Legal: Don’t Wing it

One of the first places new founders get tripped up is the legal stuff — not because they’re lazy, but because digging through all that paperwork feels like a distraction from the “real work.” But we’ve seen firsthand how getting this wrong early can kill a company before it even gets going.

Here’s the bottom line: you need a great startup lawyer. Not just someone who “knows a guy at Cooley” or “helped a buddy with a trademark.” 

You want a pro who’s helped hundreds of startups get formed, funded, and acquired. Think of it like hiring a great surgeon for a routine but critical procedure — you want experience, pattern recognition, and calm under pressure.

Even with AI tools improving, there’s no substitute for a lawyer who’s seen how these things play out 3–5 years down the road, in good markets and bad. You’ll save yourself time, money, and grief. Early on, the best lawyers will defer payment or take equity because they want to grow with you.

What Legal Topics Matter Most Early On?

Here’s the short list you need to understand well enough to be dangerous:

1. Incorporation

• Where? Delaware or Nevada.
• How? Set up a clean C-corp structure. Use standard startup docs; good example HERE.
• Why? Clean cap table, friendly to VCs, easy to raise money later.
• Bonus: Ask your lawyer about 83(b) elections. This one small form can save you millions in taxes.

2. Founder Equity & Vesting

• Just because you’re the founder doesn’t mean you shouldn’t have a vesting schedule.
• Four years with monthly vesting is standard. A 1 year cliff is common. 
• If you have a co-founder, getting these agreements right is even more critical.

3. Fundraising and Term Sheets

• Learn the key terms: valuation cap, discount, board structure, pro rata, liquidation preference, control terms.
• Understand what’s “market” and what’s a trap.
• Don’t just sign what your investor hands you. Read thoroughly and ask smart questions.

4. Your Employment Terms

• You need an offer letter and IP assignment agreement (even for yourself). These ensure that the IP you’re building actually belongs to the company, not to you personally or to some ex-employer.

5. Visas and Immigration

• If you or your co-founder is on a visa, raise this immediately with your lawyer.
• There are founder-friendly programs (like the International Entrepreneur Rule), but they require planning.
  

6. Equity Grants and Cap Table Hygiene

• Use a tool like Carta from day one.
• Be thoughtful about how much equity to give early hires, advisors, and service providers. Experienced investors can be a big help here. 
• Get signatures and keep records. Sloppiness here is expensive later.

Legal is Strategic

You don’t need to become a lawyer, but you do need to be fluent enough to ask good questions and avoid unforced errors. Find an expert and someone you have good chemistry with. If you’re not sure where to start, ask us. We’ve worked with dozens of great ones, and we’re happy to make an intro.