Table of contents
Part 6 of the Startup Playbook Series.
In part 6 of the Startup Playbook Series, we look at making sure you’re setting yourself up for success while engaging with third-party suppliers.
Building relationships with suppliers
Clarity in the relationships with your suppliers is essential. For example, when you engage a graphic designer to build your logo, will you own that logo once you have paid for it? Will the draftsperson you are using give you a copy of all drafts and plans or just the finished product? Are you hiring the supplier as an independent contractor, or for a specific service contract?
You are creating something of great value. It is important as you grow and scale to protect that value at every stage. By engaging with suppliers clearly, you are able to prove that you own everything you need to run your own show, or take the next steps (to the moooon!)
What’s IP got to do with it?
On the flipside, we cannot stress to you enough how important protecting the value of what you are creating.
Don’t give your service providers room to misuse your confidential information. Be clear on your expectations. As much as possible, only use service providers who will deal with you on an exclusive basis.
Some suppliers will have their own standard terms. That is fine, but be alert to the key clauses to make sure you are getting what you pay for.
Using overseas suppliers and service providers can be more cost-effective, but does add additional layers of risk.
Engaging Suppliers: Checklist
- Who have you engaged to provide services to you?
- What have you paid for all services?
- Will all intellectual property rights and ownership transfer to you?
- Can the service provider use anything that they have made for you?
- Are you using anyone else’s intellectual property in building your products or services?
- What is the process and jurisdiction for dispute resolution?
- Are there any obligations of confidentiality?
- Do you have to provide any of your confidential information or intellectual property to the supplier to provide the services? If so, what happens when they finish providing the services to you?
- Are there any restraints of trade or exclusivity clauses?
Getting the basics down first will help set the groundwork for a long, successful, and meaningful commercial relationship between you and your suppliers.
Read on to Part 7: Intellectual Property.
Get in touch with the Burch&Co Startup & Capital team to discuss how we can help provide clarity in the relationships with your suppliers, and protect your legal interests.