Legal and Business Tips for Startup and Entrepreneurs

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Ideation

When you’re researching or validating your idea, it’s important to talk to as many people as possible (about your startup idea)! 

“But what if someone steals it Assaf?!”

No one is going to steal your idea. 

This happens maybe once in a million cases, and the reason that it hardly never happens is simple:

Finding ideas is easy!

But executing the idea and bringing it to life is really (really) hard! 

It takes:

-> Skill.
-> Money
-> A lot of time (1-4 years),
-> Pain & Personal sacrifice.

And most people don’t have, or aren’t ready to give all of the above. 

So “no”, they won’t steal it. 

But if you share it with people, you’ll get:

-> advice,
-> Insights
-> New customers
-> Potential connections & partnerships that will help you advance your business.

A few practical tips on how to do it: 

  1. Sharing with almost anyone is ok, but you’ll get MUCH more value if you share with people who are in your target audience.
  2. Present your idea/service clearly and make sure you’re asking the right questions.
    Clarity: a 12 year old needs to understand.
    Questions: no leading questions. Use open ended questions. Wait for answers, don’t interrupt.
  3. Be careful of the ‘ugly baby syndrome’ – this is when you show the person that you love your startup so much, that the person doesn’t feel comfortable giving you his/her real opinion.
 

Present the idea in an objective way, even say something negative about it, like: “I’m not really sure this is the best idea” – this makes them feel comfortable to be honest.

Final words:
It’s not fun getting negative feedback, and sometimes people will say things that aren’t even correct or relevant. But try to keep an open mind, and if the same feedback repeats itself, then there’s probably something to it.

I often get asked: *What is the order of doing things in a startup?*
I can write a whole post on this, but here’s the short version:

There isn’t only one ‘right’ way, but here’s a pretty good flow:

1. Find a problem, pain or need.

2. Validate the need / idea – meaning, make sure people really have a need for your solution  – be careful not to ask leading questions (see more on this under “validation” below).

3. Get together a team.
* No, you don’t HAVE to have a team but if you find the right one, it helps.
* and Yes, creating a team can also come before validation. Both are fine.

4. Create an MVP (minimal version of the product / service).
It does not have to be perfect! IT just has to help solve the person’s pain/need. 

5. Cover the basic legal aspects (usually includes a founder’s agreement if you have a team, terms of service or SaaS agreement, privacy policy etc.).

6. Start selling – even if the product isn’t perfect (there is no such thing and it will keep evolving over time)
That’s it – at least for the beginning of the journey!

With all the AI tools out there, don’t be scared, just give it a shot. It’s a great feeling when you get that first sale, even if it’s $5

Validation

50 years ago, creating a company used to be about creating a solution, and then marketing the hell out of it to people.

Today, it’s about recognizing a pain (that’s big enough) and then offering a good enough solution for that pain.

“Ok Assaf, but how do I find that pain?”

Well, it helps if it’s something that you or someone close to you experienced.

But if not, here’s a few ideas (lots more, but don’t want this message to be too long):

  1. Sub-Reddit groups (you can use tools like Gummysearch.com)
  2. Niche Facebook groups
    There’s ton of niche groups, with people asking or complaining about 1 specific thing. Find it, understand it, and see if you can solve it.
  3. Find keywords with high demand and low competition – build a product around it. You can use tools like Google Keyword Planner or “Buildthekeyword.com”.
  4. Write down your own problems or frustrations – then check if others suffer from it.
 

Once you find a problem, you need to see if enough people suffer from it, and if they’re willing to pay (enough) for a solution.

How to be unique in a market where almost anything can be made ‘instantly’ with AI.

“I built in 1 week what previously took me and my CTO 6 months to build – and it’s exactly the same ‘product’ “

This is what a founder (and one of my clients) told me last week.

He’d been working with his co-founder CTO for 6 months, and because of personal reasons they decided to split up.

So instead of finding another CTO, he decided to try build his service/app by himself.

He only had a bit of technical background.
He tried Lovable, Basee44 and eventually decided that Cursor was best for his needs.
He build the web-app in a week.
But that’s not even the point.

We all know that you can now build crazy stuff with AI – and build it super fast.

The question is:
if everyone can build ‘everything’ (or almost everything), then what makes your product special?

And what prevents your users from just switching to a competitor?

Here’s my 2 cents:
→ UX/UI (5%)
→ Pricing (10%)
→ Uniqueness (5%)
→ Having a story (10%)

→ Timing (being first) (20%)
→ Building a pre-launch follower base (30%)
→ Personal connection + base of followers (20%)

If you’re before launch:
↳ start sharing your journey.
↳ create personal connections.
↳ nurture those first 100 customers.

I talk to about 10-20 entrepreneurs every week, and many of them make the same mistake.

They all share with me that everyone tells them that their idea is great and that they can’t wait to start using their product.

“Ok, but that sounds great Assaf, so what’s the mistake?”

The mistake is that it gives you, the entrepreneur, fake hope.

It’s not real. It’s not validation.

The only real way to validate your idea, is to get people to put their hand in their pocket, and pay for it.

It doesn’t have to be a lot.
It can be a low price.
It can be a downpayment, it can even be a small ‘registration fee’.
Whatever you like, so long as they pay.

Because only when people show that they’re willing to pay, does it mean that they really need your solution.

“But Assaf, we don’t have a product yet”

You’re in luck! It’s never been easier than today to build an MVP, or even an advanced MVP.

It’s faster than ever and cheaper than ever.

You can use No Code tools like Bubble or Webflow, OR you can use AI tools like Cursor, Loveable or Base44.

Bottom line: compliments are great. They make us feel good, but they are not real validation. Always make sure that you really validate before spending years of your life and thousands of dollars.

POC / MVP

Every entrepreneur (and business) needs to be able to answer these 5 questions in a super simple way (so that a 12-year-old can understand) and within about 45 – 90 seconds:

  1. What does your startup do?
  2. Who is your target audience (if not already clear from answer #1)?
  3. What is your business model? (I dare you to say advertisements!).
  4. How/Why are you different from others? (AKA the “why you?”)
    [if you say we have ‘better features’ I’ll smack you!]
  5. Why should I invest in you/your startup now? (aka: the “why now”)

 

I speak to 10-30 entrepreneurs every week and very few know how to really answer this (most get stuck in question #1).

I’ve even seen pitches where after 10 minutes the investor stops the entrepreneur and asks them: “but wait, what is the startup??”.

Master answering the above questions and your startup journey will be so much easier.

Homework:
(“sheesh Assaf, I’m here for the tips not for you to give me stuff to do” 😂)
For this Thursday, practice answering question 1 in just two (short) sentences and share it with the group (if you like).

 

Business Models & Monetization

Most startups use the following models:

  • Subscription model: a monthly or annual payment for a service, based on the plan that the user selected.
  • Credits model: Payment for a service through a package of credits. This model can be linked to the subscription model or treated as a separate model.
  • Advertising model: This model is very hard to profit from unless you have a lot of traffic on your site/app, or you’ve found a niche with little competition and in a sector where advertisers are willing to pay a lot of money per lead or click. For example the mortgage industry (although that business space is already highly competitive).
  • Freemium model: The basic service is provided free of charge, but advanced features require payment.
  • Marketplace: Your platform connects between side A and side B and charges a commission for making the connection. For example, a platform for mentors – you have users who are looking for a mentor and users who want to provide mentoring services. 
  • Affiliation (affiliate marketing): Earning a commission for referring leads or customers. For example, you run a fashion site, and you add an image of a jacket and link on it to Amazon using your affiliate ID (a unique link that you got from Amazon). Every time someone buys through that link, you receive a payment (either a fixed amount or a percentage of the transaction).
  • Leads: Receiving payment for referring a customer to another service provider. For example, you have a website about cars, and you add a form for people who need car insurance. Every time you pass the lead (the customer’s details) to the insurance company, you get paid.
  • Licensing model: You sell licenses to use your software or a product/service you created. For example, you developed code that performs a useful function, and people use it in their own software or websites. You charge a monthly or annual fee for that usage.
  • Direct sales: The classic traditional method: you sell products (including digital products) and charge for each sale.

