Emerging Businesses and Technologies | Fennemore Craig

Emerging Enrepreneurs

Our business attorneys recognize and appreciate the value of entrepreneurship and innovation, and are committed to providing efficient, straightforward and business-oriented solutions that facilitate success and avoid pitfalls while recognizing early capital is precious and expensive.

Employment Law Considerations

Employees are the heart of any company. Our experienced employment attorneys can provide invaluable advice and assistance to a company in managing its human resources against a backdrop of complicated state and federal employment laws. This assistance includes:

  1. Deciding between employees, temporary workers and independent contractors;
  2. Creating the appropriate employee agreement and/or independent contractor agreement (if needed);
  3. Obtaining an Employer Identification number (EIN) from the U.S. Internal Revenue Service;
  4. Withholding state and federal taxes (W-2, W-4, Arizona Form A-4) from payroll;
  5. Obtaining workers’ compensation insurance;
  6. Arranging for payment of unemployment insurance tax;
  7. Understanding the laws surrounding employee eligibility to work in the United States (Form I-9)
  8. Setting up payroll accounting process, set up record keeping;
  9. Posting required notices in the workplace;
  10. Filing employment-related taxes (quarterly);
  11. Getting organized: set up record keeping; adopt workplace safety practices if necessary; understand employee benefit plans; draft an employee handbook that includes policies necessary to protect the rights of employees and the company; and
  12. Providing immigration support to hire the people needed for the new business, regardless of their citizenship.

Engaging the Market

As an emerging company begins operating, it naturally undertakes various commercial activities, such as selling product, engaging distributors and sales representatives, licensing trademarks and/or technology rights, securing supplier arrangements, hiring consultants, and developing corporate partnerships and collaborations. Each of these actions involves important issues that can dramatically affect the future of an emerging company. Our startup attorneys have the experience and ability to convey a meaningful understanding of the relevant issues and to offer solutions that allow emerging businesses to undertake these activities efficiently, with confidence and without unwittingly losing rights.

Fennemore Craig Venture Accelerator

Our Fennemore Craig Venture Accelerator Program focuses on start-ups by providing access to legal services, as well as helping to launch their enterprises. Through this start-up initiative, we will defer a modest amount of legal fees for those accepted into the program and a small equity investment will be made through a separate fund. We has enlisted Roy Farrow as the program's Business Services Manager. Roy has considerable experience with a similar start-up program which helped launch and support hundreds of growth companies in Silicon Valley and elsewhere. 
 

Litigation

We understand litigation is an expensive proposition that can threaten the limited financial, mental and energy resources of any company, especially an emerging one. However, we also acknowledge that disputes can nevertheless happen and litigation is sometimes unavoidable. Our business litigation attorneys regularly and successfully represent and defend clients in a wide range of commercial disputes, and these business litigators have been selected through the years to argue critical cases that have fundamentally shaped the Southwest. When the need arises, we work closely with clients and our litigation specialists to discern the various option and likelihoods of success, and help assure the vigorous and efficient pursuit of successful resolution.

Protecting Technology, Branding and Other IP

For an emerging business, intellectual property plays an important role – from selecting a name for your company or new product to documenting ownership and controlling disclosure of key information. Failure to take simple steps under the intellectual property laws early on can foreclose later opportunities to obtain important protections. Our intellectual property attorneys have extensive experience in helping our clients select an appropriate strategy for protecting their intellectual property, based on the protection offered and the associated costs.

TRADEMARK LAW AND COPYRIGHT LAW
In today’s world, appropriate branding of products and services is a key consideration for any emerging business and in any industry. A company must ensure not only that it has the right to use the intended name or mark, but that those rights can also be protected nationally and potentially internationally as the market expands. Our copyright and trademark attorneys can assist in analyzing the risks and benefits of possible brands to not only avoid disputes, but to also protect a company's investment by making its advertising and marketing dollars count.

PATENT LAW
For many emerging businesses, the ability to protect their valuable technologies in the marketplace is an absolute requirement in order to attract investment for further growth. Patenting technology can increase its value and ultimately the value of the company. Patents can also provide licensing opportunities and open doors for collaboration and further development. Understanding and pursuing patent protection for new technology requires the advice of experienced patent attorneys with the right industry background. Failure to meet certain requirements of the patent laws can foreclose the opportunity to obtain patent protection. Our attorneys can assist a company in determining if patent protection is right and in meeting the requirements to secure important rights in that technology.

CONFIDENTIALITY AND TRADE SECRETS
Any analysis of the protection of a company's intellectual property should include a discussion of trade secrets. Sometimes a company's technology, and its investment in that technology, is best protected by simply keeping it secret. However, in order to obtain “trade secret” protections for important processes, formulas, techniques or other business or technical information, the law requires certain steps be taken to maintain their confidentiality. Our IP legal services include developing internal business policies and procedures to protect those trade secrets and ensuring that a company can assert and legally enforce its rights, if necessary.

Discussions with potential collaborators, investors, contractors and service providers inevitably require disclosure of confidential information. Appropriate confidentiality agreements prohibiting disclosure of confidential information are important tools for emerging companies. Our intellectual property attorneys can assist developing and appropriately utilizing suitable nondisclosure agreements tailored for a particular company.

Raising Capital

More often than not, neither the entrepreneur’s own funds nor early company revenues (if any) provide sufficient resources to enable necessary investments in people, equipment and working capital. Our finance attorneys assist clients in raising the capital necessary to achieve a venture’s true potential. 

