1. The right financing?
Be aware that your financing provides you with the necessary flexibility and rights to operate your business as intended and to obtain future additional financing at attractive terms. Cheap financing at the outset may prove expensive later on.
2. Does your business require a licence?
Clarify whether your business requires an authorisation from the Danish FSA. This will have practical implications for capital requirement, valuation of the business, your business model, budgets, staffing etc.
3. Lack of intellectual property rights
If you have asked a consultant or external programmer to develop the software on which your product is based without reserving the intellectual property rights (IPR) to the software, you don't own the IPR. This may be detrimental to the value of your business.
4. Using open-source software?
The commercial exploitation of your product may be impeded by your use of open-source software subject to inexpedient licences.
5. Adequate contractual protection?
Do your partnership agreements, supplier agreements and customer agreements provide you with adequate protection and clear contractual rights (e.g. exclusivity, non-compete clauses, IPR, termination, exit regulation, etc.)? Taking the time to conduct, and incurring the cost of, a legal review of your material agreements will be worthwhile in the long term.
6. Avoid or mitigate the risk of subsequent disputes amongst the founders
While many founders start out as friends, there is always a risk that disagreements regarding the future strategy of a start-up, exits, etc. may subsequently create the basis for disputes. Try to avoid or mitigate the risk of such disputes by drafting a proper shareholders' agreement addressing the issues likely to occur and designing solutions to these.
7. Losing the first mover effect
If you publicly announce your business idea before having protected the rights on which it is to be based, you run the risk of losing your first mover advantage by allowing others to introduce a competing product before or at the same time as you. Remember to use a non-disclosure agreement.
8. Incentive schemes for employees
Offering employees an incentive scheme may in certain circumstances be an attractive alternative to regular salary payments, but make sure you retain control over any minority shareholders by making the allotment of any equity rights to such employees contingent upon the conclusion of a shareholders' agreement containing, amongst other things, proper tag-along and drag-along clauses and an obligation for the founders to sell if a minority shareholder ceases to be an employee (good/bad leaver).
9. Compliance with data protection requirements
The proper protection of data is more crucial than ever to ensure compliance with data protection regulation, avoid significant fines and provide partners and customers with comfort. Take the time to liaise with a specialist on how to ensure proper protection, for instance if you are using cloud-based solutions.
10. Prepare for a future sale - handling of documents
Any future potential buyer of or investor in your business will request a due diligence review of your business, and the quality of the virtual data room will have an impact on the sale price. Collecting and uploading such information into a virtual data room will be onerous and time consuming, but it will be much easier if you have prepared for the future by filing documents in a proper document handling system (preferably not Dropbox).