Dominic is the CEO of Lawpath, dedicating his days to making legal easier, faster and more accessible to businesses. Dominic is a recognised thought-leader in Australian legal disruption, and was recognised as a winner of the Australian Legal Innovation Index and recently a winner of the LexisNexis 40 Under 40 (APAC).
As a start-up, you may not always do things by the book, often opting for the “it won’t hurt me I’m just starting out” mentality. Whilst this can be a good thing for fuelling creativity and taking risk, it can so often come back to hurt you later down the track.
Here are the 5 of the most crucial mistakes made by early-stage business and tips on how to avoid them:
1. Failing to protect IP: Australia operates under a first-to-file system. As a result, it is vital that you Trademark your name and logo early. When you foresee potential trademarks, make sure to protect all discussions and efforts with NDA’s (Non-Disclosure Agreements) and Confidentiality Agreements.
2. Neglecting advice on financing term sheets: Investors employ a number of approaches to protect governance, liquidation privileges and preferences in financing structure. Business owners generally enter the negotiations without the intricacies each investor will take advantage of. Seeking appropriate legal advice to take you through these terms is a necessity, as a lawyer will be able to explain to you what can and can’t be pushed back on. You also need to be mindful of how dilution will occur in the event of a venture-funded deal at a later date.
3. No clear business focus: Develop an initial business focus that you can articulate naturally. You and your team should be aligned in answering what you do, who you do it for and what your unique advantage is.
4. Forgetting the Customer: Who are your customers; what are your channels of distribution; what’s your cost of acquisition; who are your competitors and exactly how are you superior to them?
5. Money Problems: Raising the correct amount is vital to ensure that you don’t hinder your future raising potential. You also don’t want to run out of money at the wrong moment, so be thrifty!
Is your business guilty of making these mistakes? Visit our document store to discover simple, cost-effective ways to protect your business.
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