There are of course many more models, but these are the most common. Sometimes it is better to use familiar models (easier for your customers), and sometimes inventing a new model can be the foundation of the venture itself. Netflix or Airbnb are examples: they took a familiar service but changed the model.

Team / Founders

Cliff is the younger brother of Vesting (a legal ‘tool’ in founder’s agreements used to prevent founders from walking away with too many shares too soon) and they usually go together.

What is Cliff or a “Cliff Period”?

A cliff period is a section in your founder’s agreement that says that if a founder leaves before a certain time, they don’t get any shares / equity.

How long is the average Cliff period?
The cliff period is usually 6-12 months – depending on the stage of the startup and the founder’s situation (but it can be less in some cases).

Does it apply to all the founders?

Yes, usually it applies equally to all the founders.

Example: David, Dayna and Jim started a startup. They each have the *right* to 33% of the shares.

They agreed on a cliff period of 8 months.

So, if David leaves or gets fired within 6 months, he doesn’t get any shares (even if according to the vesting schedule he was supposed to get something).

Again: the purpose is to prevent founders that were only involved for a short time from leaving with shares, because you don’t want an early stage startup that has 2-3 people who aren’t involved but have shares in the Company – it causes a mess.

But you need to be careful with Cliff, because you may need adjustments.

For example, if Jim already worked on the startup for 9 months before David joined, is it fair that he’ll have the same Cliff period as Jim who just joined?

Or: what if David finishes all the coding in just 5 months, and then Jim and Dayna decide to fire him? How is he protected?

There are solutions, but you need someone who knows what they’re doing to guide you (and no, Chat GPT won’t even ask you about this).

 

 

What is *vesting* (of shares) and why it’s so important.

I get this question a lot, so I thought I’d explain.

Imagine the following: you’re 3 founders: Jenny, David and Ryan. You’re sitting at a coffee shop, planning your big startup.

You agree that you’ll each get 33.33% of the shares, you shake hands, raise your drinks and go to sleep all happy and excited.

2 months later, Jenny (the talented programmer), get’s an offer from Facebook. Crazy salary. Her dream come true.

Or option B: she get’s into a huge fight with David. Whichever option you like.

Here’s what happens next:

she says adios amigos, and leaves *with her 33%* which then kills the startup….

Why? Because they agreed that they each get 33%….doesn’t matter when or how they leave…

And that’s why they invented vesting:

Same story, each get 33%, but they’re not really getting it just yet.

They have the *RIGHT* to 33% but that right is only ‘released’ in small bits over a period of 3-4 years (the vesting period) -assuming Jenny stays in the venture…

So if there was a vesting mechanism (let’s say 3 years), and she left after 6 months, she would only get 5.5% – which wouldn’t leave the company crippled.

[4 quarters i n each year x 3 = 12 quarters. So 33% divided into 12 quarters =2.5% x 2 quarters – because we said 6 months]

Today people use reverse vesting for tax reasons, but if you understand vesting it’s enough.

I hope this helped.

 

Everyone thinks their first startup partner is their co-founder. They’re wrong!

Your first real (and substantial) startup partner is your life partner – your wife, husband, girlfriend, or boyfriend.

Building a startup is hard. Very hard! Most entrepreneurs build while working full-time.
The person who feels it most is your life partner / your family.

What you need to do:

1. Share your dreams & plans. Be honest, don’t sugarcoat it.
2. Listen to their fears, concerns and needs.
3. Find the middle ground.
Once you start your journey:
4. Share the journey and updates.
5. Understand that it may be hard for them as well.

Build a support system: surround yourself with entrepreneurs going through similar stages, and/or mentors.

I’ve seen all of these happen so many times and none of them end well. Save yourself the heartache.

Mistake #1: Not aligning expectations.
Founders *assume* there is an understanding, but don’t talk about it. 4 months later they realize that each founder was expecting a different % and now they start arguing and blaming.

Mistake #2: No (reverse) Vesting or Cliff period.

Vesting = when shares are given over a period of time, instead of immediately.
This mechanism helps prevent a founder from leaving with a big chunk of shares too early.

Cliff = a minimum time period that if you leave before you don’t get any shares — usually between 6–12 months.

Mistake #3: 50%/50% split with no dispute & buyout mechanism.

But now Steve wants a pink website and Jane wants a green one – so who decides? Or Steve’s not doing the work and Jane wants to kick him out – how can she?
Trust me when I say I’ve seen all of the above happen so many times and none of them end well.
Save yourself the heartache and don’t save on your founder’s agreement. It’s one of the most important documents you’ll sign.

“I deserve at least 50% because I came up with the idea.”

This is one of the most sensitive issues for early-stage founders.

Points to think about:
1. Is a founder investing (large amounts) of their own money?
2. Will all founders dedicate the same time and effort?
3. Did a founder work on the idea before the others joined? And did they make substantial progress?
4. What will be the emotional results of an *unequal* split?
5. What happens in a deadlock (tie) situation?
And the most important question: Will this co-founder help grow the total value of the startup? Remember: it’s better to own less of a big ‘pie’, than owning more in a small ‘pie’.
Solutions:
One example most people don’t know: the equity and profit split can be different. For example: Founder A holds 51% ownership, and Founder B owns 49%, but Founder B gets *60%* of the *profit* (not 49%).

First off – when do you need an agreement? 
Answer: NOT when you’re at the “I have an idea” stage, but  YES after you’ve been working together 1-2 months or you’ve already started creating IP.

The 5 mistakes:
1. Division of shares – try to avoid 50%–50%, and if you can’t, make sure you have a mechanism for solving tie decisions + for firing a founder.

2. Vesting + Reverse vesting -you have a right to receive the shares over time, and if certain ‘events’ happen, some of your shares are returned to the company/other founders. Make sure the ‘events’ are clear and vesting periods make sense.

3. IP ownership – all intellectual property (IP), like the code, should belong to the Company and not to any specific founder.

4. Board of Directors / Voting rights / Special Decisions -clearly define who is on the BOD, and topics which require a special majority (prevents majority from harming minority shareholders).

5. Firing of founders – clearly define how founders are fired. Methods: a list of events which cause a founder to be fired, or majority vote. The problem: doesn’t work with 50%–50%. Solution: BMBY mechanism.
There are many other issues (founder loans, signature rights, defining roles and obligations, tag/drag along rights) – which is why the founder’s agreement is so important!

“We’re a tech startup at a relatively early stage. I’m doing all the work, and my co-founder isn’t doing what he is supposed to. We don’t have a founders agreement. What can I do?”
I hear this so often.  Don’t let this happen to you. 
When it’s TOO SOON:
When it’s YES:
1. “We’ve been working together for 2 months and we think we’re a good team.” OR
2. “We’re starting to develop an advanced MVP/product.” OR
3. “We’re investing more than a few thousand NIS/$”
Can we agree on a handshake? Yes, but how will you prove things in court?
Can we use a template from the internet or GPT? Yes, but it probably won’t give you proper solutions.
How much does it cost with a lawyer?

