How to Pick the Right Attorney for Your Startup

Picking the right attorney for your startup is crucial. You need someone who understands your business model, market opportunity, fundraising, and exit strategy. A bad fit can lead to costly mistakes.

Let me share our experience. In our first tech startup, we made the mistake of choosing a business attorney who had no experience with tech startups. This resulted in a terrible deal with an angel investor.

We had invested $70,000 of our own money and were looking to raise $3 million. Our attorney helped us draft an Operating Agreement that seemed comprehensive. However, it included a non-dilution clause that prevented future fundraising.

Later, when we had a chance to raise more funds, an interested investor requested a copy of our operating agreement. They refused to invest unless the non-dilution clause was removed. We had to hire another attorney, which cost time and money. By the time the clause was removed, it was too late.

This experience taught us the importance of due diligence when selecting an attorney. To help you avoid similar mistakes, here are ten questions to consider when interviewing attorneys for your startup:

1. Has the attorney worked in your industry before?

2. How much time can they dedicate to your needs?

3. Who else in their firm can help you if they are unavailable?

4. Have they worked with companies that have raised multiple rounds of financing?

5. Can they create and advise on a Capitalization Table?

6. Can they assist with compensation packages and stock options?

7. Do they have experience with intellectual property and patents?

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8. Have they worked with companies that have a global footprint?

9. Do they understand mergers and acquisitions and successful exit scenarios?

10. Can they provide references from other startup companies they’ve helped?

By asking these questions, you’ll increase your chances of finding an attorney who will truly support your startup’s success.

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