Earmarking a legal expert for your startup is one big tick on a founder’s to-do list. It’s a task not to be taken lightly – after all, the lawyer you onboard can be your beacon through the labyrinth of startup setup, team creation, equity incentive planning, and the initial investment journey.

Opting for someone unfamiliar with a startup’s unique legal ecosystem could leave you in a costly quandary, like choosing an incompatible business entity or locale. Missteps like these could set your wallet back by a few grand.

Let’s join hands to dodge such financial blunders!

Startup – What’s in a Name?

Every sprouting business doesn’t necessarily fall under the ‘startup’ umbrella. Typically, we use “startups” to talk about (mostly tech-oriented) enterprises with scalable, repeatable business models, designed to leverage external investments (OPM – Other People’s Money) to boost the firm’s value over time, eyeing an ultimate exit – getting acquired or going public. 

In the words of Steve Blank, author of The Startup Owner’s Manual, a scalable startup is intentionally crafted from day one to expand into a large enterprise. The founders harbor a game-changing idea, one that could surge to $100 million or more in yearly revenue by disrupting existing markets or creating new ones.

Discerning these subtle differences paves the way to the right legal aid.

Legal Savvy for Your Start-Up: What to Ask?

Does their experience include startups?

Startup expertise doesn’t just come from serving small businesses; not all enterprises are created equal. A traditional brick-and-mortar retail store or an online coaching platform varies enormously from a tech startup in its legal requirements. 

What you need is a lawyer who’s been in the trenches with startups like yours: scalable tech companies gunning to attract angel and VC investments and work towards an exit. 

Our CEO at NewWave Law, Mary, has served an array of small businesses before zooming in on tech startups, particularly women-founded ones. She’s acutely aware of a startup’s distinctive needs compared to other small businesses. 

Having a lawyer who grasps these particularities is invaluable. Otherwise, you risk re-hiring a lawyer to correct mistakes – and clean-up costs usually dwarf the initial outlay.

Which Services Do They Offer?

Look into their service spectrum and how many of your legal requirements they can manage. Not all firms provide an all-inclusive offering unless they are expansive (and often expensive) with various specialty departments. 

Most smaller firms master specific niches rather than being jacks of all trades. At NewWave Law, we have curated a suite of services exclusively for startups (incorporations, equity matters, advisor agreements, and early-stage funding). Despite our specialized offerings, clients might still require other legal professionals to address additional legal areas like trademarks, customer or supplier contracts, employment law, NDAs, etc.

We specialize in matters unique to startups that call for industry familiarity. When it comes to company set-up, stock plan creation, equity issuance, or fundraising support, we’ve got your back. For all other legal needs, we provide referrals. So, don’t sweat it.

What’s their work style?

Understanding your potential lawyer’s work style can illuminate whether you’ll make a good team.

Ask about their preferred mode and time of communication, their response time, project turnaround time, and advance notice needed to kick-start a project. It’s crucial to perceive your lawyers as partners, not just external service providers. Aligning work styles and fostering personal chemistry is key.

You should be comfortable raising any issues or concerns, building a robust relationship along the way.

How do they structure their pricing?

As most startups are bootstrapped initially, founders are often budget-conscious. The traditional hourly billing model can be a strain on startups, especially when legal needs are unpredictable or sporadic. 

Nowadays, many law firms are veering towards alternative pricing structures like flat fees, monthly subscription packages, or hybrid models. Even if a firm still charges by the hour, make sure they provide project estimates upfront. All fee-related discussions should be transparent and upfront to circumvent future disagreements.  

Do they have a broad network?

A well-networked lawyer or firm can be a boon for your startup, possibly connecting you to potential investors, accelerator programs, employees, and other stakeholders. 

Choosing a lawyer means entrusting a significant part of your startup to them. So, ensure you’re entirely comfortable and confident in their abilities. 

NewWave Law could be the perfect legal partner for your venture. We aim to assist women founders in setting up and scaling their investment-ready tech startups to spearhead the new wave of change-makers and bridge the gender investment gap!