LegalEdge has partnered with Young Foodies to support their growing food and drinks community with YF Legal. Our aim is to provide practical and affordable legal support to their challenger brands so they can successfully navigate all their business milestones such as fundraising, protecting their IP and growing their teams. Here’s a write up by Young Foodies on our recent workshop with their start-up community…
We all know legal isn’t the most sexy part of the business. But usually, the least exciting things are the most important! Our view at Young Foodies is that you don’t need to overkill legal in your early stages but there are certain things that you cannot avoid – they’re absolutely critical.
That’s why we set out on a mission to find a law firm with a Young Foodies mindset – be human and don’t over-lawyer – acknowledge that working with start-ups is different from big businesses and budgets are a totally different quantum. We were incredibly excited to have landed on a partnership with LegalEdge… 3 months later YF Legal was born.
Last month we hosted an evening with Helen and Nick from YF Legal who shared their top tips and answered our brands biggest legal questions. We touched 4 key buckets throughout the evening and we have summarised the top tips below.
Did you know: When first starting, Innocent used a branding agency to create their brand. They went as far to get an IP transferral contract drawn up with the agency too but they got distracted before getting it signed. Because of this, many years later they temporarily lost the right to the halo in their logo and had to go through an incredibly expensive process to get it back.
- Do the work to set your trademarks up correctly from as early as possible. It costs money but it’s worth doing sooner rather than later.
- Make sure that you keep track of all the people you work with externally e.g. logo and website designers, photographers etc. Legally the content doesn’t belong to you unless you have contractually been assigned the IP.
- It’s important to question whether it’s commercially worth making it yours or whether you even care e.g. do you want to spend money protecting your first logo or is it something you think you’ll change later on down the line? How important is it to your brand?
Corporate (inc Fundraising)
Your corporate legals are your setup legals, articles, shareholders agreements and more.
- With new people coming into your business as investors, you should govern them with a contract of sorts, usually a shareholders agreement – and it’s best to do it sooner rather than later before any emotions come into play.
- If you can afford to, hold onto your shares for as long as possible. Only issue share options when you get to a stable enough size.
- There are so many ways that you can raise money but it’s important to get advice. The more you’re raising the more protection your investors want and the more legal focus you will need.
- Establish what you’re looking for in investors and think about what they are looking for in a deal. Ensure that you are on the same page. Don’t just see your investor as something financial, go after smart capital, someone who is investing in your business in the long run and able to add real value day-to-day.
- You can and should always ask for referees to understand a bit more about what they are like to work with as an investor, all in good faith.
Commercial (manufacturing, terms of supply, website terms etc)
As a general point with commercial law, everything should be seen as a risk analysis. Is it worth spending more money to get a contract checked over or is it a risk you’re willing to take? For us, the number one priority is the manufacturing agreement.
- Manufacturing is a much murkier territory with regards to protection so it’s so important that you get your manufacturing agreement right from the beginning. We deal with brands all the time who end up suffering heavily from misunderstandings or general issues with their manufacturers.
- When you go through a new contract with someone, you MUST understand the commercials. In plain English language, what are you signing up to with the manufacturer? Once you understand this then it would be the appropriate time to approach a lawyer. Doing it this way will save you time and money and will cut out the faff.
- Sometimes the manufacturer will provide you with a ‘standard’ agreement but it’s important to gain a thorough understanding of what you’re getting yourself into. More often than not, these ‘standard’ agreements are not standard at all. Contracts might need tweaking and you have to ensure that it is the right fit for you. If they don’t provide one then it’s important to get one in place.
- Don’t even think about this area until you have a team or are looking to grow. But, when you do, ensure that you have the basics and get your employer contracts right.
- Start brainstorming and understand the ‘what if’s’ and ensure that you cover off any issues e.g. what if an employee leaves your business and shares brand secrets?
- Also think about contractor and consultancy agreements.
If you take 3 things from this blog…
- Always brainstorm eventualities – ask yourself ‘What If…’ 100 times before embarking on any new relationship. That’ll give you a view of all the things to consider for your contracts. With each eventuality think to yourself ‘is this important to my business or am I ok with the risk?’
- It’s cheaper to get your house in order now than it is to have to fix it later.
- Write any contractual requirements in plain English and negotiate in plain English before briefing anything into a lawyer to keep legal costs down.
And a final tip: bear in mind that if anything is ever discussed on a phone call, at the very least follow up with a paper trail email so that you have it on record. This can act contractually.
Want to enjoy the benefits of bigger businesses? Young Foodies believe in start-ups – sharing knowledge, experience and access to solutions that make the every day easier for challenger brands. Check out their website here and get in touch if you want to know more.