Startup Legal Hacks

Dan Rubins

Founder & CEO, Legal Robot

The Founder Institute

About Me

• Founder & CEO of Legal Robot, NOT A LAWYER

• Enterprise software @ McKesson & Wells Fargo

• BS in Molecular Biology

• Started first co. @ 16, and several since

• Why legal? It’s broken & AI/ML can help

Disclaimer:

This is not legal advice. I’m not your lawyer.

My Legal Principles

• Anything worth doing will probably piss

off someone, somewhere.

• Don’t try to make enemies.

• Act like a human, but remember

that no one is your friend.

• Start by asking nicely,

then go to war.

The Basics

• Some legal stuff must be perfect, is un-fixable

• Lots of stuff can be fixed, if people agree

• Fixing things costs $, burns $ you don’t have

• Not everything needs a lawyer - can do a lot

by yourself, more with tools

• Obvious: Incorporation, IP, Funding

• People forget: Regulation, Permits, IP, Accounting

The Obvious Stuff

Quickly…

Incorporation & Funding

• Most US startups incorporate as a Delaware C-corp

• Get Help: Clerky, Legal Zoom, Rocket Lawyer, …

• Don’t forget about other founding docs

• Expensive when this gets screwed up

• Funding is complex; get help

– Look for experience & independence

– Beware of conflicts of interest, rudeness

Recommended: Venture Deals by Brad Feld

Trademarks

• Name, slogan, logo = valuable? Look into trademark

• Process can be simple:

– Check for conflicts. If not, prove that you’re using it.

– If so... lawyers.

Notes

• Trademarks cover one country. US != UK != CN …

• Exact keyword searches are not enough

• Tools: Trademarkia, TrademarkNow, LZ, RL

Patents

Patents are evil

• The patent system is broken

• Expensive to defend

• Patents are abused

• IP gets fragmented

• “Patents are where $200B/yr

of economic output

goes to die”

Patents are necessary

• All the cool people are doing it

• Form of signaling (expensive)

• Prevent others from working on

your invention*

• Others can’t prevent you from

working on your invention*

OR

What to do1. Be careful2. Get professional help3. File ASAP – NOT A WORD until then

No

No

Everything Else

Things people forget

• Just because you can, doesn’t mean you should (DIY)

• Take security seriously: 2FA, encrypt everything, PCI

• Accounting is not something you do 1x year in April

• Regulatory agencies at all levels of government

• Employee Compliance & Quarterly Filings

• Insurance: Workers Comp, GL, E&O, D&O

• You always need a permit for something

• IP needs to be nurtured & defended

• Privacy policies are required by law

When you need help

• DIY Law – Google, Nolo, Trademarkia, Gov’t sites

• Assisted DIY Law – Legal Zoom, Rocket Lawyer

• Legal Referral – LZ, RL, Avvo, UpCounsel, + more

• Boutique/Specialty Firms

• Big Law

+ LOTS of new niche tools for law

Related: Zenefits, Gusto, Xero, eShares

More

Expensiv

e

How I avoid legal trouble

• Documents: MS Word, Cloud Storage w/ 2FA, Audit Trail, Access Log

• Incorporation: Clerky / InCorp

• TM: Trademarkia (search), USPTO (US filing), lawyer (Int’l)

• Money: Xero (accounting), Stripe (processing)

• Payroll & Emp. Compliance: Gusto (fmr. Zen Payroll)

• Cap table, stock plan, 409A, reporting: eShares

• Mail: Earth Class Mail

• Privacy & Terms Generator: TermsFeed

• Security: HackerOne (bug bounty), Qualys (Scan)

• Lawyer: 1) My network 2) UpCounsel 3) RocketLawyer

a.k.a. Dan’s “Legal Stack”

This, and more, will be posted onStartupLegalHacks.com

(as soon as I get around to it)

Dan@LegalRobot.com

@DanRubins