Entrepreneurs Should Think About the Law Early


This article discusses specific considerations that entrepreneurs should take into account when starting a new business, including what type of business entity to create, equity decisions, and labor law considerations. The article seems to advocate for hiring an attorney in these early stages, for an “ounce of prevention”.

I was most intrigued by the specific example of Snapchat. The recent IPO documents show us that Snapchat¬†“agreed to pay [an]¬†individual a total of $157.5 million.” (IPO document at page F-28). Further research reveals that this individual was actually one of the original co-founders of Snapchat, one who allegedly came up with the idea for the disappearing images. He then sued for a large sum of money, as he claimed that Snapchat was infringing upon his IP. Because Snapchat apparently did not plan for this type of lawsuit, it ended up settling for such a large sum.

Examples such as these can help entrepreneurs learn the value of taking some proactive legal steps at the beginning of their startup, rather than having to untangle a mess after the fact.

One thought on “Entrepreneurs Should Think About the Law Early

  1. This article presents good points. Legalities surrounding entrepreneurship can kill a business if something goes wrong.