Life after the Aerospace Challenge?
As the New Zealand Aerospace Challenge 2019 final awards draw closer, many of the applicants may be thinking about what to do with their concept or prototype after the Challenge. Having the right legal advice is crucial to commercialisation success.
Local Christchurch law firm Saunders & Co are supporting the Grand Prize Winner and runners up with complimentary legal expertise to help turn their proof of concept into a real-deal business.
Associate Nathaniel Heslop talked us through seven of his legal and business tips for the teams to consider once the Aerospace Challenge is over.
1. Set up the right business structure from the start
Most people think a business is a limited liability company, however, you need to form a limited liability company – it doesn’t just happen! If you do not set up a company you’ll be operating in your personal name, or in a partnership. Setting up the right business structure at the outset can also save significant tax liabilities.
2. Get your team members on the same page and make a plan
Team members’ goals can vary, it is very important to agree what the common goal is and what will happen if someone leaves. What happens if someone walks away, or if they need a salary? Could they leave with all of the shares they received when the company was formed, or will some or all of those shares vest back to the company?
3. Consider how you are going to finance your business
Think about how much capital you may need to bring your concept to market and where (ideally) you would like to obtain that money. Where you raise finance from can impact on how a shareholder agreement /other company documents are prepared. Make sure you understand your exposure to losing assets (personal or business), if things don’t turn out the way you hope.
4. Identify and agree who owns the intellectual property
Understanding who owns the intellectual property is critical to avoid litigation at a later stage. If you are in a multi-person team, who owns the intellectual property? Has anyone developed a product(s) or worked in their own time or from another company? If you have hired a third party app developer have you assigned their intellectual property to your business? Get the intellectual property pinned down right at the start and save yourself the stress later on.
5. Be careful with sharing your concept and ideas
If your company is looking to share propriety information with another company with the intent of potentially forming a joint venture, then it might be appropriate to have a non-disclosure agreement in place. Otherwise, you might risk losing valuable work to a competitor and cause major setbacks in bringing your concept to market – or worse – being beaten to market by a competitor.
6. Have a vision, believe in it, but always look for ways to improve
Believe in yourself and the vision you have for your product or service. Balance technical and business knowledge. Get things done quickly and be aware of what the market wants and what it needs – they’re not always the same! Finally, have a short feedback loop so you can identify mistakes early and often. Monitoring your progress will also help you celebrate achievements and hold your team accountable for continuing to push towards additional goals.
7. Ask for help
Get a great team around you and get the best advice. Don’t cut costs by cutting advisors. They can usually save you more than they cost. Tax and IP are often key areas where costs are cut, and this is often a very expensive mistake.
Saunders & Co are major sponsors of the New Zealand Aerospace Challenge 2019