The Columbus Chamber and Capital University have partnered to bring the first business-themed podcast to Columbus. During cbuzz, Columbus-based brand journalist Mikaela Hunt will speak with local business owners, entrepreneurs and community leaders and allow them to tell their story and highlight their organization, while further inspiring the entrepreneurial spirit that is buzzing in the city.
If the recommendations from from Jack Gravelle and Brett Thornton could be summed up in one ultimate piece of advice, it would be talk to a lawyer now, save yourself from potentially bigger (and often more costly!) mistakes later. When building your business, it can be all too easy to inadvertently violate a law without even realizing it.
During the cbuzz podcast, Gravelle and Thornton get down to the details on five of the biggest pitfalls that can affect small- and medium-sized businesses. Get a sneak preview below and listen to the full podcast to find out how each might apply to your business!
Pitfall #1 – Formation Follies
LLC or C Corp? Gravelle and Thornton debate the merits of business formation and how an entrepreneur can decide what’s right for them. (Hint: it will always vary and might change during the lifecycle of your business.) The lawyers also explore the limitations – and benefits – of an S Corp.
Pitfall #2 – Capitalization Catastrophes
Avoiding capitalization catastrophes means having some frank conversations between business partners. That includes being honest about if a business is truly a 50-50 partnership. Gravelle says to think about theories of ownership: how do I get paid when the business makes money? How do I get money if the business sells or dissolves? Ask those questions and it’s easier to have a conversation about capitalization.
Pitfall #3 – Fundraising Mistakes
No, you cannot go out and ask whoever you want, whenever you want, for money. Thornton and Gravelle explain why it’s a no-go – and caution that securities laws are easy to unintentionally violate, leading to bigger problems down the line. Initial investors set the tone – is your business prepared to attract more sophisticated capital in the future? Plus, why you never want to over-promise or omit information. (Think Theranos.)
Pitfall #4 – Leaving Intellectual Property Unprotected
Intellectual property is another example of a facet of your business that’s easy to get right if you talk to a lawyer from the beginning. Does your business have agreements in place with employees AND contractors? Business should protect their IP not just from threats outside the organization, but from within.
Pitfall #5 – Signing off on Third Party Contracts
Just because a deal looks good on paper, doesn’t mean you should blindly sign. From loan agreements to leases, a once-over from a lawyer is never a bad idea. Some tenets of the contract may be unchangeable, but a lawyer can clear up provisions and other onerous terms.
Never miss a cbuzz podcast! Visit the Columbus Chamber website for more great stories and advice from local business owners.
— The Columbus Chamber of Commerce offers news, information and other resources that are free and available to all businesses at columbus.org. —