In one of the episodes of Two and a Half Men, Walden (Ashton Kutcher) – who owns a Billion $ tech company – gets removed from his role as president by his ex-wife and mother (ouch – talk about bad relationships…). Anyway, after getting over the shock, and consulting with his lawyer (who happens to be his girlfriend – don’t do that…) he comes up with a plan: The company bylaws (תקנון) state that Walden (as the founder) can appoint an additional board member (a director). He appoints Alan (his ‘genius’ friend). Ok, but it’s still 2 against 2 isn’t it? Nope, because according to the bylaws, Walden (as a the founder) has the right to an additional vote if there’s a tie – meaning 3 votes against 2. Baam! Walden re-appoints himself and goes back to managing his own company. But just imagine that if the bylaws didn’t say what they did (great lawyer!) he would’ve been completely disabled from running the company that he founded! *Quick take-aways:* 1. Alan is a f-ing good actor. :😉 2. Your lawyer shouldn’t be your girlfriend (spoiler: they eventually separate). 3. Be very careful who you appoint to the board (fun fact: there are tons of – true – stories of investors who become board directors and then kicked out the founders. 4. When dividing shares and appointing board members, think of what will happen when the honey moon period ends. 5. and now for the part where I sell myself….wait for it… baam: Getting a lawyer (who specializes in startups / high-tech – ahem ahem 😂) to draft your founder’s / investors agreement is a ‘must have’ not a ‘nice to have’ (and ‘no’, GPT doesn’t do the job) – and it doesn’t matter which side you are (Walden or his ex/Mother) Happy Thursday. 💪🏼

*How many lawyers does it take to prepare a founders’ agreement? The answer might surprise you.* A few months ago, a nice guy (‘Yossi’) reached out and asked me to review a founders’ agreement. He and his co-founder (‘Eric’) had hired a mutual (neutral) lawyer (the Lawyer), but Eric felt that the lawyer might not protect his interests, so he hired another lawyer of his own. Yossi saw what Eric did, got worried, and asked me to review the agreement for *him*. *The result?* A complicated process, a lot ‘ping-pongs’ on the draft and a waste of money for both of them*. ** I knew from the start where this would lead and told Yossi that it would be best if they both asked the mutual lawyer to lead the process but he didn’t want to. *Important explanations and recommendations:* 👉 It’s true that when there is a joint lawyer, that lawyer must represent the interests of all parties equally (unless you agree that the lawyer represents only one side). So I understand why each side chose to hire their own lawyer. (Tip: make sure in writing that the lawyer represents everyone.) 👉 *But*, the best option is to hire one neutral, joint lawyer. *The advantages are clear:* When I represent multiple founders, I always: *When should you hire your own lawyer?* 👉 When you’re joining an existing startup where the partners already have a lawyer. 👉 In most other business situations where Party A is ‘versus’ Party B – for example, a service provider and customer. Have an awesome day

Good morning 🙃
Over the last 2 months a few founders shared with me that their co-founder CTO decided to leave.
And the truth is: I really felt their pain.
I’ve been in that position before.
We were 3 founders. 2 of us got along well, but the CTO and another founder didn’t, and eventually, just after we signed a large pilot agreement, he told us he was leaving.
Sometimes this situation kills the startup.
Sometimes the other founders find a new CTO and move on.
Either way: at that moment, and the 2-3 weeks that follow – it’s really hard because you feel that your startup is falling apart!
Anyway, here’s some advice:
1. It sucks! Don’t try to hide it. Share your feelings with friends and mentors, do sport and/or meditation – anything that helps with the frustration.
2. Try maintain a good relationship with the departing co-founder. Often, it isn’t personal: co-founders leave for their own reasons. And even if you didn’t get along, you never know what will happen down the road. So keeping things friendly, or at least professional, is always smart.
3. Document (לתעד) things. Sign a separation agreement, or at least a summary email making things clear (who owns the IP, can you compete with each other? Does the departing founder have rights to shares?). Agree on a fade-out / support period. If you’re in the middle of a pilot, you’ll need their help.
4. Focus on finding a new CTO (if you need one). You’ll be surprised what you can do with apps like Lovable, Base44 and Claude – at least for the early stages.
*Ways to reduce the risk of this happening – or at least make sure that if it happens you’re in a better position:*
a) Align expectations from day one + sign a founder’s agreement.
b) have open communication. Schedule open talks over coffee every week or two.
c) don’t only work. Do things that help build the relationship like playing paddle or going out for a beer.
Remember: even though it might feel like the end of the world, it’s not. It’s just another challenge in the roller coaster that’s called a startup!
Keep your head up, don’t fight the shitty feelings, and move on…💪🏼

Advisors / Mentors

Advisors and Advisory Boards

What is the Advisor Board?
It’s a person, or group of people (1-5) that give advice (business, technical, marketing, legal) to the founders, help them ‘open doors’, mentor them, and connect them with the right people/investors/customers.

Why do I need advisors?
Not everyone does, but the right advisors can add a lot of value and help you save time + avoid mistakes.

What type of advisors should I get?
The right advisors are:
1. People who (really) care and are enthusiastic about you and your startup.
2. People who (really) have the relevant knowledge, connections and skills to help you and/or your startup advance/succeed.

How much are they usually involved?
1-5 hours per week. Sometimes more, sometimes less. Depending on the type of advisor.

Do I pay them? How much?
Yes, most advisors want compensation for their time.

  1. Fee per hour.
  2. Options / shares (“equity”).
  3. A combination of both.

How much equity is usually given?
Before raising money:
* 0.25% – 0.5% for light involvement (a few hours a month).
* 0.5% – 1% for more hands-on involvement / more value.
* 1% – 2% intensive ongoing involvement with strategic contributions and lots of value.

Note 1: After raising money, the % goes a bit down because the startup has more value and less risk.
Note 2: some advisors, like me, may take a little more. In the end, it’s all about the value you’re getting. If you feel that an advisor can add real value, it’s better having a little less % of a bigger cake, than having more % in a smaller cake.

Do I need an agreement?
Yes. It’s called a “Board Advisor Agreement”
Key things to cover:

  • Compensation (vesting + cliff).
  • Confidentiality + non-compete.
  • Obligations.

For more info on the agreement, you can read my blog post: https://startuplawyer.co.il/everything-you-need-to-know-about-the-startup-advisor-agreement/

Intellectual Property (IP)

It is crucial that when working with freelancers, you make sure to protect your Intellectual Property (IP).

If you use any type of freelancer, you need to have one of the following:

  •  an IP Transfer + Waiver agreement (including for inventions). This is a 2-4 page agreement that clearly states that you own the IP + covers topics like Non-compete, confidentiality and more (best option).
  • sections in the services agreement with the freelancer that covers IP ownership + non-compete etc. (ok option).
  • an email that specifically states the below (least best option but better than nothing).

 

What does it need to say:

  • Ownership – Any IP that they create is yours/the startups.
  • Full IP Transfer – they transfer any and all rights to any IP to you for no additional cost (except what you agreed as payment).
  • Moral Rights Waiver – they waive any claims about ‘moral rights’ (for example if you change something they created).
  • They only use materials that are theirs or that they have the right to use.

 

P.s.:
✅ Handshakes and verbal deals don’t hold up in court.

✅ Get everything signed before work begins (and if you already started then before it ends).Later it will be hard.

 

  1. Validate. I wasted at least 5 years building stuff nobody needed.
  2. Kill your EGO. Make your users happy instead of yourself.
  3. Don’t chase investors; chase users, and then investors will chase you.
  4. Never hire managers. Only hire doers until PMF (product market fit).
  5. Landing page isn’t important. Go for an average template and edit texts. The sale happens outside of the website (in early stages).
  6. Hire only full stack devs. One full stack dev building the whole product. That’s it.
  7. Chase global market from day 1. If the product and marketing are good, they’ll work globally. If bad, won’t work locally either. So go global — if it works, upside is 100x.
  8. Do SEO from day 2. I ignored this 14 years. My biggest regret.
  9. *Sell* features before building them. Ask existing users if they want a feature before you build it.
  10. 0. Hire only people you’d wanna hug. If I don’t wanna hug someone, I dislike them. Conflict and breakup follow.
  11. Post on X/LinkedIn daily. Primary source of connections, marketing, networking.
  12. Don’t work/partner with corporates. They seem fantastic, promise millions of users. None of it happens. Waste your time, destroy focus, bring no users/money.
  13. Don’t get distracted by hype (e.g., crypto).
  14. Don’t build consumer apps. Only B2B.
  15. Don’t hold on to bad projects for too long.
  16. Tech conferences are a waste of time.
  17. Don’t outsource until you find PMF.
  18. Bootstrap. I raised 10+ times. Today I bootstrap all startups. Huge difference. Obsessed with products & users now, vs. funding rounds before.

