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.