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Saved my company!
Love Affairs. For a business about to enter into a sales and distribution agreement with a company that could eventually buy you and that has 200 sales employees on the streets right now – each one going to carry with them a whole assortment of your latest product – love is grand. I mean, who needs a lawyer? This is business. Why the formality of an NDA? The company is doing great, we have something entirely unique and the ideas that we have right now are better than anything that anyone has…including the would-be take out partner about to get an exclusive sales and marketing agreement.
What’s that saying? When it sounds too good to be true…. There is a reason you hire a lawyer.
The time to hire a lawyer is now – when its not too late, and not after you have signed the deal. You hire a lawyer when you start your company to form it properly, to document your board meetings and oversee and bullet proof you, your shareholders, and your intellectual property. Failure is always at your door step. As an entrepreneur you already are taking the big risk of your time, talent and treasury. Ego is part of the make up of why you are and will succeed. The shear force of your own effort brings people together and they want to be part of what You are and by You they believe in your company and your product. But this is when you must step back and check your ego at door.
As an entrepreneur you already are taking the big risk of your time, talent and treasury.
It is in this time of your own joy and admiration at your own genius that you must be humble. You need to decide who you really trust before you get to this point. Its like going out on a Thursday night and giving your car keys to someone that you trust, someone who is really on your side and in your corner who is willing to tell you to your face the words “NO.” When you hear it, you must be prepared in advance to hear it and have the plan and if you do hear it – you turn your keys over until you have perspective. You must examine everything, acknowledging that you are at that moment totally and completely incompetent and overcome by the lure, attention, validation and intoxication by the love being showered upon you by your would-be partner.
After this sober self-analysis, you can always can tell your attorney “no” and do the deal anyway. However, this double take, this spot check can save you. Literally it can save you. Then, if you decide to go a head, believe me that your attorney will never say the words “I told you so.” He knows you are the business man. The ultimate decision is yours. Besides, at the point the words could be said, there is no point. You have already questioned your own brilliant decision a billion times. Thus these words will remain unsaid between you and your lawyer unless you bring them up. Whether you do or do not, going through a post-mortem- hopefully having survived the ordeal – is a best practice.
The point is, have your attorney with you, at your side, before you make your pitch. Know your own ego and check it at the door. Your lawyer is a counselor, and must be your most trusted adviser. He is not just someone to ‘PAPER THE DEAL’ and if, that is what he is, then you need a new lawyer.
My personal story is that have been so infatuated and awestruck by an AR financing deal and by the upside of these unlimited funds and the advances that they would make that I never saw the obvious. The fact is, I never even had my trusted attorney look at the paperwork. I signed it. As I did so I signed away all my own control, power, authority and profits. I let my immediate need to “do the deal” cloud my judgment. Daily saved me over a million dollars by manhandling the prior equity group who had promised so much but otherwise failed. Why I entered into another deal with a smaller facility without consulting him has been a very painful lesson.
The above is a real story of a client whose name and company are not disclosed. This is not a story in a vacuum. Rather it is what the Daily Law Group sees all too frequently.
In another clients case all of his marketing advisers said that the company “needed to make this deal.” These same “advisers” are also folks who typically bash lawyers so often that they drive a wedge between the decision maker and their attorney – who should be their most trusted adviser. As an attorney, I recognize that some times my entrepreneur clients simply want to smack me, because I am the person holding up the mirror or saying “on the other hand.” But that ‘other hand’ is the one that the failure to consider could bring the end of the company. As an attorney I want my clients to succeed. My personal philosophy is that having an attorney is an investment and that investments should return profits to you. So that our work is not a cost on your bottom line but results in real assets and added value. In this particular matter, I ended up having to unwind a joint venture. I had to sue to dissolve the company – taking the global thermonuclear war option. But the client did not consult us until they had already made their bed. Having to try and unwind something after its gone on too long sometimes takes an aggressive approach. I liken it to combat. You first take them down to the mat with an arm-bar take down and put your knee on their throat so they cannot breathe. You drive them into submission and then pull your hand out from behind your back with the velvet glove and offer them a gentle hand up, but only through the path that you have decided to go. In this case there were actually chirping crickets in the building from the waste that could have been avoided by getting to us before the venture. This is why the time to hire a lawyer is when your getting into the relationship because only then – through their laser vision do they see the faults and holes that the love affair at the moment has hidden from you.
I liken it to combat. You first take them down to the mat with an arm-bar take down and put your knee on their throat so they cannot breathe. You drive them into submission and then pull your hand out from behind your back with the velvet glove and offer them a gentle hand up, but only through the path that you have decided to go.
An Entrepreneur is already someone who is taking considerable initiative and risk. Avoid adding to this by consulting with experts at Daily Law Group. who do provide conventional wisdom, innovative solutions and expert advice.
Los Angeles Entrepreneurial Attorney
At Daily Law Group, our mission is helping corporations, business owners and investors build successful enterprises. We have vast experience in matters involving high growth entrepreneurial ventures, financing and corporate governance. Our firm also provides advisory services regarding the formation of partnerships and trusts for collective investments by funds, institutions and individuals.
Daily Law Group can assist you in matters involving:
- Asset-based and debt structured financing
- Business entity formation
- Corporate governance issues
- Venture capital and emerging business finance
- Private and public securities offerings
- Development stage financing
- Business acquisitions and due diligence
- International deal structuring and finance
- Other new venture organization and financing issues
To schedule a discussion about your business opportunity, contact Daily Law Group in Costa Mesa, California.
Innovative Counsel and Creative Solutions
Our firm’s experience includes investments in traditional brick-and-mortar operating companies, real estate developments, investment funds and more esoteric investment vehicles. This experience allows our clients to take advantage of creative financing possibilities, including offshore domiciles and structuring.
Irvine venture capital attorney James Daily has more than 20 years of experience as a business law and trial attorney. Mr. Daily has been in the forefront of several high-profile and notable cases, as well as dozens of other transactional and litigation matters. He has been recognized as a Super Lawyer by Law and Politics Magazine. You can depend on Daily Law Group to provide you with sound advice and innovative counsel at any stage of your venture’s development cycle.
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Daily Law Group
600 Anton Blvd., Suite 650
Costa Mesa, CA 92626
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