A lot of founders come to me after fighting with their co-founder because they realize that they have no access to their Intellectual Property — the code, designs, hosting, domain, software accounts. How does this happen? Usually when the CTO opens all the accounts, they don’t have a founder’s agreement, or the agreement isn’t good. The agreement should say that all the IP belongs to the company, so you could threaten legal action or go to court, but the easiest way to prevent this mess is: 1. Have a founder’s agreement (add this section) 2. Make sure you both have access to all accounts This is not just an IT issue — it’s a legal one. Take it seriously from day one.

Good morning 😊 I’ve worked with startups for over 10 years! Here are 6 super important things that every entrepreneur should know before starting: *1. Choosing the right co-founder is crucial!* ↳ Your partner will make or break the startup! ↳ Align expectations in advance. Share your thoughts, hopes, what you’re good / suck at! ↳ Even if you’re friends, working together is different from hanging out together – prepare yourself. ↳ Choose someone you enjoy having a coffee with – you are going to spend a lot(!) of time together. *2. Don’t develop a product/service before making sure there is a real need! Just don’t!* ↳ You love the idea? Great. But before rushing to build, check that: → People really suffer from the problem + need the solution. → People are willing to pay for it. → The amount they are willing to pay is enough for you to dedicate 1-3 years of your life. *3. Use a lawyer!* ↳ Don’t have a lot of money? That’s fine but at least take a few hours of consultation so you know what to be careful of and what to focus on. ↳ I promise you: two hours with an experienced lawyer will save you hundreds of hours, a lot of money (on mistakes), and maybe more importantly: a lot of grey hairs. *4. Surround yourself with a supportive environment (other founders or mentors).* ↳ You are going to get a lot of “no’s” ↳ There will be a million challenges. ↳ Friends, family, and even your partners won’t understand why the hell you’re doing this crazy thing called a startup. → A supportive system will help in the tough moments. *5. Your intellectual property (IP) is critical – make sure it’s really yours!* ↳ One of the founder’s or a freelancer is writing code? Great, make sure there’s an agreement that says all the IP is the company’s (or the startups’) and not theirs. *6. Put your ego aside.* ↳ The more open you are to opinions and advice –> the more you’ll learn. ↳ This doesn’t mean you have to *do* what they say, but just listen. Startup life is hard, but it’s also exciting! There’s nothing like receiving the first payment for something that you built – even if it’s not even enough to by a falafel. And if you have the right advisors/mentors and a good team, your chances are much better.

Hey everyone 😊 The business-legal story for the day: A Non-Compete & Intellectual Property Clause Worth Hundreds of Thousands of Dollars $… *[A little long – 2 min read – but worth it…]* A few months ago, I tried to help a nice and talented junior programmer. His first job was through one of the tech placement companies (“PC”) that provide tech training. The agreement included a really extreme non-compete section that prevented him from working or having any business relations with any of the companies that he was placed at – unless it was through PC. Additionally, the IP section said that everything he does while employed by PC belongs to PC. Both of these were very problematic sections, but juniors have a hard time finding work, and don’t always ask a lawyer – so he signed. Later on the guy was placed in a large company and during his work noticed that they needed a technological solution (not something directly related to his job), so, in his spare time (at home) he developed a program that solved the problem more effectively and cheaply than existing competitors. *But remember those non-compete and IP clauses?* According to them, if he told PC about the program they would say that it belongs to them, and if he tried to sell the solution to the company that he worked at he would be in breach of his employment agreement… Everyone was losing: PC, the employee, and the company he worked at… I reached out to PC (anonymously) and explained the situation and the potential benefits, and eventually we reached a commercial agreement: PC help promote the software/venture and in return receive a small share of the profits. In this case there was a happy ending. Unfortunately, in other cases I hear about people who are afraid to sell their software or who just give up on it because they’re scared. *Conclusion: don’t underestimate the non-compete and IP clauses*, even if they’re “buried” in an appendix (attachment of the agreement on page 15) because this can come back to bite you in the butt. Stay awesome 💪🏻 Assaf

Legal/Law Updates

SaaS provider with EU clients? Your customers just got a legal right to leave you.

The EU Data Act (which came into force 12th of September 2025) just changed your legal obligations and relationship with your customers in the EU.

Your standard long/fixed-term contracts and data transfer
processes can now be ‘overridden’ by the Act, and
if you didn’t recently update these terms, then
they’re probably no longer compliant with the Act.


Here are the 7 (main) actions required*:
* a few hours of legal work and your situation is much better!

  1. No more ‘Fixed Term’:
    • Customers now have a statutory “Switching Right.” 
    • They can terminate a fixed-term contract with a maximum 2 months’ notice if they are moving to a competitor or their own ICT infrastructure.
      You can still set a term, but you need to adjust for early
      (2 month) termination.
  2. Protect Your Revenue Legally: 
    • You can still charge a penalty for breaking the contract term, but it must a “proportionate early termination penalty” (e.g., reclaiming the value of discounts granted).
      The fee cannot be tied to the cost of data transfer.
  3. Extended Data Export Period:
    • You must make sure that customers can export their
      data for a minimum period of 30 calendar days from
      the termination of the services.
      Meaning: if you have a section saying that you will delete
      all the customer’s information “immediately”, this is problematic.
  4. Data Transfers Must Be Made ‘Easy’:
    • Data must be made available in a structured,
      machine-readable format to ensure the customer can
      achieve a minimum level of “similar functionality”
      with their new service provider.
  5. You must provide data transfers free of charge.
    • This applies immediately to all contracts signed
      after September 12, 2025 or renewed after this date.
      For customers under contracts before, you can continue
      to charge for transfer costs until September 12, 2027,
      or until the renewal of the contract.

  6. Publish Your ‘Data Manual” (Interoperability Register)
    • You must publish an online register with details of your
      data structures, formats, and interoperability specifications
      (the rules of how your service talks to another service – the
      competing service) before contracting with a customer.

  7. Make Your Agreement Fair:
    I know, what the hell is “fair” right?
    • The Act now prohibits contract terms that create a
      “gross imbalance” in favor of the service provider.
    • For example, one-sided indemnity clause and liability caps
      have a high chance of being determined ‘unfair’ and therefore void.
      → revise these sections (not too hard) to make them enforceable.

 

If you have customers in Europe, these changes are crucial and can help you avoid a lot of headaches.
Feel free to contact me

 

Contracts

“Isn’t an online template or an agreement by GPT enough?”
That’s a question I get asked a lot by new clients.

The short answer: it depends how well you want to sleep at night.

I like to compare the answer to a warrior’s shield (see image):

  1. The warriors from the bible (on the right with the small shield)
    = An agreement made from scratch using ChatGPT.
    → It’s not really an agreement, and it doesn’t really protect you.
    ↳It just gives you a better feeling because you think you have something.
    And if it worked for David (and Goliath), it’ll work for you too, right? 😉

    Why it’s not a real agreement?
    Because you won’t really know what to ask / tell GPT and GPT doesn’t really make agreements (it makes summaries).

  2. The barbarian warrior (middle, with the medium shield)
    = a template from the internet + edits you made after looking at competitors + ‘tips’ from GPT
    → Sure, it’s bigger, but it has tons of missing points and contradictions.
    ↳ And the worst part? It makes you feel even more protected – but the moment the first arrow hits, you’ll realize you didn’t have a real shield at all.

  3. The Roman warrior = An agreement made with a lawyer (who specializes in that field).
    ↳ No, it still doesn’t offer 100% protection (no agreement does), but it’s customized specifically for your needs, so it offers much better protection.
    ↳ And “yes”, it’s more expensive,

 

“Come on Assaf, you’re just trying to scare us so that we’ll use a lawyer.”
Listen: I have enough work + I’m not saying you ALWAYS need a ‘Roman’ shield.


If you haven’t validated your idea + you don’t have money, then of course even a small shield is better than none.


