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The Right Side of the Law: Legal Issues All Startups Need to Know

How many lawyers does it take to advise a startup? Last Thursday at the most recent HaTCH startup event, it would not have mattered as there was no more space available for extra legal attendees. There was no more room for anyone, for that matter, once the capacity crowd had jammed into the cool new café at coworking space Workcentral.

Jokes aside (although the event was a total sell-out and our biggest to date) last night saw an incredibly informative discussion about legal challenges startups face and a crowd of about 80 founders and VCs joined us to network, listen to the panel’s expert advice and debate the finer points of startup-related law.

Paul Endacott, HaTCH Managing Director, hosted the event and moderated the panel that included Ramiro Rodriguez from our co-presenting sponsors Duane Morris & Selvam, a legal practice that has extensive experience and offerings in the startup space. The panel also featured James Bitanga, CLO of REAPRA, Charlotte Wilkinson, co-founder of Hello Sister and Hitan Mehta co-founder (Asia) of Acuutech. In a fairly boisterous atmosphere, the panel covered topics such as:

  • How to bootstrap some legal procedures

  • First steps to take with lawyers

  • Legal considerations of funding discussions

  • When to incorporate a business

Each brought a unique take on the topic.

Hitan, after pointing out that it was easier to start a company than open a bank account, talked about the difficulties in adapting company structure from one country to another; he also touched on the importance of insurance, even in a makeshift office, if you are not covered by a coworking space policies.

Charlotte talked about the importance of asking trusted advisors, seeking out mavens and friends who could advise you. Charlotte also spoke about the importance of getting rights for the artwork you use versus perhaps not trademarking your own brand, and she related how you need to prepare for the worst case, such as a client going bankrupt owing you money.

James dug deep into his background as a lawyer and his experience in seed funding with REAPRA to advise the audience to get agreements in place quickly for co-founders and not to rely on friendship and trust when it came to legal matters. He also talked about the myth of penetrating one Southeast Asian market, whereas the reality is far more diverse and complex, especially from a legal standpoint, and he took the audience through expectations of investors at different stages of funding.

Ramiro delivered some free legal advice and candidly discussed how agreements are generally in place to help the minority partner, so if you were expecting a VC to invest without a board seat, you could equally expect a lengthy shareholder agreement with many additional clauses to make up for the lack of a seat. He also advised that after several rounds of funding and multiple shareholder agreements, it was very likely that you would be in breach of some of the many clauses on a regular basis and that no one would be paying attention to it if the business was going well.

The panel took questions from the audience and then broke for more networking, beer, wine and finger food. Everyone seemed to agree that different legal challenges could be met with different solutions: friends and peers for advice, Dragon Law or Zegal for basic documents, a law firm with startup chops for term sheets and articles of incorporation.

To find out more about HaTCH services or to get invited to the next HaTCH event, email me

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