26 LAW SOUTH EAST The magic of Isis
Isis Innovation, the University of Oxford’s technology transfer company, runs the Isis Software Incubator helping to commercialise IP and assist fledgling companies. Legal advice has been a crucial enabler of their sustainable, swift growth, and has been important in avoiding the potential pitfalls.
Oxford-based start-up Onfido is an innovative software company offering automated background checks for employers: “a data-driven platform helping you make fast, informed decisions on who you can trust”. Picking up new customers regularly, Onfido is primed for rapid growth.
Not a bad start considering the business was just an idea a year ago. “Business is going well,” says its co-founder Eamon Jubbawy. “We are improving the product and we’ve finished a second round of investment, which means we can really push to the next level.”
Onfido is a case of ambitious, entrepreneurial British talent realising its potential. But part of its success so far is owed to finding the right support and advice early on. Its founders secured the support of the Isis Software Incubator, which has helped it prepare for sustainable growth.
the most important thing we do and put most emphasis on initially,” says Roy Azoulay, who heads the part of Isis that supports software ventures such as Onfido inside the incubator. “We don’t want people to come to us and just refine their business plans.”
Seeking investors too early can be a mistake. “You can spend too much time and effort and really be demoralised by going after investment too early. Try as cost effectively as possible to try to build even a very rudimentary product. Once you’ve got some users saying, ‘yes this is useful’, that’s when you can credibly start engaging with investors.”
Solid foundations Basic legal agreements putting in place the right protections, safeguards and agreements at the start are vital, says Azoulay. “Even though most start-ups will be tight for cash, this is money well spent.”
Jubbawy agrees: “When you have a few co- founders as we do, having legal help in terms of writing up a solid shareholder agreement early can help because things can get complicated further down the line.”
Nicola McConville, Partner
Assistance with office space and marketing was useful, but most important have been the professional insights into starting and running a business. “The advice and support offered by Isis have contributed hugely to our success,” says Jubbawy.
The support the incubator provides is twofold: helping members structure themselves correctly and aiding them in producing a marketable product as soon as possible. It is a focus any would-be start-up would do well to emulate.
“Building something – even if it’s very rudimentary – and taking it to market is
Seemingly mundane procedural considerations such as conducting board meetings are deceptively important, says Jubbawy. “Early- stage companies must document things properly as you can get problems when you revisit agreements later on.”
IP protection and shareholder agreements are shunned by many start-ups for fear of the costs. But this can be a serious mistake, especially given that these are more affordable than often assumed, says Nicola McConville, Partner, Corporate Finance team at Blake Lapthorn.
“It’s easy to see lawyers as an unnecessary expense,” she says, “or to think you won’t need a shareholder agreement because you’re good friends, nothing bad will happen and that everything will be a fantastic success. But what happens in difficult circumstances such as if you can’t agree on key decisions about the company or if somebody leaves to work
Help and advice To discuss any issues raised in this article, contact Edward Lee on 01865 254222 or at
edward.lee@bllaw.co.uk. Nicola McConville can be contacted on 01865 254221 or email her at
nicola.mcconville@
bllaw.co.uk
www.businessmag.co.uk THE BUSINESS MAGAZINE – THAMES VALLEY – OCTOBER 2013 Top legal tips
for start ups Ensure your intellectual property (IP) is where you think it is: Ensure all IP developed prior to the company being formed is transferred or licensed to the company as appropriate.
Don’t underrate the importance of a shareholder agreement: This often throws up areas where shareholders may think they have the same view but don’t. It’s better to sort out key considerations sooner rather than later.
Keep it simple: Complicated agreements and policies are not needed initially. Don’t create more work for the lawyers than they actually need to do.
“What happens in difficult circumstances such as if you can’t agree on key decisions about the company. If you don’t address these questions at the start, you will spend a lot more on lawyers if things go wrong.”
Edward Lee
Partner, Head of Corporate Finance Blake Lapthorn
for a competing company or if somebody went under a bus and left their shares to a distant relative? If you don’t address these questions at the start, you will spend a lot more on lawyers if things go wrong.”
McConville says that start-ups should take advice on matters as diverse as employee share option schemes, general employment matters, commercial contracts and securing visas for overseas academics and researchers.
The right legal partner can bring other benefits. Just a logo of a reputable law firm on your documents can secure the trust of potential partners or investors.
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