But what’s important is that you don’t go into battle thinking you’ve got a Roman shield, when what you actually have is bible one. 😉

 

The Israeli Copyright Act says the person who made the creation is the owner — “unless agreed otherwise.” But there’s an exception: the *employer* will own any creation made by an employee if it was made “for the purpose of the job and in the course of it — unless agreed otherwise.” “In the course of” is interpreted broadly — anything created while you’re under an employment contract applies. *Even if you work on your startup on weekends.* In 95% of employment contracts, there’s an IP section. Three types: 1. No IP section (very rare). 2. Reasonable: only IP that’s part of your work, or competes with the company, is an issue. 3. Extreme: everything you create belongs to the employer (rare, but can appear). What should you do? 1. Don’t work on your startup during work hours. 2. Don’t use company equipment. 3. Have a professional review your employment contract. This could cost you hundreds of thousands if you ignore it.

An NDA is a Non-Disclosure Agreement intended to protect information you share with others. Two main types: NDA (one side shares) and MNDA (Mutual NDA — both sides share). Legal opinion: yes, it will help protect your information. Common business opinion: Why? Hard part of a startup is building it, not the idea (95% won’t copy) + very few new ideas + investors/lawyers won’t sign NDAs. “Can I use an NDA from the internet?” What NOT to do: Don’t use GPT. Don’t copy from websites without permission (copyright infringement).

  1. NDA — protects your information when sharing with others. Definitely needed if applying for a patent.
  2. Founder’s Agreement — crucial! Organizes obligations and expectations between founders, protects IP, non-compete. When: after you know you’re working together or when you start creating IP.
  3. IP Assignment — makes sure you own the rights to everything (especially if working with freelancers).
  4. Service Provider Agreement — clarifies deliverables, timelines, liability, IP ownership.
  5. Terms of Use — legally defines how users interact with your product. When: before launch.
  6. Privacy Policy — legally required if you collect, use, or share user information (99.99% of startups do). When: before launch.
  7. Incorporation / Registering a company — before creating valuable IP or before launching (to avoid personal risk).
  8. Pilot/Evaluation Agreement — when doing a trial/test with a company/client. Protects your IP and you from damages.
  9. SaaS Agreement — covers the terms of your service if you provide software as a service.

3 tips for choosing a lawyer: 1. He specializes in the field you need! Many lawyers say “sure I do that” when they’ve never done it. 2. His pricing is fair, clear, and known upfront. Hourly lawyers = high risk of misunderstandings and surprise bills. 3. You have good personal connection. A lawyer that likes you will go the extra mile. How to improve work with lawyers and save money: 1. Organize all your information clearly — if your lawyer needs to tidy it, you’re paying for that time. 2. Microsoft Word only! Google Docs means 20–30% more time (and cost). 3. Tell him your communication preferences (emails, WhatsApps, calls). Tell him what’s important and whether you’re the stronger or weaker side in negotiation. P.s.: Make sure he is really YOUR lawyer. If you’re 3 co-founders and hired him to represent everyone, he represents all 3 + the company — and all 4 won’t always have the same interests!

Most startups won’t land huge companies the minute their MVP is ready. Usually you’ll start with a pilot/trial phase (paid is better). Why do you need a professional pilot agreement (not just a price proposal or GPT template)? 1. A price proposal won’t include important sections: IP ownership, non-compete, limitation of liability — and GPT doesn’t adjust to your situation. 2. A simple price proposal might make you look unprofessional. If dealing with a medium or large company, especially US-based, not sending a professional agreement may hurt you. The only small disadvantages: But advantages outweigh disadvantages.

Hey Everyone 🙂 Changing just a few words = a huge difference to the future of your startup. This post is a little long, but if you work at a company or plan to, AND work at the same time on your startup, then take 60 seconds to read this. You’ll thank me later! [I’ve written about this before, but I see this happen so many times I had to write about it again.] Here’s an example of 2 sections from a common high-tech employment agreement: “4. The Employee shall not be involved directly or indirectly in providing business, professional or commercial services to any other person, firm, or corporation during the term of this Agreement, whether or not such services are provided for gain, profit or other financial advantage.” “6. I hereby assign to the Company all my right, title and interest in and to any and all Inventions and Intellectual Property…made or learned by me, either alone or jointly with others, *DURING* the period of my employment with the Company.” *The result of these sections*: you are not permitted to work on your startup, and if you do: (1) the company owns your IP + (2) you are breaking your contract. *Easy solution:* Before signing, make two changes: Section 4: change it so you can work, on your own time, on personal (non-competing) projects. If you do this before signing, most companies don’t mind! Section 6: change “during” to: “specifically for and part of my work for the Company”. *Obviously, you might need more changes, but at least now you know what to look for.* “But what if I already signed?” Well then you’re fuc#ed… Just kidding. 😉 There’s usually a solution for most situations. Talk to me. Be cool and share to friends who are working on their startup while working at a company. Have an awesome day 💪🏼

Hey everyone 😊 Legal story time: Yesterday a potential client reached out and asked me what would be the cost to review an agreement (that he created with GPT). I looked at the agreement and gave him an estimate. He thought it was a bit expensive and said he’d probably manage on his own. Thanked me for the call and we parted as friends. I later looked again at the agreement (I was curious). Here’s one line (from the fee section): *Background: the agreement said that the developer would develop an app for him, and payment would only be made if the entrepreneur raised funds. “7.1. In the event that the investment amount is less than $2 million – the developer will receive $100,000.” Take a moment and try guess what’s wrong with that sentence? Did you get it? According to this wording, if the entrepreneur raised just $90,000 (which definitely counts as “less than $2 million”), he would have to pay $100,000. Obviously, that makes no sense, but that’s what was written – and if signed, would be binding! Bottom line: I’m not against using AI at all, but do yourselves a favor: for any deal worth more than a few thousand shekels, work with a lawyer. And even for smaller deals, at least take one consultation session. It’ll cost you an hour of legal fees, but save you tons of mistakes and expenses later. Take care everyone. 🙏😊

Hey Everyone It’s been a crazy busy week so I didn’t have time to share. Sorry, I know you can’t live without my boring posts 😂 Anyway here goes. Two true stories about 2 different clients. Today I’ll share story #1 Let’s call the client David. David is a freelancer that does design work. He worked for a big company for a while without a contract. Then the company realized they needed one, so they sent him a really, really long (40+ pages) MSA agreement (Master services agreement)*. *This is usually for complicated software develop services. David (to me): “can you review the agreement?” Me: “this agreement is crazy. I can review it but it’s not suitable for your situation and reviewing it will cost a lot of money. Ask them to send a simple service provider agreement” David: “they won’t agree.” Me: “ask them” David: “…….ok” 1 week later: David: “they said they’d send a service provider agreement” Amount of money charged by me: 0 Amount of time required for David to get a much better/shorter agreement: 5-10 minutes. Amount of money David saved on legal expenses just by asking: a few thousands of shekels. Conclusion: just because you get a specific type of agreement, doesn’t mean that you need to agree to it. Get advice, ask a lawyer. A short 1 hour of consultation can save you a ton of money. And “no”, I’m not promoting my services. I’m swamped with work. Use any lawyer who does high-tech contracts – just don’t do it yourself. Have a great day

“I’m starting a SaaS venture – what legal stuff do I need to finalize before launching?” I hear this question a lot, so I thought I’d share the answer. And good morning 😊 *1. Incorporation:* to best protect yourself, it’s wise to set up a company (which is considered a separate legal entity/body than you). So if anything happens, they ‘come’ to the company, not you personally. *Note:* If you’re just testing your service with friends and family, your exposure is obviously low, so you could wait a bit with the company – but there is a small risk). But if you’re developing your IP a lot, don’t wait. *2. SaaS Agreement:* Software as a Service agreement. If you’re helping B2Bs, they’ll expect this. You can set this up in a way that minimizes some of the legal headache. *3. Privacy Policy:* Need when processing personal data for your customers, or their customers, you’ll likely also need a DPA (Data Processing Agreement). *4. Terms of Use:* needed if you have a website. It explains to the users the ‘do’s and don’ts’ on your website and helps protect you. *5. Founders’ Agreement:* very important if you have co-founders. *6. Business Insurance:* not that expensive, and worth it (if you have the correct coverage). *7. Trademarks + Patents:* Important if you’re developing deep tech, but it depends on your budget and the type of tech (remember: technology moves fast: innovation of today might be replaced in a few months). *”But what do I do if I don’t have enough money for everything?”* Start with the most important agreements. Some entrepreneurs (and this is *NOT* legal advice!) launch with templates (bought online – not copied!) and then go to a lawyer once they’ve validated the idea. ** Important: templates = about 60% protection. Agreement from a lawyer = about 95%. (There’s never 100%, which is why you setup a company + do insurance). Share with friends who are working on a SaaS. Message me if you need help setting this up.

