Top 10 Contract Mistakes That Can Sink Your Startup

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Protect your startup with key insights on avoiding costly legal traps!

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Are your contracts putting your startup at risk?As a startup founder, your innovation and vision are key, but the foundation of your company’s success rests on strong legal agreements. <a href="https://accesssiliconvalley.net/" title="https://accesssiliconvalley.net/" target="_blank" data-msys-clicktrack="0" rel="nofollow noopener noreferrer">Access Silicon Valley</a> invites you to join us for "Top 10 Key Contract Mistakes That Can Sink Your Startup," a critical session for founders and leaders of early-stage companies. <a href="https://www.swlaw.com/people/eli_mansour/" title="https://www.swlaw.com/people/eli_mansour/" target="_blank" data-msys-clicktrack="0" rel="nofollow noopener noreferrer">Eli Mansour</a>, a partner at <a href="https://www.swlaw.com/" title="https://www.swlaw.com/" target="_blank" data-msys-clicktrack="0" rel="nofollow noopener noreferrer">Snell &amp; Wilmer</a> and experienced advisor for startups, will guide you through the most common (but often costly!) contract missteps that can jeopardize your business and technology—or worse, make your company unfundable! Why This Workshop MattersAs your startup grows, you'll be entering into contracts with employees, contractors, vendors, customers, and investors all of which can impact, restrict or harm your technology and intellectual property rights. Serious mistakes in these agreements can lead to intellectual property and legal disputes which not only threaten your operations but can also send red flags to potential investors and acquirers, making it harder to raise capital or close deals.Whether it's a poorly structured NDA, vague payment terms, or failing to properly draft your privacy policy, these mistakes can delay your growth or even derail your entire business. Eli Mansour has seen firsthand how these errors can cripple startups. In this session, he’ll break down the Top 10 Key Contract Mistakes founders make: Key Contracts and Common Pitfalls to Consider1. Non-Disclosure Agreements (NDAs)Do: Customize NDAs to clearly define the scope of confidential information and permitted exceptions, scope of permitted use, permitted recipients, and ensure protection of your trade secrets.Don’t: Use form NDAs or vague or overly broad NDAs that may be unenforceable or make potential partners hesitant to engage in deals. 2. Proprietary Information and Inventions Assignment Agreements (PIIAAs)Do: Have every founder, employee and contractor sign an agreement assigning their work product and inventions to your startup to establish clear and documented title of ownership over all intellectual property they create.Don’t: Neglect to secure IP ownership early—failing to do so can result in IP disputes that make your startup less attractive to investors. 3. Licensing AgreementsDo: Clearly define scope of licensed intellectual property and licensed rights, ability to create derivatives or new works using intellectual property and resulting ownership, royalty-bearing products and scope of royalty obligations.Don’t: Use template license agreement or agree to overly restrictive terms that limit your control or growth opportunities, which can make your business less appealing to future investors or acquirers. 4. Employment and Independent Contractor AgreementsDo: Clarify IP ownership, compensation, and the scope of work in all employment and contractor agreements.Don’t: Rely on informal or verbal agreements, as this can lead to disputes over IP ownership and compensation that raise red flags with investors. 5. Ambiguous Payment TermsDo: Establish clear payment schedules, penalties for late payments, and consequences for breaches in customer and vendor contracts.Don’t: Leave payment terms vague. Unclear payment terms can cause cash flow problems and disrupt operations, which can alarm investors. 6. Terms of Use and Privacy PoliciesDo: Draft robust, legally compliant terms of use and privacy policies that clearly explain how customer data is collected, stored, and used.Don’t: Overlook these documents. Failing to address privacy issues can result in fines, lawsuits, and loss of trust from customers and partners. Ensure your policies comply with GDPR, CCPA, and other relevant regulations. 7. Data Protection and Privacy TermsDo: Include specific data protection clauses in agreements that address how sensitive data will be secured and used.Don’t: Ignore privacy and data protection clauses—investors and partners take data security seriously, and lapses can lead to penalties and reputational harm. 8. Intellectual Property Ownership ClausesDo: Ensure that all contracts with manufacturers and CROs clearly state that IP created in the course of their work belongs to the company.Don’t: Assume IP ownership is implied. Failing to explicitly secure IP rights could result in losing control of critical assets. 9. Partnership AgreementsDo: Clearly define each party’s roles and responsibilities to avoid future conflicts.Don’t: Fail to address how to terminate the collaboration or to deal with financial challenges—this uncertainty is a red flag for potential investors. 10. Software Licensing and SaaS AgreementsDo: Review infrastructure and IT agreements to ensure you retain flexibility, have clear payment obligations and control/ownership over your data.Don’t: Enter into long-term exclusive software agreements that could limit your ability to pivot, terminate or otherwise restrict your usage data. Why These Mistakes Make Startups UnfundableInvestors don’t just invest in an idea—they invest in companies with sound legal and operational foundations. Contract mistakes, particularly those involving intellectual property or privacy, can be major deal-breakers. Investors are quick to spot these red flags, and such errors can lead to delays or even the complete collapse of funding opportunities. In this workshop, Eli Mansour will show you how to create well-structured, investor-friendly contracts that protect your startup and make it more attractive to investors, partners, and acquirers.Don’t miss this opportunity to safeguard your startup’s future and position your company for long-term success. About the Speaker<a href="https://www.swlaw.com/people/eli_mansour/" title="https://www.swlaw.com/people/eli_mansour/" target="_blank" data-msys-clicktrack="0" rel="nofollow noopener noreferrer">Eli Mansour </a>is a partner at <a href="https://www.swlaw.com/" title="https://www.swlaw.com/" target="_blank" data-msys-clicktrack="0" rel="nofollow noopener noreferrer">Snell &amp; Wilmer</a>, a full-service law firm with over 500 attorneys. He counsels clients on a variety of technology transaction matters including the discovery, development, protection, licensing, and commercialization of pharmaceuticals, novel life sciences solutions and medical devices, and related intellectual property. Eli regularly drafts and negotiates clinical trial agreements, development, manufacturing, distribution, and complex licensing agreements and has extensive experience in device discovery agreements, joint venture agreements and technology assignment, and transfer transactions. Additionally, Eli is a passionate aviator and advises corporate flight departments and individuals seeking to acquire, lease, or share the use of turboprop and turbojet aircraft and has extensive experience with various aviation transactional matters as well as FAA and international aviation regulatory issues. He also holds an FAA commercial pilot’s license for fixed wing and rotorcraft-helicopter as well as instrument ratings for fixed wing and rotorcraft-helicopter and an FAA remote pilot’s license for small, unmanned aircraft systems (UAS).