Bay Area Business Lawyers | Primum Law

Learning Corporate Governance from “Silicon Valley”: A Legal Perspective for Startup Founders

Recently, a client of mine engaged in an insightful discussion about legal matters
surrounding the startup in which he is a founder. The questions he asked were remarkably
thorough, prompting me to delve into what drove his curiosity. To give you a glimpse, he
inquired about whether the company had all the necessary corporate approvals for significant
transactions. This level of interest was a rarity in my legal experience of over two years.

Reflecting on my interactions with founders and entrepreneurs, it became evident that
many often overlook corporate governance and compliance until they encounter a challenging
issue or a negative experience. It’s only then that they start paying attention. However, this
particular client had a different story to share — he had been watching the TV show “Silicon
Valley” and had learned a great deal about the repercussions of the lack of the right corporate
approvals.


This experience illuminated a path for me — a way to assist startup founders in
understanding what aspects they need to focus on to avoid significant mistakes. In the early
stages, most startup founders are fixated on raising capital, with a common belief that money is
the key ingredient to success. It’s hard to argue against the importance of funding. This is
precisely why we educate our clients about the necessary steps to prepare a company for
investments.


Nevertheless, even with cutting-edge technology, adequate funding, and a skilled team,
numerous things can still go wrong. Some of these mishaps can be mitigated by taking
precautionary steps at the outset. This realization inspired me to create a series of posts where we
discuss the long-term consequences of minor errors or omissions during the early stages of a
company — something every founder should be aware of.

Returning to my client and his inquiries about corporate governance, he expressed how
the TV show helped him grasp that his control over the company would shift once he raised a
Series A round. Consequently, his decisions and actions may undergo a more thorough review.
Any mistakes could lead to personal liability and responsibility.

To aid our clients and startup founders in comprehending the legal intricacies of building
a startup, I propose watching this insightful show together. By learning from the mistakes of
others portrayed in the show, we can gain valuable insights into corporate governance, providing
a foundation for legal success in the startup world.

Stay tuned for more posts in this series as we unravel essential legal nuances to empower
startup founders on their entrepreneurial journey.

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