks? For example, have you identified IP that your company might not actually own? Have you spoken publicly about an unpatented invention or potential trade secret? Note any concerns or questions for your lawyer here. 3. For the IP in your inventory that is not yet protected, use the materials in this module to identify roadblocks or areas of concern. What challenges might there be to pursuing legal protection? What tough decisions might you have to make? 4. With your answers to the previous questions in mind, identify the next big thing you need to do to address an IP protection gap or vulnerability you uncovered. Your answer may include identifying questions to explore with your lawyer. 9 © 2018 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. PTRBOA005: Laying the Legal Building Blocks for Your Venture The Bank of America Institute for Women’s Entrepreneurship at Cornell Action Plan Throughout this course project, you have identified next steps in getting your building blocks for three key areas of legal protection in place. In column A, identify a building block that needs your attention from each part of this project. Use your answers about your “next big step” for each of these building blocks to populate column B. Then fill out columns C, D, and E to create a targeted action plan for how to address your business’s legal vulnerabilities. Part 1: Structure, Organization, and Finance A. What building B. What is the next block needs big thing you need attention? to do? Example: Experienced Startup Set up appointments Lawyer with potential lawyers C. How soon does it need to be done? D. What resources do you need to do it? E. How will you measure completion? Within the next 30 days Recommendations from contacts I will have an experienced lawyer I trust Part 2: Hiring and Compensation A. What building B. What is the next block needs big thing you need attention? to do? C. How soon does it need to be done? D. What resources do you need to do it? E. How will you measure completion? Part 3: Intellectual Property A. What building B. What is the next block needs big thing you need attention? to do? C. How soon does it need to be done? D. What resources do you need to do it? E. How will you measure completion? 10 © 2018 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners.
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