This week, Ivan Gaviria walks us through the 5 mistakes startups make with their people… A mistake a day.

Ivan is a partner at Gunderson Dettmer’s Silicon Valley office, practicing in the Corporate and Securities Group. He has extensive experience working with startup and emerging growth companies through their entire lifecycle as well as representing venture capital, private equity and other investors.

MISTAKE #1 OF 5: Not understanding obligations to prior employers.

Anyone who has been around the start up business knows that it’s a much smaller community than it initially appears.

Most people in the business will be involved with several startups over the course of a career and top managers like to bring their teams with them to new opportunities.

With all that moving around, there are inevitably issues with former employers that can range from minor irritations to full blown litigation; especially when the ex employee is perceived to be doing something competitive at their new gig.

The key to avoiding problems in this area is all about timing – look at the issues BEFORE you start coding! While California law is relatively favorable to employees when it comes to these matters, employers are not without protection; especially with respect to intellectual property.

If you’re dusting off that invention assignment agreement from your old company to read the fine print AFTER getting the “nastygram” from your prior employer it may be too late for a course correction.

Before you or anyone else starts working on your new company, you should be asking:
* Is he/she still working for someone else?
* Is there any relationship between the business and technology of that former employer and what you propose to do?
* Does that person have any non-solicit or non-compete obligations?
* Has there been an analysis of whether the work the person will be doing will entail their using proprietary information that belongs to a prior employer?

If any of these questions raise red flags, get qualified advice on these issues and be prepared to alter your plans if necessary.

The key is to preserve your ability to make changes or adjustments before you start down a path. The cost of a mistake in this area can be huge as a material dispute over IP ownership can literally render a company unfinanceable.

ABOUT GUNDERSON DETTMER:
Gunderson Dettmer is a leading law firm for entrepreneurs, emerging growth companies and the venture capital firms that support them. With 125 lawyers in four offices – Silicon Valley, Boston, New York, and San Diego – we represent companies in every stage of development from incorporation through entry into public markets and beyond. We provide counsel on general corporate and securities law, mergers and acquisitions, venture capital services, intellectual property, strategic alliances, and tax matters. We combine our experience, industry relationships and expertise to provide practical, business-oriented advice tailored to the needs of the emerging growth company marketplace.