Startup Journey


STAGE 1: Ideation

1. Idea

  1. The first step in your Startup Journey is to find the right idea.
  2. Once you have figured out what you want to do, research the market and the opportunities for growth.
  3. The next step is to validate your idea – test your assumptions.
  4. Depending on the outcome of your validation – either continue in the same direction or pivot (pivoting means changing your plan and focusing on different goals;  this can be done at anytime in the Startup Journey). Consider signing an NDA with anyone with whom you share information about your company.

Legal work needed:

  • NDA in order to get feedback from your potential customers.

Cost of NDA: £150 – £750 + VAT

2. Decide on a name and product

  1. Check whether your company name already exists and if it can be registered at Companies House (if you are setting up a company) and trademarked.
    1. There are rules about certain words that can be used as a trademark or company name, so make sure you do this in advance and not when it is too late.

Legal work needed:

  • Search for your preferred company name on the Companies House website.
  • Get in touch with an IP lawyer or trademark attorney to carry out the necessary checks on the availability of the trademarks you plan to register.
    • Decide which countries it is important for you to register your trademark according to where you will be trading, for example, the UK and the EU, or just the UK.

Cost of UK Trademark: £300 – £1200 + VAT + application fees

3. Register your domain

  1. Make sure you own the rights to your chosen domain name(s).
  2. Pick a .com domain preferable.
  3. If your finances allow for it, consider purchasing the co.uk domain and any other domain you believe you will expand into. Not doing so can potentially block expansion and/or prove very costly.

Legal work needed:

  • If the domain is owned by someone else, consider signing an Assignment of Rights Agreement. Alternatively, you can contest domain ownership.

Cost of Assignment of Rights Agreement: £200 – £500 + VAT

4. Find co-founders if needed

  1. If you work with co-founders and intend to share profits in your business in the future, make sure you sign a Shareholders Agreement from the outset of your arrangement.
  2. Even if you aren’t at a stage where you are thinking about shares with your co-founder, it is important to think ahead and set out the terms of your arrangement.
  3. Communicate: This will ensure that expectations are set from the beginning and that all case scenarios are considered. This will, in turn, reduce the risk of future disputes and make any disputes that do arise easier to resolve.

Legal work needed:

  • Shareholder’s Agreement

Cost of Shareholder’s Agreement: £500 – £2500 + VAT

5. Set up your business structure

  1. Consider the most appropriate business structure. Have a look at our guide to compare the different options.
  2. Make sure you research the sector and choose the best structure to match your business and legal needs.
  3. If you decide upon a limited company, you will need to incorporate the company.
  4. Open a bank account.
  5. Accounting is crucial so hiring an accountant from the beginning is really useful.
  6. You may also need to register for VAT. Check this link for more information.

Legal work needed:

  • Company Incorporation; Director’s Service Agreement.

Cost of Company Incorporation: £100 – £200 + VAT
Cost of Director’s Service Agreement: £500 – £2500 + VAT

6. Determine the necessary finances

  1. Draft a business plan.
  2. Consider wages, office space, marketing costs, product building costs, travel costs and more.
  3. Besides your purely business needs, you should also plan a budget for legal expenses.

Legal work needed:

  • Terms and Conditions for provision of services or sale of goods.

Cost of Terms and Conditions: £300 – £2000 + VAT

STAGE 2: MVP

7. Build your MVP

  1. If some or all of the work is carried out by an external workforce (be it freelancers or consultants), make sure you sign IP Assignment Agreements and that you are the owner of all IP that is created during the assignment.
  2. Website: If you’re a  tech startup, your MVP will likely be your website/app.
  3. If you are a hardware business or you are selling a product, you will likely still build a website.

