What you Need to Know About Startup Funding: Learn about how a startup gets the capital it needs to start up.

A lot of startups are known as disruptors because they’re based on innovation, solving problems in new ways or addressing the disadvantages of existing products or creating entirely new categories of goods and services. A startup focuses on rapidly growing market in its niche, and solving user’s problem with its product. More often than not, one of the reasons why ideas are not executed or startups fail among other reasons is lack of funding.

How do you raise money when there is no money on the ground?

What are the available funding mechanisms to startup companies?

Some of the funding mechanisms stated to be available to startup companies are, but not limited to: Bootstrapping, Venture Capital Financing, Angel Investors, Crowdfunding, Loans/Grants, and many others. 

Bootstrapping is the term used to describe a method of funding or starting up a business using nothing but personal financial resources. It is a popular approach for startups who are trying to reduce risk, conserve capital, or gain control of their brand. Energy is expended on the developed product or service itself rather than pitching to investors and other potential sources of capital funding. It can however be a time-consuming and sometimes difficult process, but typically results in greater control of the company and minimized amount of outside debt.

See stories of startups that bootstrapped and became profitable without seeking venture capital.

Venture capital (also called “venture funding”) is money given to startups by private equity firms as the capital they need to grow or expand into new markets. If your startup has potential for long-term growth, you can go to venture capital firms. Venture capital financing is provided not just in financing but also in the form of managerial and/or technical expertise. The goal of venture capital investors is usually to get high return on investment (ROI). Venture capital funding is a great option for startups that are keen on scaling quickly. . Venture capital funding provides valuable information, resources, strategic guidance and technical expertise/assistance to make a business successful.

See this article on Dadaben blog on how venture funds work

Crowdfunding is an adaption of technological disruptions that has come to the forefront in the 21st century. This is when a “crowd” funds a project or business with small donations from many people, rather than one or two major investors. This type of funding mechanism cuts out having to access only professional investors and allows the public to invest in an idea or startup. Crowdfunding also helps to drive engagement to and awareness of the startup. The types of crowdfunding are; donations, debt, rewards and equity.

See examples of crowdfunding sites

Angel investors are individuals with a high net worth that helps startups and small businesses gain financial backing in exchange for equity in the company. These investors can sometimes mean the difference between an idea becoming an empire or never getting off the ground. Because of their entrepreneurial background, they know a good investment opportunity when they see one. They more often than not, have an investor network and can get multiple people to invest. However, an angel investor’s higher risk tolerance may come with the expectation of a high return. 

Picking a funding mechanism for startups basically depends on the size of the startup, its envisaged growth and purpose, as well as weighing the pros and cons of each mechanism. Startup founders should take all this into consideration before opting for a funding mechanism.  

Protecting your Website from Unintended Liability

image source: unsplash.com

Websites, among other reasons are created to inform new and existing clients about the products and services that a company offers as well as create an online presence for a company or organisation. Just like startups, websites are also subject to country-specific laws & regulations. Not adhering to these stipulations could result in legal battles and liabilities. 

Protecting a website from liability could happen pre-launch and post-launch of the website. On the pre-launch, it is imperative that you put certain measures in place such as confidentiality or non-disclosure agreements to protect any idea or business secrets that you may have. 

Typically, websites should have privacy policies detailing how users’ data is going to be collected and processed, as well as the security and/or data protection measures applied by the owner of the website. There should be a conspicuous and intelligible privacy notice on a website in compliance with the provisions of the data protection laws of a country (in Nigeria, it will be the NDPR). The privacy policy should be distinct from a cookies policy, non-contractual in nature, and easy to access and locate.

To protect your website from liability, there should be a disclaimer on the website; as where a person reasonably takes action(s) based on the information provided on a website, the website owner could be held liable. Disclaimers typically relates to refusal to accept responsibility and limit the legal liability of an individual, company or organisation. Disclaimers should be drafted properly to avoid an overkill that would end up destroying the legal liability they were designed to prevent.

The contents on a website are considered to be the intellectual property of the website owner. It is usual that a site owner would put up content on a website, and liability could arise where users of the site infringe on the rights of the owners by copying or distributing the copyrighted work. Users do not have the license to use copyrighted work for their own purposes unless they have the consent of the copyright owner or pay royalties. The owner of the site could also use a software that stops visitors to the page from copying and distributing copyrighted work. Where you purchase an already-established website, you should get an IP assignment agreement with the transfer of ownership of the website. In addition to having a privacy policy on your website, an intellectual property notice should suffice as well.

