Manatt’s Sarah Chambless, leader of the venture capital and emerging companies practice, spoke to Super Lawyers about the potential problems that startup founders could face if they consult legal documents online, rather than an attorney, for legal advice.
Chambless said that startup founders should do their homework and exploration before consulting a lawyer, which could include working out a business plan, compiling a deck or creating a prototype of their product.
“If you put a product out into the universe before a company is created, you’re not protected by the limited liability that companies provide to founders,” she said.
She also noted that it’s important for startup founders to balance their enthusiasm with a practical legal strategy.
“It’s really hard to see past the kumbaya stage of a business, where everyone is excited, everyone is in love with what they’re doing and willing to do anything to make success possible,” Chambless said. “So it’s very common for founders to delay having the really tough discussion of ‘What happens if our circumstances change?’ An attorney can navigate through all the potential exit strategies.”
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