The Startup Law 101 Series is aimed at educating founders and entrepreneurs about the basics of startup law. The question is – what should every entrepreneur know about the law.
Here are my suggestions on this important question.
- Law is fundamentally a specialty field and entrepreneurs should leave it, for the most part, to the specialists when it comes to technical details.
This part can’t be emphasized enough. Law is a maze of complexities. If you, as an entrepreneur, try to master it at that level, you will be an unusual entrepreneur if you are not quickly discouraged into abandoning the effort altogether.
- Entrepreneurs can feel trapped, though, by specialists who hem them in and sometimes abuse them. Lawyers have been known to attempt to capitalize on the “fear, uncertainty, and doubt” (FUD) factor that can be used to scare up business where none legitimately exists. So it unsafe to leave everything to the specialists without being informed about their proper role and being proactive in managing their activities as your hired agents.
- Entrepreneurs should attempt to gain a working knowledge of the law as it affects their companies. The emphasis here is on “working.” This is not a technical knowledge. This is not about going to law school or about learning to think like a lawyer. It is about trying to get the equivalent know-how about law that a serial entrepreneur might have – it is about knowing the decision points and the main factors that affect those decisions so that you can manage a lawyer’s efforts in giving you technical assistance on those points.
- Therefore, even though law is boring for most entrepreneurs, the smart ones attempt to educate themselves in this area as needed to achieve the goal of being effectively proactive in working with lawyers.
- What does this investment of time and effort get you? It will allow you to know how to protect yourself in legal areas. It will improve your ability to plan effectively for your company’s launch and growth. Finally, it will save you money because it will improve your ability to manage the time of your lawyers.
- How do you gain this knowledge? That is up to you. The point is to emphasize that you should not disdain the task just because it involves law. And you should not overdo it be diving into specialty forms of knowledge. Strike a balance. When it comes to startups, use the Startup Law 101 Series to learn about fundamentals. Go to the excellent Startup Company Lawyer and Startup Lawyer blogs. Read the posts. Think about the issues.
You can also use self-help resources from the publishers who specialize in such works. Sometimes these are less helpful for startup issues than they are for other small business issues.
In the end, experience will be your best teacher. But you will need to give yourself a foundational knowledge to ensure that learn the most from your experiences. And, above all, make sure to work with a business lawyer who works with you and educates you about the legal steps you are taking. Do watch out for lawyers who keep you in the dark and spread the FUD factor.
Remember, don’t be discouraged if you cannot understand legal technicalities. Your goal is not to master the technicalities. It is to get a working knowledge. Place a high value on anything that gives you that perspective. This is what the serial entrepreneur has mastered. It is what you will need to master as well.