Another way to protect one’s website from liability is by having a terms of service. A terms of service should be an essential part of a website as it spells out what users must do and not do while using the website. After determining the scope of business for the site, a term of service serves as a form of contract between the owner of the site and the users of the site. Where users defy the terms for use of the website, there should be penalties/remedies reserved for such violations, including and leading to the loss of such user’s account. To have users accept these conditions, a clickwrap should be inserted into the design of the website. This allows the site owner to obtain undoubted acceptance from users when they actively click on something that signifies their acceptance.  

On the post-launch of the website, you should ensure that the privacy policies, cookies policy and terms of use are regularly updated in compliance with the data protection laws regulating the country that you offer your products and services.

Having a website is a great way to reach a large amount of users, and to avoid liability or legal battles, site owners should ensure that they take the aforementioned protections into consideration.

The Workchop Conversation with Sunday Fadipe

The Workchop Conversations is an ongoing series of conversations with different players in both the law, tech & justice tech space, sharing about their work and innovative role within the space, promoting access to justice in Africa.

For this week, we have Sunday Fadipe, Lawyer, Writer & Public speaker share with us what his typical day is like as an in-house lawyer in a fintech company and his favorite hack for staying productive.

Okay, tell us a bit about yourself.

I am a lawyer. I work in a financial technology company. Apart from lawyering, I write on diverse subjects and I like to read non-law books. (whispering) My pen is now dusty though. Surprisingly, I never thought I could work in-house. I thought I was too restless to do in-house and it would be boring.

Well, it is far from boring and financial technology has been a long term interest for me. And I don’t think I was born for that litigation stress. Have you ever had to file a process in Federal High Court in Lagos? Lool. I work with amazing people. That makes it really enjoyable. I also get involved in a lot of high-level transactions and conversations. That cannot be boring

What’s a typical day at work like for you?

On days that I am working remotely, wake up like 9am (please don’t tell my boss). I most times work really late into the night and I am generally not an early sleeper. I wake up to work most times as well. Wake up, say my prayers, take  a few steps to my workspace and fire down. I may not even eat until 1pm, 2pm or later. I have a bad eating habit. I take a few breaks in between, maybe some meetings in between as well and a lot of work calls.

For days that I have to work from the office, I wake up by 6am or 7am. and leave for work by 8am. Work resumes 9am. I work on transaction documents depending on my tasks sheet. Send several emails. Join or host meetings where necessary. Take break to have lunch, throw bants with some of my colleagues, and probably make calls too.

What is that one app that you think should be developed that will make your work easier but you’re surprised it isn’t in existence yet?

I think I have shared this with you before. I was thinking about an idea to make review of documents easier and voila! I found the feature on MS Word. But I’m still trying to refine the idea and maybe we’ll build it as an internal product in my company.

What apps, gadgets or tools can’t you do without?

Currently, my phone, WhatsApp, Cliq, Zoho, Twitter, Google Doc, Adobe Fill & Sign, and my dictionary app.

What is your favorite hack for staying productive?

Taking a lot of short breaks in between my work. 

What are you currently reading, watching or listening to?

I am currently reading ‘Alibaba: The House that Jack Ma Built’ by Duncan Clark and ‘How Successful People Lead’ by John Maxwell. I just finished ‘Stillness is the Key’ by Ryan Holiday. That’s one of my best reads so far. I am not currently listening to or watching anything long term.

Who would you like to answer these questions?

Enyioma Madubuike, my oga

The Workchop Conversation with Themba Mahleka, Co-head at HiiL Southern Africa

The Workchop Conversations is an ongoing series of conversations with different players in both the law, tech & justice tech space, sharing about their work and innovative role within the space, promoting access to justice in Africa.

This week, we have Themba Mahleka, co-head at HiiL Innovation Hub Southern Africa. He is responsible for identifying and supporting legal start-ups whose innovative and/ or technological solutions help improve access to justice. Themba is an attorney by profession and simply passionate about legal tech and innovation. He does not believe that, as attorneys, “the robots are coming to take our jobs”. Instead, legal practice and the delivery of legal services are evolving and in doing so, becoming more accessible. He says that working with HiiL presents a unique opportunity to not only work in legal innovation but to do so for the benefit of those members of society who need access to justice the most.

