This is the second part of the series. Read part one here.
Partnership contracts
Not every entrepreneur is a lone figure shouldering the burden of running a business alone. Many startups have a team of two or more co-founders working together to get their joint venture off the ground. For those who go into business with partners, it’s important to protect the future of their company by planning for a potential co-founder split.
It’s best to get any co-founder or partnership agreements sorted in the early days of your business. While everything may be going well and everyone getting along in your honeymoon phase, you have to prepare for the possibility that one or more of you may leave in the future. Every business partnership needs to have a co-founder agreement in writing that clearly lays out what happens with things like ownership and equity in the case of a parting of the ways. Too many businesses are derailed when an ownership dispute between co-founders drags down the entire company.
Intellectual property and non-disclosure agreements
Eventually your hard work will pay off and you will find yourself at the point where you will be pitching your business to investors or other audiences. Understandably, you’ll want to tell the entire world about the wonderful company that you’ve built. However, it’s best to exercise a bit of discretion when you find yourself talking about your business in public.
Revealing too much detail about your product or invention could be considered a public disclosure, which can create a problem if you haven’t already filed for intellectual property protection but want to do so later. Offering too much information can also put you at risk of outright theft and potential copycats.
One way to mitigate the risks associated with presenting your ideas in public is to make those you’re presenting or speaking sign a non-disclosure agreement. If you’re presenting at a trade show or other large audience and a NDA isn’t a realistic option, you should speak about your products, ideas and processes only in generalities and avoid providing enough details that someone would be able to copy what you do.
Having trust in those you work with or those you hope to partner with can be a positive quality. But trust can only go so far, and at a certain point you also have to take realistic steps to protect yourself and your business. Having written agreements in place with both employees/contractors and co-founders as well as avoiding public disclosures with non-disclosure agreements are important measures in ensuring the future of your company.
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