Gil Silberman 🚢
I helped start 300+ tech companies, including 5 unicorns. Yours next?
2y ago
How not to get sued, iii of iv
Gil Silberman 🚢

Ten reasons startups get sued, and one that never happens.

Out of hundreds of startup clients, here are the most common.

  • Collections. Somebody owes someone some money, gotta pay. Includes debts and bankruptcy.

  • Employment. Disgruntled employees claim mistreatment, maybe they have a point.

  • Founder fallouts. A founder quits, leaves, or misbehaves. Litigation ensues.

  • Stock ownership. Just how much stock does everyone own? Gotta be clear on this.

  • Investigations and enforcement. Government regulators claim noncompliance.

  • Customer complaints.

  • Vendor disputes. Vendor didn't perform, files claim when not paid.

  • Trademark names. Somebody stole your name or claims you stole theirs.

  • Patent trolls. If you get too big, somebody wants to claim you stole their technology. Trademark and copyright trolls too.

  • Typical accidents and losses. Negligence and other torts. Something blows up, a toilet overflows, somebody got hurt.

You want a reason nobody ever gets sued in a startup? Letting investors down, and investor remorse. No matter how poorly the startup performs, professional investors realize that you win a few and you lose a few, and chalk it up to experience.

Even if they have a good and righteous case, if a startup screws up so badly that investors want to sue, there is nothing left to sue for.

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