What is that one idea that shaped how you perceived access to justice through tech?

There are many ideas that have informed my perception, one that stands out is the use of technology as a catalyst for existing solutions. An example of this is Online Dispute Resolution which takes the principles of mediation or arbitration and leverages technology to break down certain geographical or logistical barriers. It has been great to see this in action during the pandemic. 

How do you allocate time for work and other things? How do you deal with distractions?

The truth is I am still figuring this out! I have improved over the years though and being in the moment has helped. Setting goals and focusing on bite-size tasks one at a time, for me, has been more progressive than juggling multiple tasks and not having achieved much at the end of the day. Discipline is key here and that includes the discipline to unplug and recharge your mind and body.

How do you recharge or take a break?

Family. I find taking a walk with my wife and son, going to the dog park, and having dinner at the table (away from technology) as great ways to unwind at the end of the day. I took up boxing at the beginning of the year and this has quickly become one of my favorite things to do.

What is that one advantage of the Innovating Justice Challenge 2021 that you believe justice entrepreneurs must not miss?

HiiL has developed an amazing program with many benefits to offer. One such example is the community. We have found, particularly in Southern Africa, that many justice entrepreneurs feel that the space is so small that they are on the journey alone. Meeting other justice entrepreneurs and being able to tap into HiiL’s global network has resulted in some meaningful and lasting collaborations.

What are you currently reading, watching or listening to?

I am currently reading, “The Corruption Cure: How Citizens & Leaders Can Combat Graft” by Robert I. Rotberg, watching, “Last Chance U: Basketball” and listening to, “Bob Marley: Chant Down Babylon” 

Who would you like to answer these questions?

I’d be interested in hearing from Jackie Nagtegaal.

THE USE CASES OF BLOCKCHAIN IN INTELLECTUAL PROPERTY

A blockchain is a decentralized ledger of transactions that is duplicated and distributed through the blockchain’s entire network of computer systems. The method of protecting intellectual property has become much more simplified since the introduction of this blockchain, which eliminates any doubt on where copyright belongs. All parties involved, including content creators, IP owners, distribution partners, and end users, would benefit. By reducing approval wait times and necessary capital, blockchain has the potential to disrupt the patent and trademark process.


Use cases of Blockchain in Intellectual Property.

  1. Non-fungible tokens, or NFTs: are a critical blockchain-based intellectual property innovation. NFTs are cryptographic tokens that can be used on a blockchain to represent unique properties. Innovators or developers of a piece of work may use blockchain to upload, record, and time-stamp their original work on a public ledger, resulting in undeniable proof of ownership.

2. IP lawyers can use the blockchain to provide proof of first use, creation, and rights management, reducing the number of cases of intellectual property infringement. A lawyer may use the blockchain to set up the terms of sale and license of an IP for his or her client, and the blockchain’s secure, transparent, and immutable features protect the client’s IP rights. Blockchain is one such technology that has the potential to meet the demand for IP protection by providing both security and proof of
ownership for intellectual property. Many businesses have already begun to provide blockchain-based time stamping and authentication systems to protect digital assets.

Case study: TinEye, Binded, Pixsy, and Mediachain – These companies allow the registration of copyrights on the blockchain where they can be monitored.

3. Innovators and content creators may also put their copyrights on a smart contract, which will pay out if certain conditions are met. A smart contract is a Blockchain-based computer program that runs automatically whenever a predetermined condition in a transaction is met. As a Distributed Ledger Technology (DLT), blockchain can be used as a possible platform for inventors to list their inventions/digital works in the form of ledgers with brief descriptions, effectively serving as an IP
marketplace. In addition, inventors/patent holders may use Blockchain to find potential licensees for their inventions’ related know-how.

Case Study: PATENTICO and IPwe – these companies offer a platform where intellectual property funding/distribution could be done.

4. During the lifecycle of digital assets such as patents, copyrights, and publications, there is a need for a technology that allows different copies of digital assets to be linked together. Blockchain technology can be used in systems where users can use blockchain’s ledger technology to connect all versions of their digital assets and potentially use it for asset end-to-end lifecycle maintenance.

Case Study: Bernstein IP – This company offers a public register of every of one’s digital assets.

The use of blockchain would result in significant efficiencies in the management of rights and royalties and the creation of potential capabilities based on a new set of technological principles. Intangible assets are becoming increasingly critical to a company’s value, and performance hinges on the ability to maximize return on investment.