Hey Everyone 😊 Something not so cool that I’ve seen recently – and it’s super important before you negotiate/sign a contract. So this is what I’ve been seeing: I send an agreement to the other side and get it back with changes. But either none of the changes were made with Track Changes (see below), or some changes were, and some weren’t (meaning that you can’t see what was changed). *What’s “Track Changes” (TC)?* It’s a feature in Microsoft Word that makes it easy (and fast) for you to see what was changed (it shows the change in a different color and adds a line on the side of the page). Lawyers almost always use TC. But lately, I’m seeing more and more cases where the other side just doesn’t use it. If it’s someone who is not a lawyer, that’s understandable (even though it can still cause issues for you). If it’s a lawyer – that’s a red flag! *Why is it a problem?* Because if you can’t see what changed, you might end up signing an agreement with terms you never really agreed to. *”Ok, got it. Solutions please?”* Here you go: 1. Ask the other side politely to use Track Changes. * If it’s a lawyer, this should be automatic, but it doesn’t hurt to make sure. * If it’s not a lawyer, just make sure they know about the feature and will use it. 2. If you’re the one sending the document, lock the Track Changes setting. * That way, no one can make edits without them being visible (see image). Just don’t forget the password you chose. 🙂 3. Forgot to lock the document or the other side “forgot” to use Track Changes? Or maybe they ‘went around’ the lock?* * Don’t worry, you can use Word’s “Compare Documents” feature. * It compares the original version to the new one and shows all the changes. See picture. And ‘Yes’, it is possible to get around the lock by copy/pasting everything into a new document – thanks, Microsoft…[If someone does that – you should ask yourself if you should be doing business with them]. Have a great day 🙏🏼

Hey Everyone I hope you are all ok despite the situation. 💙 I haven’t written in a while because: 1. I’ve had a ton of work. 2. It felt strange writing when most of us are under rocket fire. 🙂‍↕️ But some of you asked, so here goes… *Topic: “What documents do you need?”* A lot of entrepreneurs that I speak to aren’t really sure what documents they need, and when they need them. They often hear different advice (from friends, the internet and AI) and either pay for things they don’t need, or don’t get the documents that they do need. So here’s a *(basic)* break down: 1. *NDA* – don’t really need it. Investors + lawyers won’t sign it. Potential co-founders won’t either. Just don’t share super sensitive information. If you have a trade secret – then you need it. 2. *Founders Agreement* – super important. When: before you create any important Intellectual Property ((“IP”) = code, website, app…) and once you know you want to work together. 3. *Setting up a company* – before you launch the service to lower your personal risk (a small family and friends pilot is ok) + before you create valuable IP (because if you not you will have to pay taxes later on). This usually goes together with opening a bank account + a Board Decision document. Pro tip: if it’s the end of the year (November…), wait a bit, and save paying the renewal fee. 4. *Terms of Use* – for your website or app or software. You can’t go on the Appstore / Google Play without it. 5. *Privacy Policy* – important because the laws in most countries demand it + you can’t go on the Appstore / Play without it. 6. *IP Transfer* – did anyone help you with the code? Then you must have them sign an IP transfer – otherwise the IP is there’s, not yours. 7. *SaaS agreement* (Software as a Service) – created a SaaS? Congrats! You need a SaaS agrmnt and if you process data, which most SaaS do, then probably a DPA (data processing agreement). 8. *Pilot / Evaluation agreement*? Created an MVP and want to test it on a design partner? This is the document for you. Relatively short and less scary for the other side. There are a few others, but these are the main ones. Not all of you need everything, and you don’t usually need everything at the same time. Some times 1 document is enough, sometimes you need all 3…but there are always solutions. If this helped – give a sign. Feel free to message me what other topics you need help with and I’ll write about them. Stay safe. 🙏🏼

Hey Everyone I hope you’re all ok. 🙏🏼 *Drafting contracts with AI to save money* Potential client (PC): “Hey Assaf, I drafted an agreement with AI and I want you to look at it and tell me that it’s ok.” Me: “Did you do it 100% with AI or did you just improve a template that a lawyer gave you?” Potential Client: “100% Chat GPT + my changes” Me: “sorry, I can’t review it because: ….” I have about 2-3 of these conversations every week, so I thought I’d explain: 1. AI tools are cool. I’ve used most of them (Gemini, Grok, GPT, Claude, Perplexity, Base44, Gamma etc.). Everyone should try them. 2. I’ve also tried 2 AI tools which help lawyers draft/review documents. 3. My conclusions: Here’s why I don’t check them: 1. I’ve tried. And the amount of work to ‘fix’ the contract so that it’s ‘good enough’ is almost the same amount of time it takes me to draft a really good contract. So not worth the time/money *for my client*. 2. If I did review + fix it, the result would be a mix-match of a document (חוזה עשוי טלאים). Some of this, some of that, not what you want. 3. It’s just not worth the risk. The client wants to know if the contract is “ok”. To be sure, I need to read everything = expensive (see point #1). If I don’t read everything, then there might be AI sections which are wrong. So again, just not worth the risk. And lastly: most of the value is not in the drafting. Most of the value is when I talk with my clients and understand their needs. Maybe they don’t need that contract. Maybe they need a different one [when you give a document to a lawyer and say “please review”, most lawyers will assume you need it, and just review it. So always start with: “Do I need this contract?”]. So yes, I know it’s tempting to try save money. I also know that in 1-2 years AI will probably create amazing contracts. But for now, they just don’t… If you have no choice – I get it, but don’t think that you’re covered and don’t get upset if a lawyer doesn’t want to check it. Feel free to disagree with me 🙂 or send me your thoughts. I just wanted to share with you how things look from the other side. Stay safe!

Management / Goals

Most first time entrepreneurs make these 3 mistakes:

  1. They become the business.
  2. They lose balance (100% work, no personal life).
  3. They forget the end game (an ‘Exit’ / selling the business,
    or at least: the business working for you, and not you for the business).

 

To avoid this, you need to build your business in a way that makes it easy to sell.

A really good book that teaches how to do this is: “Built to Sell” by John Warrilow.

It explains how to build your business so that it is sell-able,
in a light, story-type way. I highly recommend reading it
(and no, I don’t get any commission or anything else).

Here are 3 quick conclusions from the book:

  1. Focus on building a business that can operate without you.
  2. Specialize, productize and systematize your offering –
    Rather than your business doing everything, you should
    pick a single service or product you do best, create a
    repeatable process around it, and build a
    standardized offering that can scale.
  3. Build recurring revenue, a diversified client base, and strong management. A company that’s sellable has predictable cash flow (often via retainers
    or recurring services), is not overly reliant on one client, and has a management team and systems in place that will stay
    and run the business after the sale.

