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Guides
Insights
Employment Agreements vs. Independent Contractor Agreements: What Founders Should Know
Startups often rely on both employees and independent contractors. But these are legally distinct relationships - and using the wrong type of agreement can create serious legal and financial risks. Misclassification can lead to tax penalties, lawsuits, and regulatory violations, especially in strict states like California and New York.
Offer Letters for Startups: What Founders Need to Know
Hiring your first employees is an exciting milestone. But it’s not enough to agree on salary with a handshake. A clear, well-drafted offer letter sets expectations, outlines key terms, and helps reduce the risk of misunderstandings later.
Fired or Quit? Why It Matters Legally for Your Startup
When someone leaves your company, founders often want to just “move on” - but whether the departure was voluntary or involuntary has lasting legal and financial consequences. From unemployment claims to final pay rules, the details matter.
FAQs
Open allBecause without them, your startup may not legally own its core technology - a major risk in funding, acquisitions, or IPOs.
Generally yes, but enforceability can depend on state law. Some states restrict how broadly employers can claim ownership, so tailoring language matters.
Yes. Contractors often create code, designs, or strategies, and without an agreement, they may legally own the IP.
They serve the same function - assigning inventions to the company and protecting confidentiality. The terminology varies by company or industry.
Yes. Pair NDAs with confidentiality and IP assignment agreements to ensure ownership of work product and protection of sensitive data.
Yes, but courts often scrutinize them. NDAs that are too broad or vague are harder to enforce.
Two to five years is standard. Trade secrets may be protected indefinitely if defined clearly.
Most venture capitalists won’t sign NDAs at the pitch stage. However, some strategic investors or partners may sign if sensitive technical information is involved.
Yes. Even a short policy clarifying what licenses are acceptable and requiring license checks before use can protect your company from major risks.
It depends. Copyleft licenses like AGPL may apply even if you don’t distribute your code. Always check terms before using them in your backend.
You could face legal action, be forced to release your proprietary code, or lose investor confidence. Compliance is critical.
Yes, but it depends on the license. Permissive licenses (like MIT or Apache 2.0) allow it, while copyleft licenses (like GPL) may require you to open source your own code.
Be transparent, respond quickly to user requests, and show that you protect data. Investors and customers reward startups that treat privacy as a priority, not an afterthought.
Not always. Consent is required for marketing emails, cookies, and sensitive data. Other legal bases, like contracts or legitimate interest, may apply.
Start with a clear Privacy Policy and limit the data you collect. These two actions cover many compliance basics and set a strong foundation.
Yes. If you collect data from EU or California residents, you’re subject to their rules—even as a small or pre-revenue startup.
Yes. Early compliance avoids costly fixes later and signals professionalism to investors and customers.
Not always. You can rely on other legal bases like contracts or legitimate interest. But consent is required for marketing emails and cookies.
Fines can reach up to €20 million or 4% of annual global revenue, whichever is higher. Even small startups have been fined for violations.
Yes. If you have users in the EU or monitor EU residents online, GDPR applies regardless of where your company is based.