PRIVATE PLACEMENTS 
Because an IPO is obviously not a viable method to raise capital for early-stage companies, it is often necessary to seek investment from private sources. Our startup attorneys have helped many clients over the years raise necessary equity capital through private placements. Even though we maintain a detailed understanding of the intricate rules and requirements applicable in this area (which changed substantially in recent years), our business attorneys know how to break this down into practical guidance clients can actually comprehend and use, and to assist clients in generating the documentation necessary to offer an investment opportunity in compliance with regulatory requirements. 

VENTURE CAPITAL 
For companies in certain high-growth businesses, venture capital may be an appropriate source of capital. Venture capital can be quite complicated and intimidating even for the average practitioner, but our finance attorneys have deep experience with venture capital financings and regularly enjoy helping clients plan, structure, negotiate and close such transactions. Our venture capital legal services include representation of both startup companies and venture capital funds themselves, which enables us to help clients thoroughly understand the distinguishing characteristics likely to attract venture capital investment, as well as the issues likely to dampen such interest. 

COMMERCIAL LOANS 
Many times neither private placements nor venture capital offer an attractive means to raise sufficient capital. Commercial loans can often provide effective and cost-efficient sources of capital. Depending on the particular business and use of capital, various government-sponsored programs are available (through the Small Business Association and others) to help make loans available to companies that might not otherwise qualify. Our finance attorneys frequently assist clients with a wide range of lending transactions, including large and small loans, revolving lines of credit and term loans, as well as secured and unsecured loans.

Securing Space to Operate

Securing space to operate a new or existing business can be an exciting opportunity, but it can be a sizable amount of work and have a significant impact on the bottom line of the company’s operations. Whether the business leases space or purchases the property (which is capital intensive for new businesses), there are many important issues that should be considered. Here are just a few noteworthy items our startup attorneys recommend you consider.

LEASING COMMERCIAL SPACE
Leasing commercial space may provide you with more flexibility than purchasing commercial real property. In most instances, you can lease a small space to begin, and even make arrangements to share common facilities and support staff, then expand your space if growth dictates. In other cases, you may want to lease space in a stand-alone building or a single floor or suite of a larger building.

Whichever type of leasing arrangement you consider, start by taking these steps:

  • Anticipate your needs. Do you expect the business to grow quickly, and will you need space for expansion sooner rather than later? Are you planning to stay as a small operation for the foreseeable future? Or do you desire a high-traffic location for a retail business, with a longer lease to ensure your returning customers can easily find you? Does the business need industrial space that supports light or heavy manufacturing? Does the business simply need executive office space and access to the occasional use of a conference room and support services?
  • Find out the current going rate for commercial space in your area. A commercial real estate broker can be a valuable resource in helping you find the current rate. Doing so will help you better judge whether the rental terms offered by the owner are reasonable and what incentives may be available and currently offered by competing landlords.
  • Consult with a real estate attorney to make sure the lease agreement is going to meet your needs. A commercial real estate attorney will likely identify areas of concern you may not have considered.
  • Once a location has been identified, the parties have negotiated a nonbinding letter of intent and are ready to document the lease agreement, your commercial real estate attorney should be able to assist you in making sure all the important provisions are included in your lease agreement. Generally speaking, a lease agreement should include the following information:
  • The amount of rent, including any planned increases (escalations) and the amount of a deposit or whether you can substitute a letter of credit from your bank
  • The lease beginning and ending date, and any options to renew it
  • What additional services the rent payment includes, such as utilities, janitorial, signage rights or parking rights
  • Who is responsible for maintenance and repairs, taxes, utilities or insurance
  • A full description of the space and a list of any tenant improvements the landlord agrees to make
  • Written confirmation of verbal information given to you, such as any restrictions for competing businesses, the approved zoning and uses, and whether the space complies with local, state and federal requirements (such as the federal Americans with Disabilities Act)
  • Whether you may sublease your space or assign the lease, and how either you or the owner may terminate the lease

OWNING COMMERCIAL SPACE
In some cases, you may find it makes more sense to purchase your place of business. This may be particularly true once your business becomes established and you have a good idea of what your expected growth will be.

  • Purchasing options can vary widely. Small businesses, for example, may be able to purchase a “business condominium” similar to residential condominiums. Other businesses may join together in a co-op or tenant-in-common relationship to purchase commercial real property to cut down on the initial capital requirements generally required. In other cases, an outright purchase of the building may work best for your needs.
  • Before purchasing commercial or retail space, be sure to speak with a real estate attorney. Purchasing business space is much different from purchasing a home; you will likely need someone with expertise to assist you in your acquisition.

Some of the same steps identified above for leasing commercial space are applicable to purchasing commercial real property. You should anticipate your needs and identify a place that will best fit those needs. Understanding commercial real property rates is key to negotiating the right deal. Utilizing a knowledgeable real estate attorneys throughout the acquisition process is essential in what can be a complicated process.

Starting Up

We employ a team-based approach to addressing the needs of companies just starting out, including programs for entrepreneurs. Should the new entity be a simple corporation, an S corporation, an LLC or even a limited partnership? Should the new entity be formed in the state of residence, in Delaware or perhaps in some other state?

Other considerations are also critical at the onset, and our startup attorneys can help with those needs. If multiple owners are involved, it will be important to establish certain agreements among the owners on issues such as transferability of ownership; buyback rights; piggyback and tag-along rights; vesting of ownership over time; and decision-making authority. Thoughtful advanced planning and resolution of these issues are not only important in sidestepping future landmines that can derail any business — large or small — but certainly will be necessary by the time an emerging company expects to take in investments from third parties.