Startup entrepreneur, did you remember the contracts?

Finnish startups are surprisingly weak at taking care of their contractual issues. Risks are not identified, and even the most important contracts are often not up to par. New online tools can help to make legally binding contracts and accelerate the negotiations.

“If you are engaging in business, get a contract. A written contract. Contracts are the game rules for managing risks and avoiding disputes.”

Partner Markus Myhrberg specializes in contracts for startup companies. He notes that contracts are not made in case of disputes, but to build success. Smart contracts can protect all parties.

That said, it’s surprisingly common for a startup to not have any kind of written contracts regarding partners, labor or customers. It is important especially for growth companies seeking investors to make sure that the basic contracts are in order. Contractual problems can interrupt a company’s take-off.

Negotiating and contracting moves to the cloud

New solutions are being developed to manage contracts. Legal tech and agreement services are sectors that are growing globally – including in Finland.

A Finnish startup has developed a contracting tool to handle the entire lifecycle of contracts online: drafts, submitting, negotiations, signatures, and archiving. Dealsign can be compared to an online bank – but instead of money, it is contracts that are transferred via the cloud.

“Dealsign reduces emails, paper work, and human errors. Our unique asset is negotiating in real-time,” CEO Tero Valkiala compares Dealsign to competitors’ products.

The tool can be used to create unique contractual templates, or templates made by Dealsign’s law firm partners like Lexia can be used.

“Startups can make legally binding contracts with even fewer resources, and they can utilize verified content and facilitate the contractual process.

Clear copyrights

A startup’s contracts are not just small print that no one cares about. They contain mutually agreed rights and responsibilities.

Ambiguous contracts can have regrettable consequences. In the worst cases, if a contact has been made carelessly or if there is no contract at all, the investors disappear or the deal doesn’t happen. A contractual minefield can cripple the whole company’s operations.

“Without a labor or partner agreement, a partner can walk out the door with the intellectual property rights to the technology developed by the company,” Myhrberg notes.