How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Ash Your Own Question

Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
75100385
Type Your Law Question Here...
Ash is online now

There, I'm looking to invest in a start-up but I'm

Resolved Question:

Hi there, I'm looking to invest in a start-up but I'm worried about the risk that the founders will eventually leave the company and join another company leaving investors hanging. I'm basically concerned that, in the event that the company becomes valuable,
it would be better for a potential acquirer to 'entice' the founders by paying them to jump ship as opposed to paying the price of the entire company he's looking to purchase. Is there a legal way to impose as a condition to invest to tie the founders of a
start-up to the start-up and mitigate this risk? Regards
Submitted: 1 year ago.
Category: Law
Expert:  Ash replied 1 year ago.
Hello my name is ***** ***** I will help you.
Will you be having a Directors or Shareholders agreement please?
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
Ash and other Law Specialists are ready to help you
Customer: replied 1 year ago.
could you please call me today when you have the chance?Thanks
Expert:  Ash replied 1 year ago.
Sure.
alex
Expert:  Ash replied 1 year ago.
Thanks. What you effectively need is a contract with them and a non competition and non disclosure clause in it. This would mean that if they were to leave (which you cant stop them) they can't set up a rival business doing the same thing,
So that is what you need. When you get a Solicitor to draft up the contract, make sure these two key items are in there.
Can I clarify anything for you about this today please?
Alex
Customer: replied 1 year ago.
Thanks for this Alex.
Is there any other way to tie a founder up to his company.
I want to avoid them poaching key staff (2 founders and one employee) too..Thanks
Expert:  Ash replied 1 year ago.
Indeed - sadly there is no other way. You could give them share options so they are less likely to walk away.
Alex
Customer: replied 1 year ago.
Thanks.
Could you please send me an example of legal wording of a non-compete and non-disclosure clause to add it to the contract with the company?
thanks
Expert:  Ash replied 1 year ago.
Just that they will not disclose or use any information gained within the company to set up a rival company directly or indirectly and that they will not set up any business that competes directly or indirectly.
Alex
Customer: replied 1 year ago.
Hi Alex,following up from my last query concerning non-compete clause, the company told me that they have a director service agreement. I've copied the bit which covers the relevant topic below. Is it enough? Thanks20. RESTRICTIVECOVENANTS20.l In order to protect the Confidential Information and business connections of the Company and each to which he has access as a result of the Appointment, the Employee covenants with the Company that he shall not:(a) for 12 months after Termination solicit or endeavour to entice away from the Company the business or custom of a Restricted Customer with a view to providing goods or services to that Restricted Customer in competition with any Restricted Business;(b) for 12 months after Termination be involved with the provision of goods or services to (or otherwise have any business dealings with) any Restricted Customer in the course of any business concern which is in competition with any Restricted Business;(c) for 12 months after Termination solicit or endeavour to entice away from the Company the business or custom of a Restricted Partner with a view to receiving services from that Restricted Partner in competition with any Restricted Business;(d) for 12 months after Termination be involved with a Restricted Partner with a view to having business dealings with that Restricted Partner in competition with any Restricted Business;(e) for 12 months after Termination in the course of any business concern which is in competition with any Restricted Business, offer to employ or engage or otherwise endeavour to entice away from the Company any Restricted Person;(f) for 12 months after Termination in the course of any business concern which is in competition with any Restricted Business,employ or engage or otherwise facilitate the employment or engagement of any Restricted Person, whether or not such person would be in breach of contract as a result of such employment or engagement;
(g) for 12 months after Termination, be involved in any Capacity with any business concern which is (or intends to be) in competition with any Restricted Business;(h) at any time after Termination, represent himself as connected with the Company in any Capacity, other than as a former employee, or use any registered business names or trading names associated with the Company.

What Customers are Saying:

 
 
 
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
< Previous | Next >
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
 
 
 

Meet The Experts:

 
 
 
  • Jo C.

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
< Previous | Next >
  • http://ww2.justanswer.co.uk/uploads/EM/emus/2015-7-7_192327_bigstockportraitofconfidentfemale.64x64.jpg Jo C.'s Avatar

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
  • http://ww2.justanswer.co.uk/uploads/BE/benjones/2015-12-1_0437_ennew.64x64.jpg Ben Jones's Avatar

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    11553
    Qualified Solicitor - Please start your question with 'For Ben Jones'
  • http://ww2.justanswer.co.uk/uploads/BU/Buachaill/2012-5-25_211156_barrister5.64x64.jpg Buachaill's Avatar

    Buachaill

    Barrister

    Satisfied Customers:

    1754
    Barrister 17 years experience
  • http://ww2.justanswer.co.uk/uploads/JO/jojobi/2013-3-19_0265_maxlowryphoto.64x64.jpg Max Lowry's Avatar

    Max Lowry

    Advocate

    Satisfied Customers:

    894
    LLB, 10 years post qualification experience
  • http://ww2.justanswer.co.uk/uploads/UK/UKLawyer/2012-4-12_9849_F2.64x64.jpg UK_Lawyer's Avatar

    UK_Lawyer

    Solicitor

    Satisfied Customers:

    750
    I am a qualified solicitor and an expert in UK law.
  • http://ww2.justanswer.co.uk/uploads/KA/Kasare/kasare.64x64.jpg Kasare's Avatar

    Kasare

    Solicitor

    Satisfied Customers:

    402
    Solicitor, 10 yrs plus experience in civil litigation, employment and family law
  • http://ww2.justanswer.co.uk/uploads/OS/osh/2015-7-7_19268_gettyimagesb.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    8199
    LL.B (Hons), Higher Prof. Dip. Law & Practice