 

enjoy: https://builttosell.com/

General / Useful Hacks and tips

I’ve worked with startups for over 10 years! Here are 6 super important things that every entrepreneur should know before starting:

  1. Choosing the right co-founder is crucial!
    ↳ Your partner will make or break the startup!
    ↳ Align expectations in advance. Share your thoughts, hopes, what you’re good at / suck at!
    ↳ Even if you’re friends, working together is different from hanging out together – prepare yourself.
    ↳ Choose someone you enjoy having a coffee with – you are going to spend a lot(!) of time together.
  2. Don’t develop a product/service before making sure there is a real need! Just don’t!
    ↳ You love the idea? Great. But before rushing to build, check that:
    → People really suffer from the problem + need the solution.
    → People are willing to pay for it.
    → The amount they are willing to pay is enough for you to dedicate 1-3 years of your life.
  3. Use a lawyer!
    ↳ You don’t have a lot of money? That’s fine but at least take a few hours of consultation so you know what to be careful of and what to focus on.
    ↳ I promise you: two hours with an experienced lawyer will save you hundreds of hours, a lot of money (on mistakes), and maybe more importantly:  a lot of grey hairs.
  4. Surround yourself with a supportive environment (other founders or mentors).
    ↳ You are going to get a lot of “no’s”
    ↳ There will be a million challenges.
    ↳ Friends, family, and even your partners won’t understand why the hell you’re doing this crazy thing called a startup.
    → A supportive system will help in the tough moments.
  5. Your intellectual property (IP) is critical – make sure it’s really yours!
    ↳ One of the founder’s or a freelancer is writing code? Great, make sure there’s an agreement that says all the IP is the company’s (or the startups’) and not theirs.
  6. Put your ego aside.
    ↳ The more open you are to opinions and advice –> the more you’ll learn.
    ↳ This doesn’t mean you have to *do* what they say, but just listen.

Startup life is hard, but it’s also exciting!
There’s nothing like receiving the first payment for something that you built – even if it’s not even enough to by a falafel. And if you have the right advisors/mentors and a good team, your chances are much better.

I speak to 10–30 entrepreneurs every week and very few know how to really answer this.

Here are the 5 questions:
1. What does your startup do?
2. Who is your target audience?
3. What is your business model? (I dare you to say advertisements!)
4. How/Why are you different from others? (AKA the “why you?”) [if you say we have ‘better features’ I’ll smack you!]
5. Why should I invest in you/your startup now? (aka: the “why now”)

Most entrepreneurs get stuck in question #1.
I’ve even seen pitches where after 10 minutes the investor stops the entrepreneur and asks: “but wait, what is the startup??”

You need to master answering the above questions and your startup journey will be so much easier.

If only someone told me this before I started my 1st startup

  1. No place for EGO.
    You’re going to hear the word “No” a million times. Learn from each time. Put your ego aside. Focus on making sure your users get value, not your ego.
  2. Validate – so many entrepreneurs build stuff that no one needs!
    Make sure people are willing to pay before you build!
  3. Sell the features BEFORE you even built them.
    Ask existing users if they want a feature before you build it.
  4. Don’t aim for perfect – it will only be your enemy.
    Aim for 80% or for “good enough”.
  5. Only hire doers until you have product market fit.
    People who come from the corporate world or people who prefer to manage, most likely won’t be a good fit.
  6. Hire only people you will enjoy spending time with.
    Remember: you’re going to be working with them a lot!
  7. Don’t chase investors; first get as many users as possible.
    The investors will follow.
  8. Try going Bootstrapped.
    Being Bootstrapped forces you to be 100% focused on products & users now. Raising means you’ll be focused on funding rounds, events and news coverage.
  9. Start doing SEO as early as you can.
    It takes some time to see the results, but when they start showing, you’ll be so happy that you started early.
  10. Post on social networks (depending on your target audience) regularly.
    They are a great source for new customers and new connections.
  11. Chase global market from day one.
    If the product and marketing are good, it will work on the global market too, if it’s bad, it won’t work on the local market either. So better aim for the global market so that if it works the profits are much bigger.
  12. Think carefully before working with or partnering with large companies.
    They may seem like a good opportunity but usually the process will be a waste of time, destroy focus, shift priorities, and eventually bring in no users/money.
  13. Know that B2C is MUCH, much, much harder than B2B.
    Better to focus on B2B.
  14. Don’t hold on to a bad project / service / feature / worker for too long. Better to cut things earlier.
  15. Most conferences are a waste of time – unless you’re just going to get out of the office a bit.
  16. Assaf Ben-David is the best startup and high-tech attorney there is. 😊
  17.  

Many of my clients tell me that they wish they would have known X or Y
Before they came to me because it would have helped them avoid a lot of mistakes.

And it’s true. Knowing what to avoid or do differently makes a huge difference in your startup journey.

The good news: all the information already exists.

The challenge is sometimes finding it and having the time to read/view it.

Here’s how you can get the information:

  1. Read books
  2. Listen to lectures / podcasts.
  3. Have coffee with experienced founders.
  4. Join founder networking groups.
  5. ‘Private lessons’ (these can be a great source of value. I offer a 1:1 hour meeting. During the meeting I analyze the startup and the team and give a summary of the legal (and business) aspects that need to be solved/fixed. If you don’t have time to read/listen, this is a much faster method.

p.s.: part of the journey is also making mistakes. So when you do make them, don’t be too hard on yourself – just imaging that you paid for a degree in entrepreneurship 😊

Why would companies want to work with you as a Design Partner (DP)? Who is the right DP? It’s a red flag when DPs want: Important tips:

When we’re building our startup/business, there’s so much to do that we often forget the end game — which for many startups and businesses is to eventually get bought or have an ‘exit’. To do that, you need to build your business a certain way — a way that makes it easy to sell. This usually means the business isn’t dependent on you personally. It can run without you. That’s exactly what the book “Built to Sell” talks about, in a light, story-type way. Highly recommended read: https://builttosell.com/

  1. No clear business model.
  2. [No ads, no “don’t know yet”, no “we’ll gain tons of users and then sell”]
  3. No founder’s agreement.
  4. [Don’t say “we’ll get to it” or “but it’s my best friend”]
  5. Over-protect their idea.
  6. [Don’t ask everyone to sign an NDA before talking — investors and lawyers won’t]
  7. Fall in love with the idea/service.
  8. [It’s not the best idea. They’ve done it before.]
  9. Spend too much time perfecting or worrying.
  10. [“It has to be perfect” — it doesn’t. “What will people think” — they won’t, they’re too busy.]

Hey Everyone Hope you’re all ok! I see cases like the one in the picture all the time: Someone pays a programmer, the programmer stops in the middle or disappears, and the client is stuck! Project is stuck, not enough money to start again, and filing a lawsuit isn’t always worth it (even in small claims court). That’s why I always recommend: 1. If it’s a ‘small project’ (up to a few thousands) = you need an organized price proposal that includes IP transfer, non-compete, how many rounds of revisions (bug fixes), delivery dates, and payment terms. 2. If it’s a medium project (a few thousand up to about 25k) = you need an organized price proposal (see above) + a formal IP waiver/rights transfer document (which protects your IP). 3. If it’s a large project (25k and up), = you need a full Software Development Agreement. In any case, here are a few super important things you should always do: 👉 Get recommendations before closing with anyone. 👉 Payment plan: always pay about 20% less than the work done. Obviously you need to be fair to the developer (I represent a lot of them!), but it’s fine spreading the payments based on progress. 👉 Ownership: make sure that you get copies of the code every so often and that YOU own the server account and the domain. 👉 Documentation: Request that the work includes documentation files. This will be a big help if someone else needs to take over later (this isn’t always possible with “Vibe Coding”). Stay Safe!

