A reader asks: My buddy and I are coding up a new site and we will be ready to launch the beta in about a month. We have a couple of angel investors who are interested, and we don’t want to screw anything up. What are the biggest mistakes that you’ve seen that guys like us make?
Answer: Here are six quick ones:
IP Ownership. Some entrepreneurs make the mistake of creating IP for their new venture while they are still working for someone else. They then quit and launch their startup, not realizing that the IP is actually owned by their prior employer. This is a tricky issue, and you should carefully review all employment-related agreements to determine if there are any provisions that may inhibit your new venture.
Choice of Entity. Choose your entity formation carefully. Investors generally only put their money in corporations – not LLC’s or partnerships. So it’s usually best to stick with a corporation when you’re getting started. Consult with an accountant as to whether you should make an S corporation election (and then convert to a C corporation down the road).
To read the full, original article click on this link: The six biggest legal mistakes startups make | VentureBeat
Author: Scott Edward Walker