JJUA55238U  How to Start a Start-up: the law of start-ups

Volume 2018/2019
Content

This course covers topics in the area of start-up law. The course encompasses both theoretical and practical issues that arise when initiating a start-up. The course takes a student from the moment of an idea, through financing, company formation, growth, challenges of IT and IP protection up to possible successful or unsuccessful exit. The course will provide students with an understanding of the legal and economic considerations and principles involved in counseling early stage companies and their founders and investors. The course is structured in a way to help students understand their role as lawyers for newly established corporations, not only from legal, but also business perspective.

 

The ultimate goal of this course is to arm students with relevant legal knowledge, the ability to apply it, while fostering entrepreneurial skills. Students will be provided with an opportunity to work actively in close cooperation with diverse legal researchers, legal practitioners and entrepreneurs. They will have ample opportunity to develop their knowledge in diverse areas of law, to apply their knowledge throughout the entire course, and to network with the vibrant community of investors, business leaders and entrepreneurial faculty members. Aside from legal competences, students will learn the ability to create, foster and use their networks, create business ideas from scratch and form them into compound legal set ups, advise starting businesses and entrepreneurs while shaping their business and legal infrastructure for a successful enterprise. In other words, students will be able to understand the purpose of a starting business and how to equip it step by step.

 

The curriculum us built on a comparative perspective with a focus on EU and Danish law. The EU issues will be analyzed principally in the areas of intellectual property, securities and tax law. Various national laws will be considered, with the emphasis on jurisdictions of significance to the start-up process. In addition to the legal aspects, the course will also consider the incentive mechanisms and control structures used in each step of the transactions (and alternatives to these structures), with a focus on the both underlying economic and financial theory, as well as on pragmatic considerations in structuring the transactions.

 

Students will develop an understanding of the principal legal and business concepts and issues in the start-up process, and through the use of mock transactions and meetings, they will be asked to draft various types of necessary legal documents. These documents will be later assessed and the best ones will be used at the start-up website – for the purposes of the start-up industry in Denmark and possibly abroad.

 

Students should be familiar with corporate and tax law.

Learning Outcome

Should I incorporate and if so, then how?
In which state or country should I incorporate?
What sort of entity should my company be?
Are my workers employees or independent contractors, what is more beneficial, depending on the type
of a company or the industry?
How do I protect my proprietary information/product(s)?
Is my idea/​product/​process/​business patentable/​copyrightable?
What does/would my patent protect?
Is my company name/logo/brand trade markable?
What are the costs and benefits of getting a patent/​trademark/​copyright?
Do I own the IP my workers create?
How can I own the IP my workers create?
How do I get the necessary financing in different stages of the start-up?
How do I protect the idea from Venture Capitalists?
When is the right time to get a new equity partner?
When and how to sell the company or should I go IPO?

 

Besides the specific legal knowledge, students will be working on different project and will directly advise
start-ups.

This course represents a real opportunity to develop:

