• Terms and Conditions
  • Privacy Policy
  • DMCA
  • Disclaimer
  • Cookie Privacy Policy
  • Contact Us
Sixsense News
Advertisement
  • Home
  • Business
  • Economy
  • Fintech
  • Finance
  • Insurance
  • Market
  • Startups
No Result
View All Result
  • Home
  • Business
  • Economy
  • Fintech
  • Finance
  • Insurance
  • Market
  • Startups
No Result
View All Result
Sixsense News
No Result
View All Result
Home Startups

Why your startup needs a prenup • TechCrunch

Ram Iyer by Ram Iyer
October 7, 2022
in Startups
0

Related articles

Pixel Pals delivers a cute and clever update that takes advantage of new iOS features

September 22, 2023

Google’s Parisa Tabriz on how the company stays ahead of hackers

September 22, 2023


Yonaton Aronoff
Contributor

The early months of a startup are like the beginning of a new romantic relationship: full of promise and excitement, with everyone entranced in a blissful state of possibility. In these days of wine and roses, it is natural to want to focus on the positive. Imagining, much less planning for, worst-case scenarios, may be viewed as antithetical to launching a new partnership.

Unfortunately, as too many co-founders and spouses come to realize, the best time to plan for negative outcomes is at the beginning of the relationship. Waiting until conflict develops can be devastating, and too often leads to intractable litigation with no clear winner.

As hard and awkward as it is, it is critical for co-founders to plan for the possibility of future turbulence. At a minimum, startup co-founders should:

  • Force tough conversations at the startup stage, and acknowledge the possibility — however remote — that disputes may arise in the future.
  • Engage counsel to assist with drafting formation documents that clearly delineate the rights and obligations of all co-founders, including their respective ownership shares and scope of operational control.
  • Agree in advance on procedures for avoiding and resolving deadlocks, as well as a process for removing founders or facilitating their peaceful exits.

Don’t put off difficult conversations

Trying to rely on collateral promises, conversations, emails and understandings is a recipe for years of litigation.

There is an endless amount of work to do at the startup stage, and without any revenue coming in, co-founders understandably take on many tasks, working tirelessly (and often without any compensation) to launch their new venture. Carving out extra time to talk about the potential for future discord is the last thing anyone wants to do.

Furthermore, co-founders are often brimming with positivity during the startup phase, and war-gaming for negative outcomes can be viewed as a “vibe killer,” and counterproductive to a successful launch. Pushing hard conversations to another day, when money and time are more plentiful, is always easier.

While it might feel like the worst time to discuss worst-case scenarios, the startup phase is always the best time to confront and plan for negative outcomes. This is true for several reasons.

First, by and large, co-founders during the startup period are on a relatively equal footing. Each co-founder usually contributes (and risks) something, whether it be capital, connections, labor or something else, and no one is (yet) in a position to take credit or assign blame for the business’s ultimate success or failure. Nobody knows what will happen or why, and everyone is at relatively equal risk of failure.

In other words, because it is ex ante, the startup stage is in many ways the easiest and fairest time to plan equitably for the future.

Tags: prenupstartupTechCrunch

Related Posts

Pixel Pals delivers a cute and clever update that takes advantage of new iOS features

by Sarah Perez
September 22, 2023
0

Developer Christian Selig has launched an updated version of his playful Pixel Pals app that takes clever advantage of new...

Google’s Parisa Tabriz on how the company stays ahead of hackers

by Carly Page
September 22, 2023
0

Google is constantly under attack. But while hackers have compromised gaming giants, casinos, and other technology giants in recent months,...

Protect Your Online Privacy with Norton’s Secure Browser

by Alex
September 22, 2023
0

In a bid to protect consumers from browser-based security, privacy, and identity threats, Cyber Safety experts Norton, a subsidiary of...

Ensuring Legal Compliance and Managing Risk in the Workplace

by Megan Isola
September 22, 2023
0

Every business is responsible for the health and safety of its employees. Whether you’re an e-commerce company with a warehouse...

Tech Sector’s Explosive Evolution – KillerStartups.com

by Guest Author
September 22, 2023
0

Technology has fundamentally altered human society, transforming businesses and daily life and pushing technology stocks to the forefront of investment...

Load More

Dutch Authorities Say Tata Factory Emissions Lower Life Expectancy

September 22, 2023

*HOT* Rockland Fashion Softside Upright Luggage Sets only $25.99 (Reg. $80!)

September 22, 2023

JP Morgan’s inclusion of Indian bonds to boost rupee amid rising oil prices By Investing.com

September 22, 2023

The Payments Association Sets Out Government Recommendations For New Financially at Risk Groups

September 22, 2023

Delta Corp asked to pay Rs 11,139 crore for payment of shortfall tax under GST

September 22, 2023

5 Options If You’re Crushed by Student Loan and Credit Card Debt

September 22, 2023
Sixsense News

© 2022 Sixsense News All Rights Reserved.

Navigate Site

  • Terms and Conditions
  • Privacy Policy
  • DMCA
  • Disclaimer
  • Cookie Privacy Policy
  • Contact Us

Follow Us

No Result
View All Result
  • #3158 (no title)
  • Business
  • Economy
  • Finance
  • Fintech
  • Insurance
  • Market
  • Startups

© 2022 Sixsense News All Rights Reserved.