THE CASTLE

Numerous parallels can be drawn between a tech start-up company and an ancient castle community. First, the success of both depends on their ability to effectively protect their assets from encroachment. Second, the founders of both initially face significant resource constraints necessitating appropriate resource allocation between competing demands. Finally, both stand to benefit from implementing strategic makeshift solutions to overcome the aforementioned challenges. It is into this often chaotic world that the tech lawyer is thrust when assisting a tech start-up.

THE PROTECTION

The principal assets of a tech start-up consist almost entirely of intellectual property. Founders usually appreciate the need to safeguard these assets, but lack the technical legal knowledge to do so themselves. Often, a tech lawyer is therefore retained (and relied on) to construct the walls that will protect the intellectual property from a potential siege. But how comprehensive, complex and customised should this protection be?

THE RESOURCES

Given the aforementioned responsibility, it can be tempting to immediately start erecting the walls of Constantinople. The Tech lawyer must, however, recognise that tech start-ups almost universally face critical resource constraints during the early stages of growth. Every brick that is laid by the tech lawyer in defence of the intellectual property will therefore divert resources away from the core enterprise and/or dilute the equity interest of the founders. It is thus crucial to minimise costs at this stage of the venture.

THE RESOURCE ALLOCATION

One of the most effective means of reducing costs is to generate economies of scale by spreading the cost of production widely. Within the legal context, this can and should be done by creating prefabricated template documents that are exceptionally simple, clear and generic. During the early stages of growth, these prefabricated templates should be provided to the tech start-up with the absolute minimum viable amount of customisation (by the lawyer). The aim here is to reduce costs, so as to balance the need for legal protection with the tech start-up’s resource constraints.

THE MAKESHIFT APPROACH

These simple, clear and generic prefabricated templates (with the minimum viable amount of customisation) are unlikely to provide the absolute maximum amount of protection. This is a risk, and the tech lawyer should ensure that the start-up founders understand and accept this risk. The tech lawyer should furthermore explain that these documents are meant to function as a bridge until the cost of more customised and comprehensive protection can be justified.

THE RESULT

If we, as technology lawyers, are unable to reduce the legal costs during the start-up phase, we will increasingly face competition from “do-it-yourself” contract automation software. During the early stages of start-up growth, we should focus on simple, generic and cost effective fortification of a tech start-up’s intellectual property. The protective moat-inhabiting crocodiles can be added later, when the start-up can afford them.