  • legal skills (problem-based approach, ability to understand complex legal and financial operations)
  • teamwork and problem-solving skill (students will be required to form groups, assess legal and business decisions, and conceptualize, formulate models and solve the problem as in a real life);
  • counseling skills (ability to advise clients, make a complex legal problem easy to understand and comprehend by a business person);
  • negotiating skills (within mock sessions ability to negotiate the relevant contractual terms for a client)
  • drafting skills (as they will draft several of the start-up and VC deal documents).
  • Armour, J. (2005) Financing Innovation: The Role of Insolvency Law, Working paper (excerpts – 20p)
  • Chien, C (2014) Startups and Patent Trolls, Stanford Technology Law Review, 17, 461-507 (excerpts – 20p)
  • Coyle, JF. & Green, J.M. (2016) Startup Lawyering 2.0, North Carolina Law Review (26 p)
  • Cumming, D. (2010) Venture Capital, Investment Strategies, Structures and Policies, ch. 1, 6, 8 (36 p)
  • Cumming, D. & Johan, S.A. (2014, 2nd ed) Venture Capital and Private Equity Contracting, Ch.4, ch. 5, ch 10, 11 (60 p)
  • Cunningham, W.M. (2012) The Jobs Act, ch. 1, 2 (30 p)
  • Demski, J. (2003), Corporate Conflicts of Interest, Journal of Economic Perspectives, vol. 17, no 2 (21 p)
  • Fama, E. (1980), Agency Problems and the Theory of the Firm, Journal of Political Economy (19 p)
  • Feldman, R. (2015) Patent Demands & Startup Companies: The View from the Venture Capital Community, UC Hastings Research Paper No. 75 (excerpts – 25 p)
  • Fried, J.M. & Ganor, M. (2006) Agency Costs of Venture Capitalist Control in Startups, New York University Law Review, vol. 81, 968 - 1027 (excerpts – 20 p)
  • Gilson, R.J. & Schizer, D.M. (2002) Understanding Venture Capital Structure: A Tax explanation for Convertible Preferred Stock (excerpts – 20 p)
  • Graham, S.J.H. & van Zeebroeck, N. (2014) Comparing Patent Litigation Across Europe: A First Look, Stanford Technology Law Review, 17, 655-708 (excerpts – 18 p)
  • Hansen, J.L. (2013) Response to the European Commission’s Action Plan on Company Law and Corporate Governance in European Company and Financial Law Review, vol. 10 304-327 (19 p)
  • Horváthová, A. Crowdfunding a Prelude to IPO, Oxford Handbook of IPO (22 p )
  • Macey, J. (2008) Corporate Governance: Promises Kept, Promises Broken, Chapter 1, 2 (50p)
  • Morck, R. ed. (2007) A History of Corporate Governance around the World: Family Business Groups to Professional Managers, Germany 223- 238 (15 p)
  • Morse, S.C. (2013) Startup Ltd.: Tax Planning and Initial Incorporation Location, Floridat Tax Review, 14, 319-361 (excerpts, 20 p)
  • Lin. L. (2016) Venture Capital Exits and the Structure of Stock MA Rajan, R.G. & Zingales, L. (2000), The Governance of the New Enterprise, In Corporate Governance: Theoretical and Empirical Perspectives, (Vives, X (ed)), (25 p)
  • Rebérioux, A. (2005), Corporate Governance Adrift: A Critique of Shareholder Value, Cheltenham, ch 2 (27 p)
  • Riis, T. (2016) User-Generated Law: Reconstructing Intellectual Property Law in the Knowledge Socity, excerpts of chapters (30-50 p)
Writing, contract negotiation, presentation, legal advise
Students’ activities will be two-fold. First, during the modules, each student will be working on specific legal documents and agreements, starting with the founders’ agreement, non-disclosure agreements, employment contracts or equity investment agreements, all with focus on start-ups. These contracts will be custom-made for a specific case. However, they will be later anonymized and made open for the greater public. The second type of activity that students will undertake consists of creating a broader, interdisciplinary mapping of a start-up - a real-life scenario during their final workshops. Students will collaborate with start-ups or entrepreneurs, and advise them on structuring their business. In this way, they will directly contribute to economic, cultural or social values. Students will also be free to choose diverse types of start-ups: some might be focusing on technological advancements, whereas others might provide assistance for a migration solution. Ultimately, in their business-mapping, students will be working directly with starting a
start-up, where they will assist in designing the business scenarios and advise on numerous legal issues. Thus, they will provide developing businesses with necessary, and hitherto unaffordable, legal advice. In their endeavors they will be supported by their mentors including Faculty staff.
Written
Oral
Individual
Collective
Continuous feedback during the course of the semester
Feedback by final exam (In addition to the grade)
Peer feedback (Students give each other feedback)
Credit
15 ECTS
Type of assessment
Oral examination, 20 min.
Oral exam based on a synopsis, 20 minutes
Exam registration requirements

In order to attend the oral examination, it is a prerequisite to hand in the synopsis before the specified deadline. The deadline is agreed upon with the course lecturer.

Marking scale
7-point grading scale
Censorship form
External censorship
Exam period

Week 51, 2018 - Monday, Tuesday, Wednesday

Re-exam

Week 5, 2019 - Wednesday, Thursday, Friday

  • Category
  • Hours
  • Seminar
  • 56
  • Preparation
  • 356,5
  • Total
  • 412,5