Startup Contract Lawyer

A SAFE is fast to sign, but investors and their counsel still look at the foundation behind it. The usual checklist: every founder has signed a present-tense IP assignment to the company; founder restricted stock has a timely 83(b) election on file where one was needed; contractors and advisors have assigned their work and equity is documented with a vesting schedule and cliff; the cap table is a single source of truth that matches the stock paperwork; and board and stockholder consents exist for the issuances. A SAFE itself is short, but understanding post-money dilution before you sign matters more than the document length. This is general information, not legal advice.

This is the single most common diligence gap I see. If a developer, designer, or consultant built part of your product without a signed, present-tense invention-assignment, they may still own that work, and "work made for hire" language alone does not always transfer IP outside the narrow categories the Copyright Act lists. The fix is a present-tense assignment (the contractor assigns IP to the company as it is created, not a vague promise to assign later), paired with confidentiality, a moral-rights waiver where applicable, and a license to any pre-existing tools they wove in. I draft these as a clean set so ownership consolidates in the company. This is general information, not legal advice.

Advisor equity is usually small and almost always should vest. Common market ranges run from roughly 0.1% to 1.0% depending on the advisor's profile and time commitment, granted as a stock option or restricted stock, and typically vesting monthly over about two years with little or no cliff (the well-known FAST template is a frequent starting point). The two things that cause trouble later are a handshake promise with no written agreement and equity with no vesting schedule, both of which read as red flags in diligence. A short advisor agreement should also cover confidentiality, IP assignment of any work the advisor contributes, and a clean termination right. These ranges are general market information, not a recommendation for your company, and not legal advice.

"Fundraise-ready" usually means the corporate record is clean and consistent: a certificate of incorporation and bylaws that match what you tell investors, an organized board and stockholder consent history, founder stock that was actually issued and paid for with stock purchase agreements and timely 83(b) elections, an equity incentive plan if you are granting options, and a cap table that reconciles to every one of those documents. Incorporating in Delaware is the easy part; the gaps tend to be missing consents, stock that was promised but never properly issued, and a cap table that drifted from the paperwork. Forming or fixing the entity itself is corporate-formation work; the contract layer (founder, contractor, and advisor agreements) is what I focus on here. This is general information, not legal advice.

A pilot is where startups most often give away the core product by accident, because the design partner sends their enterprise paper and it quietly assigns or broadly licenses what you build. A protective pilot or design-partner SOW does the opposite: it defines a narrow scope and clear acceptance criteria; keeps your pre-existing IP and platform as yours, with partner feedback flowing back only as a license to you rather than an assignment to them; sets confidentiality both ways; disclaims implied warranties because it is a pilot, not a finished product; caps liability at the fees paid; states how their data is handled; and runs for a fixed term with a clean exit. The goal is a usable pilot that proves value without leaking the IP that the whole company is built on. This is general information, not legal advice.

If your product makes decisions or guards a customer's systems, the contract has to draw a clear line on what it does and does not promise. A workable framing states whether the product is advisory or log-only versus actually blocking actions, and says plainly that no control layer catches every risky action. It keeps a human-in-the-loop and assigns the customer responsibility for their own final decisions; scopes security and data representations to the pilot rather than promising enterprise-grade guarantees; sets incident-notification terms; disclaims any professional-advice warranty; and caps liability so a single pilot does not expose you to uncapped product liability. The point is to ship the pilot and learn, without signing up to insure the customer against every bad outcome. This is general information, not legal advice, and not a guarantee about your specific product.

A clean legal data room is grouped so an investor's counsel can find everything fast. Corporate: certificate of incorporation, bylaws, board and stockholder consents, the cap table, 83(b) elections, and stock purchase agreements. IP: founder, contractor, and advisor IP-assignment agreements, trademark registrations or applications, and a record of open-source usage. Commercial: customer, vendor, and design-partner contracts. People: offer letters, confidentiality and invention-assignment agreements, and contractor agreements. Financing: prior SAFEs or convertible notes. Compliance: anything industry-specific that applies to you. The gaps that slow a round are almost always missing IP assignments, undocumented advisor equity, or a cap table that does not reconcile to the paperwork. This is general information, not legal advice.

The recurring red flags that make an investor slow down or reprice: missing IP assignments from founders or contractors; founder stock with no timely 83(b) election; advisor or early-hire equity promised verbally with nothing signed and no vesting; missing board consents for issuances; open-source license contamination in the codebase (a copyleft license that could reach your proprietary code); customer contracts with assignment or change-of-control traps that complicate an exit; and the absence of a single, reconciled source-of-truth cap table. Most of these are fixable before you pitch, and fixing them quietly beforehand is far cheaper than discovering them mid-diligence. This is general information, not legal advice.

Before your first priced round, the things most likely to hurt you later are: a broad IP license or assignment to a design partner or customer; an exclusivity or most-favored-nation clause that boxes in your future deals; an uncapped indemnity; a personal guarantee; advisor equity without a vesting schedule and cliff; a SAFE signed before you understand post-money dilution; contractor work taken without a present-tense invention-assignment; and an NDA with a residuals clause that runs against you, letting the other side keep using what they learned. None of these are automatically fatal, but each one is much cheaper to fix before you sign than after an investor finds it. This is general information, not legal advice.