Legal work needed:

  • Terms and Conditions for your website
  • Privacy Policy
  • Cookie Policy

Cost of T&Cs for Website: £150 – £1000 + VAT
Cost of Privacy Policy: £100 – £500 + VAT
Cost of Cookie Policy: £50 – £450 + VAT
Cost of Social Media Policy
Register with IPO

8. Protect your ideas – Intellectual Property Protection

  1. Patents – if your product is innovative and patentable, you can benefit greatly from registering it as a patent.
  2. Trademark – protect your company’s logo or brand image and name.
  3. Copyright – any original content created by you automatically qualifies as copyright protected, but you will need your employees to assign copyright in anything they create while working for your startup.
  4. Design – protect your design rights.

Legal work needed:

  • Consider signing a Copyright Assignment Agreement
  • Trademark your name and logo
  • Also, consider whether you want to register a national or European trademark
  • Patent registration

Cost of Copyright Assignment Agreement: £150 – £250 + VAT
Cost of European Trademark Registration: £450 – £1800 + VAT + Filing fees
Cost of Patent Registration in the UK: £1500 – £5000 + VAT

9. Start operating / selling

  1. In order to start selling your products or services to the public, you need to have a set of standard terms of business, in case you do not negotiate every single contract separately.
  2. If you sell to large numbers of consumers, T&C’s are the best way to protect both your business and your customers.

Legal work needed:

  • Terms and Conditions for Sale of Goods and/or Provision of Services.

Cost of Terms and Conditions: £300 – £2000 + VAT

10. Measure customer or user response and learn from it

  1. Adapt all your contracts to the changes you’ve made.
  2. Ensure your contracts are reviewed regularly or at least every time you pivot.
  3. Ensure that your contracts remain compliant with changing laws by discussing this with your lawyer on a regular basis or ask them to notify you of any changes in the law which affect your business.

Legal work needed:

  • Periodical consultations with a lawyer to review your contracts.

Cost of a legal consultation: Free – £300 + VAT
Contract Review: £150 – £500 + VAT

In 2015, startup creation in the UK increased by 4.6%.

STAGE 3: Seed Stage

11. Attract investment if needed

  1. Consider consulting a legal adviser on the legal implications of attracting funding.
  2. Make sure you comply with all legal requirements before applying for funding.
  3. If based in the UK, consider the SEIS and EIS schemes, which provide tax incentives for investors.
  4. If you are eligible for either scheme, you increase your chances of attracting investment.

Legal work needed:

  • Consult a lawyer specialised in investment issues.
  • SEIS and EIS scheme preparation and application.
  • Consult a lawyer to perform due diligence.

Cost of EIS/SEIS Application: £400 – £1000 + VAT

11b. Seed money

  1. Seed money is a form of securities offering in which an investor invests capital in exchange for an equity stake in the company.
  2. The funding can be used for market research, to build the product and a team, or to target your market audience until you make money or you are ready for another investment round. (FF&F, Angel funding, Crowdfunding).
  3. A typical seed round can be anywhere between £50,000-£2m round.

Typical uses of seed funding:

  • Product Identification
  • Marketplace Orientation
  • Demographic
  • Team Creation

Legal work needed:

  • Letter of Intent
  • Term Sheet
  • Investment Agreement

Cost of Letter of Intent: Free – £150 + VAT
Cost of Term Sheet: £150 – £800 + VAT
Cost of Investment Agreement: £300 – £1500 + VAT

12. Build your workforce

  1. You need to sign Employment Contracts with all of your employees.
  2. As an employer, you have a number of responsibilities and requirements you need to meet in order not to get sanctioned and employing people has tax implications for your business.
  3. You also need agreements with people who are not technically employees, such as consultants and freelancers.

Legal work needed:

  • Employment Contracts
  • Consultancy Agreements
  • Staff Handbook

Cost of Employment Contract: £350 – £1500 + VAT
Cost of Consultancy Agreement: £350 – £1200 + VAT
Cost of Staff Handbook: £350 – £1500 + VAT

13. Build your working space

  1. Renting office space is related to signing a Lease Agreement.
  2. You will also most probably need to use the services of a surveyor.
  3. Alternatively, you can find a co-working space which may be more flexible.
  4. Purchase equipment.
  5. You can benefit from certain VAT and tax returns of the items you buy for work. Make sure you discuss this with your accountant in order to benefit from tax exemptions.

