from Entrepreneurship Education.com 7/10 enhanced by Peter/CXO Wiz4.biz
What is your Legal Basis? Whether you’ve got an idea or an already established business, whether On or off-line, and now you’re seeking the rocket boost of venture funding to take you to the next level. But wait !!! Before you start your search for money, it would be wise to first take a look at the legal basis of your business. If you do not own what you are purporting to sell, it stands to reason that you are not likely to get funded. Getting all your legal “pins in a row”, so you can do a “strike”, will have the effect of giving you a more professional image to the potential “funder” and this can have significant benefits, not the least of which is that it may help set you apart from the many other businesses and $$ seekers out there. Any advantage you can establish can work in your favor will help you. You want to look like you “got it together” and are accurate. There is nothing that can turn off “funders” more, than an un-professional presentation.
So these are some of the legal & business issues that you should deal with now, before you approach Funders. As with any information of a legal nature, this information is designed merely to raise some of the various Starting Issues that are important, and which you are likely to face starting your business or in seeking funding. When you get real serious, seek Legal advice.
INTELLECTUAL PROPERTY RIGHTS. Whether you are an online or offline business, if part of your asset mix includes any form of Intellectual Property, do you own rights to it? Intellectual property can be books and/or magazines and other media, if you are a publisher, songs & recordings if you are in the music industry, hardware, SW, firmware in any tech field, among other forms of intellectual property. If you are not the “sole creator” of your intellectual property, if you have had any of it created by non-bona fide employees such as authors, songwriters, web designers or developers, you may be surprised to discover that you may not actually own the intellectual property in these assets or that your rights to the same are either clouded or restricted.
Is it Documented? Without the appropriate, thorough, written & valid legal documents, you may find that your abilities to exploit the intellectual property may be adversely impacted. If these assets are the primary form of value that you have for your business, there may be little to sell.
Under U.S. copyright law, unless the creator was a bona fide employee of yours and created a copyrightable work during the course & scope of employment, that “creator” owns all rights to his or her creation unless there is a valid, signed agreement transferring exclusive rights to you. Non-exclusive rights are not only worth-less but may in truth be worthless. Thus you must do an assessment of your intellectual property assets to make a determination as to the status of your rights. Do you own registered copyrights and trademarks, especially trademarks to the products and services that form the core of your business?
(Other forms of Intellectual Property + other Contract, Corp & Financial Issues in Premium Content)