SaaS Startup Lawyer Andrew S Bosin LLC based in New Jersey represents software and cloud startups, company founders, entrepreneurs, vendors, customers, resellers, developers and enterprise companies in all fifty states. Andrew’s office is just outside of New York City.
One of the many strengths that Andrew brings to the table in representing early stage SaaS companies is that he is also a SaaS entrepreneur. Andrew understands from his own entrepreneurial experiences in building a SaaS company with partners what you are going through in trying to get your company off the ground.
Andrew drafts and negotiates SaaS contracts, SaaS end user license agreements (EULA), Subscription Agreements, Master Service Agreements, Reseller Agreements, Partnership Agreements, Service Level Agreements (SLAs) and website legal agreements.
Andrew provides legal advice to SaaS companies in verticals such as
healthcare technology, real estate, healthcare software, customer management systems, employee talent, Human Resources (HR), Pre-Employment Assessment, restaurants, big data analytics platform applications solutions vendors & ecosystems, B2B, B2C, CRM, Point of Sale and SaaS based Customer help desk tools and marketing, HESaaS Hardware Enabled Software as a Service SaaS Companies, Recruitment, Talent Management, Employee Benefits, hotel, travel, and leisure, data analytics, business analytics, machine learning, value added services, Platform as a Service (PaaS), Infrastructure as a Service (IaaS), business intelligence solutions, Data as a Service (DaaS), machine-learning algorithms, analytics as a service, big data solution providers, data security & protection and helping Internet of Things (IoT) technology providers and drafting
intellectual property (IP) licensing agreements.
Your SaaS Product Must Solve For a Problem
If you speak to successful entrepreneurs they will tell you that they formulate an exit strategy even before they launch their product in the marketplace. How do they do this? They do it by creating a product that solves for a problem that no other product has figured out to do. They make something that people want to use or it improves productivity in the workplace.
Don’t assume that just because you built something great and everyone you know loves it that it will translate into sales. It doesn’t work that way. There is a really good chance that when you pitch your product to potential customers that the feedback will be positive but if the product does not make their workplace better or more efficient or solve for their customers’ problems you are not going to make a lot of sales.
Andrew encourages founders to talk about what their goals and expectations are in forming a startup. Some co-founders want to scale a business, make a lot of money and sell the company. Some are in it for the long haul.
Andrew has had hundreds of discussions with clients surrounding the issue of dividing up shares of founder equity; no two conversations are alike. There is really no easy way to answer the question about how much equity each co-founder should get. There is a school of thought that if you want to make a startup attractive to serious investors the company’s founders should not receive a ton of stock at the inception of the company perhaps just enough so collectively the founders own a majority of the issued stock (e.g., 51%).
Clearly, there is no right way to divide or distribute startup equity. Andrew believes that VC’s are attracted to startups with multiple founders with equal equity splits.
The big question Andrew gets asked all the time by New Jersey startups is how to attract investors and raise capital. There is no magic formula or recipe for success that Andrew can give to you that will get investors interested in your company.
Here are some things to think about before starting a capital raise:
- Get Your Corporate Legal Structure in Order
There is no faster way to annoy investors than if you have not incorporated or done all of the corporate legal work to get your business house in order. This means if you are an LLC you should have an operating agreement drafted. If you incorporate as a Delaware C Corporation this means you should have bylaws drafted and founders’ stock agreements put in place. No matter what type of corporate entity you are you should have all of the founders sign IP invention and assignment agreements. No serious investor is going to want to invest in a startup if there is a possibility that a co-founder could quit and walk out of the door with all of the intellectual property.
2. Don’t Issue All of Your Company’s Stock To The Founders After You Incorporate
You also need to think very carefully amount of the stock that is issued to the founders in the first round and when it vests. If you issue all of the stock to the co-founders at the beginning you are going to have a tough time attracting serious investment monies. A shrewd investor will view the co-founders as immature and having no business sense if they take all of the stock for themselves.
3. Make Sure All of The Co-Founders’ Stock Vests Over Time
Another stock related issue to think about is vesting. No serious investor is going to give your startup a second look if all of the stock issued to the founders vests immediately. The reason being is that an investor does not want to see a situation where he or she invests in a startup and shortly thereafter one or two founders leave with all of their stock. No, an investor wants to see that the founders have skin in the game and if they quit before all of their stock vests they will leave their remaining unvested stock behind which should go back to the company.
4. You Need To Create Financial Books and Records To Track Costs, Expenses and Revenues
Another area that you need to familiarize yourself with and there is plenty to read online is the need to create financial books and records. You need to create digital spreadsheets to track present costs and expenses and project future costs, expenses and capital expenditures and revenues at a minimum a year out. No serious investor is going to give you money if you don’t have both control of and a fundamental understanding of your costs and expenses and how, when and what type of revenues you project to earn over the next one to two years.
5. You Need To Develop a Go-To Market Strategy
This assumes you have built your product and its ready to go to marketplace or you are one to two months away from marketing it to the public. If you are sitting in a meeting with an investor who knows your industry you can be sure he or she will ask you these questions: How does your product add value in the marketplace? What makes your product better than your competitors? What is your go-to market strategy for selling your product? Before answering these questions you need to do some serious homework.
New Jersey Technology Business Startup Attorney Andrew S Bosin LLC offers low cost, affordable and smart legal advice to Technology, Software, Mobile App, SaaS, Cloud Computing, Internet, Blockchain and E-Commerce Online startups, entrepreneurs, vendors, developers and founders. Andrew represents businesses in various stages of growth, from seed stage entrepreneurs just getting started to companies securing enterprise software and technology deals.
Andrew charges well priced, low cost, fixed rate legal fees.
Please contact Andrew for a free legal consultation at 201-446-9643.