girls in tech talk (xavier & associates llc) - a legal survival guide to the first 6 months

Girls in TechXavier & Associates LLC

The First 6 Months - A Legal Survival Guide For Your

Business

XAVIER & ASSOCIATES LLC

• IP, Tech, Commercial and Corporate Law

• Big firm background, boutique firm service

• Over 36 years of collective experience

• Silos vs Collaboration

• Legal Strategy vs Legal Documents

• Affordable, 100% Fixed Fees.

OVERVIEW- WHERE ARE WE GOING TODAY?

• The Basics of a Legal Infrastructure

• Relationships

Founders/Shareholders

Employees

Service Providers

Customers

• Conclusion

BASICS OF A LEGALINFRASTRUCTURE

LEGAL INFRASTRUCTURE – WHY?

Name a time in history when laws were not required…

LEGAL INFRASTRUCTURE – WHY?

As I was saying, it’s

about time we had traffic

laws!

Game Time: “I Still Haven’t Found

What I’m Looking For”

Expectations are harder to figure out when

they’re not in black and white

Foundation Regulate relationships Protect the business

Enforce rights and dutiesResolve conflictsClarify expectations

SETTING UP A LEGAL INFRASTRUCTURE

An ounce of prevention, is worth a pound of cure

WHY THE FIRST SIX MONTHS?

LITIGATION

CONTRACT

A HEALTHY LEGAL INFRASTRUCTURE

Company

Founders/Shareholder

s

EmployeesService

Providers/Contractors

Customers

FOUNDERS/SHAREHOLDERS- LEGAL ISSUES

65% of startups fail because of “people problems”

- Noam Wasserman, “The Founder’s Dilemmas”

FOUNDERS/SHAREHOLDERS– LEGAL ISSUES

• Snapchat: The Case of “The Brogrammers”

Snapchat

US$10 BillionFrankBrown

Evan Spiegel

BobbyMurphy

FOUNDERS/SHAREHOLDERS– CASE STUDY

• Whose idea was it?• Whose IP?• Whose capital?• Time• Opportunity cost?• Part-time or full-

time?• Executive role in

company

• Industry expertise?• Future employees?• Group dynamics• What ifs?• Non-competition

restrictions• Shareholders who

leave

FOUNDERS/SHAREHOLDERS– CONSIDERATIONS

EMPLOYEES- LEGAL ISSUES

EMPLOYEES – LEGAL ISSUES

Employment Agreement:• Confidentiality obligations• Ownership of IP

(background and foreground)

• Non-competition• IT policy• Communications policy • Termination

EMPLOYEES – LEGAL ISSUES

The best employment agreements reference an Employee Handbook• Not a luxury, but a useful means to manage

employees• Incorporate incentives• Implement rehabilitation or corrective

measures• Establish formal procedures for dealing

with wrongdoing

SERVICE PROVIDERS- LEGAL ISSUES

• Facebook: The Case of “The Pinky Swear”

MarkZuckerberg

ConnectU

WinklevossTwins

FacebookUS$230B

Verbal agreement

“The Coder”“We have an idea”

SERVICE PROVIDERS – CASE STUDY

SERVICE PROVIDERS – CASE STUDY

• The Case of “Just Do It”

App Developer

Future US$M/B Start-up

• “Reputable” local developer• Service Provider’s terms• Brief on details• Milestones• Testing and acceptance• Paid fully Launch delayed, extra costs

• Confidentiality

• IP ownership – Background and Foreground

• Non-competition

• Customer Data

• Deliverables, Milestones, Testing and

Acceptance, Termination & Cure.

SERVICE PROVIDERS – LEGAL ISSUES

CUSTOMERS- LEGAL ISSUES

• Terms of Use(aka user agreement, terms of service,

licence agreement, EULA, etc.)• Privacy Policy• Identity of user• “Click-wrap” vs “Browse-wrap”

CUSTOMERS – LEGAL ISSUES

• Click-wrap: website user is required to take some form of positive action to express assent to the terms and conditions;

• Browse-wrap: terms and conditions accessible via a hyperlink appearing on website, with no requirement that a website user take any affirmative action to indicate assent to the terms and conditions.

CUSTOMERS – CLICK-WRAP VS BROWSE WRAP

CLICK-WRAP VS BROWSE WRAP – CASE STUDY

• The Case of “Close, But No Cigar”

ANGRYUSERS

• 24 million users• Customer data hacked• Multiple lawsuits filed• Tried to rely on arbitration clause in terms of use

CUSTOMERS – CLICK-WRAP VS BROWSE WRAP

“… the advent of the Internet has not changed the basic requirements of a contract, and there is no

agreement where there is no acceptance... A party cannot assent to terms of which it has no knowledge

or constructive notice, and a highly inconspicuous hyperlink buried among a sea of links does not

provide such notice. Because Plaintiffs did not assent to the terms, no contract exists, and they cannot be

compelled to arbitrate.”

CUSTOMERS/USERS – CASE STUDY

Use Click-Wrap Agreements

I Agree

CONCLUSION

• Budget for legal advice/documentation

• Seek legal counsel early and at every stage of

growth

• Lawyers are best deployed as minesweepers,

not salvage crew.

CONCLUSION

THIS IS BUSINESS NOT A SCIENCE PROJECT

Thanks to:

CONTACT US

Xavier & Associates LLC

11 Collyer Quay, The Arcade, #17-00

Singapore 049317

Tel: 6521 4550

Email: wanli.seow@xavierlegal.com

www.xavierlegal.com