Legal work needed:

  • Drafting and/or review of lease agreements.

Cost of Commercial Lease: £750 – £1500 + VAT
Tax Credits

“Entrepreneurship is a personal endeavour and there
will always be risk and uncertainties.”

– Matt Smith

STAGE 4: Series A

14. Series A funding

  1. After proving that your product is gaining traction, Series A funding can be raised to optimise the product and user base.
  2. You can raise around £2m-£15m and will generally use this money to expand and scale your business.
  3. Typical investors are venture capitalists (VCs) and angel investors.

Typical uses of Series A Funding:

  • Optimisation
  • New Markets

Legal work needed:

  • Letter of Intent
  • Term Sheet
  • Investment Agreement

Cost of Letter of Intent: Free – £150 + VAT
Cost of Term Sheet: £150 – £800 + VAT
Cost of Investment Agreement: £500 – £1500 + VAT

15. Find partners

  1. When discussing your ideas or business model, make sure you have the other parties sign NDA’s to protect your information.
  2. You should also make sure you formalise your partnership by signing a Partnership Agreement.

Legal work needed:

  • Partnership Agreements

Cost of Partnership Agreement: £500 – £1500 + VAT

STAGE 5: Scale-up

16. Series B funding

  1. B is for building. Now that you have proved that your startup may be successful it’s time to expand your team and develop a winning product.
  2. Talent acquisition, sales, market research, advertising, support, etc.
  3. Series B funding can be £7m-£10m depending on evaluation.

Purpose of Series B funding:

  • Team Building
  • Business Development

Legal work needed:

  • Letter of Intent
  • Term Sheet
  • Investment Agreement

Cost of Letter of Intent: £50 – £150 + VAT
Cost of Term Sheet: £300 – £1,000 + VAT
Cost of Investment Agreement: £600 – £1800 + VAT

17. Scale

  1. Your business is growing.
  2. Consider expanding to new countries or worldwide, or an IPO (initial public offering) to become a public company where other people can trade your shares.

Legal work needed:

  • Lawyer consultation
  • Review of international trade agreements

Cost of Legal work for IPO: From £5000 + VAT

STAGE 6: International Expansion

18. Series C funding

  1. Once you have proved that you are successful it’s time to scale.
  2. Series C funding is used to scale in other markets or acquisitions to gain market share.
  3. Series C funding can be between £10m to hundreds of millions.

Purpose of Series B funding:

  • Globalisation
  • Acquisitions
  • Team Expansion

Legal work needed:

  • Letter of Intent
  • Term Sheet
  • Investment Agreement

Cost of Letter of Intent: £100 – £150 + VAT
Cost of Term Sheet: £300 – £1,000 + VAT
Cost of Investment Agreement: £1,000 – £3,000 + VAT

19. Expand internationally

  1. If you’ve reached Series C chances are you are or are almost dominating your market.
  2. Time to look for new places where your business might also be successful. Ask yourself: What are the barriers to international expansion, how much would it cost, and what is the potential gain?
  3. After in-depth research, it will become clear which country(ies) you should be expanding to.

Legal work needed:

  • Lawyer consultation
  • Review of international trade agreements
  • Expand legal team to new jurisdiction

Cross border agreements: From £1,000 + VAT

20. Exit

  1. There are a number of exit options for a startup.
  2. They all require compliant legal frameworks as well as careful due diligence procedures to be executed.
  3. Options for ‘exiting’ include:
    1. acquisitions
    2. mergers
    3. sale of all or part of your shares of the company to a new owner (investor)

Legal work needed:

  • Overall legal compliance
  • Due diligence

Cost of Selling a business: From £3500 + VAT

If you need legal help in any of the stages mentioned above then don’t hesitate to get in touch with us.