On 24 March 2022, Launch Pad kicked off the first Expert Speaker Series on the topic of ‘Legal Basics for Launching Your Startup’, featuring Frank Law‘s tech and startup lawyer Roshan Sidhu.
With experience working with clients from different fields, such as fintech, medtech, and manufacturing, and in helping with their day-to-day problems, Roshan was excited to share with local startups on the topic of company structuring, employment best practices, and most importantly for a lot of startups, how exactly to track investment, how to prepare for it, deal with it, and eventually how to scale from there.
Roshan went through typical business structures and the risks associated with each type. “It’s a question of balance between risk, costs, complexity and flexibility.”
“First thing you need to understand is that your structure matters from an investment attraction point of view,” he continued. “Your investor wants to understand even if you don’t have it set up, you’ve thought about it, you have a plan for it and you’ve turned your mind to what the end goal is.”
Roshan brought up an interesting point about how most startups he’s worked with are very aware of the technical risks (product-market fit etc), but sometimes might overlook “people problems”.
Regarding Australia’s complex employment framework, he stressed on the importance of understanding what your obligations are, investing in having good staffing practices, and knowing how to actually onboard staff. “Because once you start onboarding staff, it’s not just you”.
About contracts and negotiation, especially for startups, the speaker advised that they “understand their bargaining position, and what leverage they have in negotiations”, as he shared about how Frank Law has a “very busy litigation team that exists primarily for people not understanding contracts”. Startups should seek to understand what they are signing, determining what each party is responsible for, how to retain IP and protect confidential information, and what to do if something goes wrong.
Investment readiness, an important part of any startup’s journey, was described by Roshan as “more of a holistic on-going process rather than a one-off event.” “It’s almost a mentality that you put yourself into”.
“At the end of the day as a founder, your duty when it comes to getting investment ready, is you want to give a potential investor as many reasons as possible to say yes and as few reasons as possible to say no; and a lot of them pass on an investment simply because it’s too much work,” he explained. “They might like your idea, but if it’s going to take them six months to clean up your organisation just to make it functional, they’re gonna pass the money to someone else.”
It was an interesting session as Roshan addressed all the FAQs on the legal considerations to set-up and manage early stage businesses. Towards the end of the session, the speaker reminded startups that “you don’t have to do this alone”.
“The thing that I love most about the startup space is everyone is generally pulling in the same direction. Sure, you might have a peer in your space – that’s technically a competitor, but you know that doesn’t mean you never talk to them. The connections that you can get are incredibly valuable: you don’t know who can introduce you to a potential investor, potential CTO co-founder and the like”.