Good morning everyone 😊 Legal/business tip of the day: Many of my clients say: “I wish I would have known that before I came to you. It would have helped me avoid a lot of mistakes”. And it’s true. Knowing what to avoid or do differently makes a huge difference in your startup journey. The good news: all the information already exists. The challenge: finding the time to learn it. Here’s how you can get the information: 1. Read books (see next message). 2. Listen to lectures / podcasts. 3. Have coffee with experienced founders. 4. Join founder networking groups. 5. ‘Private lessons’ (I offer a 1:1 hour meeting. During the meeting I analyze the startup and the team, and give a summary of the legal (and business) aspects that need to be solved/fixed (I’m sure some other lawyers do this as well). If you don’t have time to read/listen, this is much faster. p.s.: part of the journey is also making mistakes. So when you do make them, don’t be too hard on yourself 😊 💪🏻

When starting a startup, it’s easy to get lost in what to do first. Here’s a logical order:

Step 1: Validate the problem

  • Talk to 10-20 potential customers
  • Confirm they actually have the problem you’re solving
  • Understand how much they’d pay for a solution

Step 2: Build an MVP (Minimum Viable Product)

  • The simplest version that solves the problem
  • Don’t over-engineer it
  • Focus on core functionality only

Step 3: Get initial customers

  • Even if they pay just $100, get REAL customers
  • This validates demand, not just interest
  • Learn from their feedback

Step 4: Improve the product based on feedback

  • Build features customers actually want
  • Not features you think they want

Step 5: Build a sustainable business model

  • Now that you have product-market fit, think about scale
  • Can you build a profitable business?
  • What’s your unit economics?

Step 6: Scale

  • Once you’ve proven the model works, invest in growth
  • Raise capital if needed
  • Build your team

Most failures happen because founders skip steps or do them in the wrong order.

EMPLOYMENT LAW

When you’re building a startup, especially in the early stages, you might think about getting people to work for free as ‘volunteers’.

The short answer: No, startup ‘volunteers’ don’t really exist from a legal perspective.

Here’s why:

In most jurisdictions, if someone is doing work that benefits your business, they’re considered an employee or contractor — regardless of whether you’re paying them or not.

The risks of having unpaid ‘volunteers’:

  1. Labor law violations – You could be liable for unpaid wages, overtime, benefits, etc.
  2. No IP assignment – Without a proper agreement, they might own the work they created
  3. Tax issues – You might owe payroll taxes
  4. Liability – If they get injured, workers’ comp issues arise

What you should do instead:

If someone wants to help:

  1. Pay them something (even a small amount)
  2. Have a clear written agreement stating the relationship, scope of work, and IP ownership
  3. Treat them as either an employee or independent contractor
  4. Follow all labor laws for that classification

The bottom line: Don’t rely on unpaid volunteers. Get proper agreements in place and follow labor laws.

FUNDRAISING / INVESTOR READINESS

When investors do due diligence (DD), one of the first things they check is whether you have a proper founder’s agreement.

Why? Because investors want to know:

  1. That the IP and ownership structure is clear
  2. That there are no disputes between founders that could derail the company
  3. That founders have committed to the company (vesting schedules)

If you DON’T have one: Red flag for investors.

What should be in your founder’s agreement:

  • Equity split and vesting schedule
  • Cliff period
  • Roles and responsibilities
  • Decision-making process
  • What happens if someone leaves
  • Buyout mechanisms

Get this sorted BEFORE raising money.

Investors will check if all intellectual property (code, designs, patents, etc.) is actually owned by the company.

Common issues they find:

  1. Founder created IP before joining the company – it’s not assigned to the company
  2. Freelancers/contractors created code – no IP transfer agreement
  3. Co-founder disputes – unclear who owns what

What you need:

  • IP assignment agreements from all founders
  • IP transfer agreements from all contractors/freelancers
  • Clear documentation of what was created when
  • Patent searches if applicable

Fix this BEFORE raising money.

Investors will request your cap table (capitalization table) – a document showing who owns what percentage of the company.

Common issues:

  1. Unclear ownership percentages
  2. Unissued shares or options not tracked
  3. Options granted but not properly documented
  4. Advisor shares without proper agreements

Your cap table must be:

  • Complete and accurate
  • Up-to-date
  • Properly documented
  • Free of disputes

Get a lawyer to help you create and maintain a clean cap table.

Investors want to see your financial projections – realistic forecasts of revenue, expenses, and profitability.

What they’re looking for:

  1. Revenue model – How will you make money?
  2. Unit economics – How much profit per customer?
  3. Growth projections – How fast will you grow?
  4. Burn rate – How much cash do you burn per month?
  5. Runway – How long until you run out of cash?

Your projections should be:

  • Realistic and based on data
  • Conservative (not overly optimistic)
  • Showing a clear path to profitability
  • Tied to your business model

Prepare these BEFORE fundraising.

A ‘data room’ is where you store all the documents investors will need during due diligence.

What goes in a data room:

  • Cap table and share certificates
  • Founder agreements
  • IP agreements and assignments
  • Employment contracts
  • Customer contracts
  • Supplier agreements
  • Financial statements
  • Board meeting minutes
  • Material contracts
  • Litigation history (if any)

Having a well-organized data room speeds up the funding process and shows you’re professional.

Set this up BEFORE you start fundraising seriously.

A DPP (Deferred Payment Plan) or ‘deferred legal fees’ is when a lawyer agrees to delay payment for legal services until your company has funding or revenue.

How it works:

Instead of paying your lawyer $5,000 upfront, you agree to pay them later when you raise money or have revenue.

Pros:

  1. Preserves your cash in early stages
  2. Lawyer is invested in your success
  3. Good lawyers believe in your startup

Cons:

  1. Legal fees become a debt that needs repayment
  2. Can complicate fundraising if investors see it as a liability
  3. Not all lawyers offer this
  4. Terms need to be crystal clear to avoid disputes

Bottom line: It can work, but be careful about the terms and make sure it’s clearly documented.

SALES

I had a client – let’s call him David – who was selling a B2B SaaS product to enterprises.

His first sale took 18 months.

Here’s what happened:

David met a potential customer at a conference. They showed interest but said they needed to think about it. David followed up every month – no pressure, just checking in.

After 6 months, the customer said ‘not now, maybe next year’.

David kept in touch. He’d send relevant articles, invite them to webinars, ask for feedback.

After 12 months, they said they were considering it but had budget constraints.

David offered flexible payment terms.

After 18 months, they signed. And it was a big deal – $50,000/year contract.

What David did right:

  1. He didn’t give up after rejection
  2. He provided value (articles, insights) without expecting immediate return
  3. He listened to their concerns
  4. He was patient and respectful
  5. He adapted (flexible payment terms)

B2B sales is a marathon, not a sprint. Enterprise deals especially take time. Patience, persistence, and genuine care for the customer are key.

NEGOTIATIONS

Most people think good negotiators are smooth talkers who can convince anyone.

That’s wrong.

The best negotiators know when to shut up.

Here’s why silence is powerful:

When you make an offer and the other person hesitates, most people panic and start talking – offering discounts, sweetening the deal, making excuses.

DON’T.

Stay silent. Let them sit with your offer.

What happens:

  1. They feel pressure to respond (because silence is uncomfortable)
  2. They start negotiating with themselves
  3. They often accept your offer just to break the awkward silence
  4. If they counter, you understand their real position

The rule: After you make an offer or ask a question, STOP TALKING. Wait for them to speak.

This works in salary negotiations, investor terms, contract discussions – anywhere.

Most people fill silence with unnecessary concessions. The one who can sit comfortably in silence usually wins.

Try it in your next negotiation. You’ll be amazed how powerful it is.

MARKETING / VISIBILITY

People are increasingly using AI (ChatGPT, Claude) to find solutions. As a startup founder, you want your product to be recommended when someone asks these AI tools.

Here’s how:

1. Get indexed by AI training data:

  • Make sure your website is public and easily accessible
  • Create high-quality content about your product and what problem it solves
  • Use clear, keyword-rich descriptions

2. Create content AI tools reference:

  • Write blog posts, guides, and documentation
  • Make sure your content answers common questions in your space
  • Link to your product when relevant

3. Get mentioned in reputable places:

  • Product Hunt, Hacker News, indie hacker communities
  • Tech blogs and publications
  • Startup directories and databases

4. Optimize for AI discovery:

  • Create an FAQ page
  • Write clear product descriptions
  • Use structured data (schema.org) on your website

5. Build relationships with AI platforms:

  • Some platforms have plugin ecosystems – consider building one
  • Make your API/product easy to integrate

The bottom line: As AI adoption grows, being discoverable through AI tools is becoming as important as being discoverable through Google. Plan for it now.

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