How to Make Sure Your Startup Company Will Fail
1. Don’t form an LLC or incorporate. Make sure you and your partner have all the personal liability legally possible.
2. Don’t have any difficult conversations with your partner. Leave important global issues with your partner unaddressed so that you can fight over them later when you have less time and more stress.
3. Agree to decide everything 50/50. Ensure that basic disagreements will lead to virtual deadlocks and increased animosity between you and your partner.
4. Don’t write out your partner agreement. Leave your respective understandings of how the company is to be operated and managed to selective recollection and incomplete facts.
5. Don’t protect your intellectual property. Help ensure that another company can take your ideas and implement them successfully.
6. Don’t create formal employment contracts. Increase the chances your employee will despise you and your company when he or she disputes your vacation policy. Also helpful if you want to incur the transaction costs of hiring and training another employee.
About the Author
Ryan Roberts is a startup lawyer and represents technology companies through all phases of the startup process, including incorporation, seed & venture financings, and exit transactions. Click here to learn more about his practice.
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I was with you until the last one. Although I generally, agree with the substance of the suggestion, the header is completely wrong. In right-to-work states such as Texas, the employer's at-will-employment rights (you can fire anyone for any reason or no reason at all) should not (without really good reason) be abandoned by entering into specific employment contracts with your employees.
That said, you can accomplish the same goal by preparing a policy manual or employee handbook that sets forth things such as your vacation policy, work hours, etc. without creating an "employment contract" (but you'll probably want a lawyer to draft/review it to make sure you don't cross the line into an employment contract).
Open communications about work policies (or the lack of them) go a long way towards maintaining a sense of fairness, which is critical in employee retention.
The underlying message to the whole post is also a good one – don't be cheap when you are building a new company, you'll pay for it later. Establish relationships with professionals (lawyers, accountants, bankers, office suppliers and other vendors) who can help you get off the ground in such a way that you avoid problems down the road.