Legal support for start-up projects in Ukraine

What is a strartup?

The term "startup" was first used to describe the beginning of a business, according to the official version, in a 1976 issue of Forbes magazine. It referred to relatively newly created companies.

Since then, the term "startup" has taken on many interpretations. Entrepreneur Eric Ries defines a "startup" as companies that create a new product or service under conditions of high uncertainty. 

As a result, innovation is one of the key characteristics of a startup. Not every new business can be classified as a startu. 

Different types of startups in Ukraine

There's a lot of information out there about the different types, sizes, and life cycles of startups, as well as methodologies for evaluating them by investors and much more. You can classify them by their life cycle stages (Seed, Launch, Scale, Maturity, and their sub-stages), or by industry (such as IT, healthcare, or biotech), or using other classification methods. 

These classifications and other analyses can help you understand startups better and maybe avoid some mistakes that other startup projects have made.   

It is important to understand that a startup, just like any other business or project, has its own: 

• goals – startup founders should understand what goals they are pursuing when launching a startup;

• tasks – as with any other business, it is necessary to set tasks and plan activities, as well as criteria for evaluating performance, in order to respond to challenges in a timely manner;

• results and value – a startup (if it's not just an idea) aims to solve a problem or meet a need;

• financing – every startup needs funding and resources to work. Otherwise, it will remain just an idea or at the pre-seed stage;

• assets and liabilities – one of the main assets of a startup is intellectual property. Make sure that you own the rights to the intellectual property.

If you have come up with something new, or you see someone providing services, but you know that you can do it better and with higher quality – you already have the idea of a startup in your mind. All you need to do now is to make it happen. And that's where we come in. 

Our legal services can help you properly organize and structure your business, optimize costs and taxes, assist in attracting investment, and much more at any stage – from seed to exit.

Legal structure of startup in Ukraine

Every startup in Ukraine needs a legal structure to operate, attract investment, hire employees, and more. Without a legal structure, a startup remains just an "idea" that hasn't been realized.

For example, let's say you have an idea and a development plan, but you need funding, an office space, and employees. At the very least, you need to register a sole proprietorship or a limited liability company (LLC) to start working. 

At this stage, our team will sit down with you and analyze your idea, your goal, and suggest the optimal legal structure for your startup. It could be as simple as registering an LLC, or a combination of several companies. In our practice, we have seen medical startups that use a combination of LLCs and several sole proprietors. Each decision is unique and individual.

Identifying funding sources for a startup in Ukraine

Every startup has its own sources of funding, which depend on the growth stage of the startup. For example, at the Seed stage, one can rely more on personal funds, funds from friends or acquaintances. At the growth stage, investors and creditors will come into play.

It is important not only to find funding, but also to correctly determine the order of its provision and the return of investments. 

How to attract investors for a startup and legally formalize a relationship with them?

To attract investors for your startup and establish a legal relationship with them, it's crucial to have your startup properly structured and be able to pitch it with a clear understanding that it's ready for investment: it has a solid legal structure and opportunities for growth (talent, intellectual property, resources). 

If your startup has issues with intellectual property, disorganized work structure, or ineffective team communication, you're likely to have difficulty securing an investor. Therefore, it's important to plan your work and structure your business properly.

Managing relationships with intellectual property developers for a startup

Intellectual property is a crucial element of any startup, so it's essential for each startup to develop and implement effective mechanisms for managing intellectual property and transferring rights.

There are many ways to do this, such as licensing agreements, non-disclosure agreements, and more. It all depends on your product, idea, the number of people involved in development and implementation, and other factors.

Protection of investor rights and rights of startup founders

Every startup, like any business, has its founders. Often startups are born from teamwork, so it is necessary to regulate: 

• elationships between the founders;
• shares;
• voting rights;
• dividends;
• exit from the startup and buyout of shares;
• dividing spheres of work and other responsibilities. 

For an investor, it is important that the startup is "packaged" and has the potential to realize its plans. Therefore, the attractiveness of the startup depends, among other things, on the degree of regulation of relationships between the founders.

Infrastructure and opportunities for startups

There are many opportunities and a developed infrastructure for startups to grow in Ukraine today. Unfortunately, startups in Ukraine do not have as many opportunities as in some other countries, but there are still technoparks, industrial parks, business incubators, venture capital (although it is very limited), mentors, and various specialists who can help the startup to develop.

Therefore, a startup has basic opportunities to develop, but how it will develop is a question for the founders.

Legal support services for IT startups and other startups in Ukraine

Our company can provide legal support services both to startups in their classic sense, and to projects that do not claim to be innovative, socially oriented, state support and the like.

The scope of work and terms of payment are discussed with the client in advance. After that we sign a legal services agreement. Work begins after receiving full payment or partial payment, if this is stipulated in the terms of the agreement.

We help to properly organize the business, create a legal structure and formalize legal relationships between startups. We also help to set up work with investors, grant programs, and other sources of investment attraction. 

We will help you with intellectual property, information protection and security. We will build high-quality and effective mechanisms of work.  

Standard legal practices - dealing with contracts, personnel and corporate matters - are also on our list of tasks, and we handle them very well. 

We also take care of the following issues for startups in Ukraine:

• Taxes and cost optimization;

• Software rights;

• Corporate structure and startup management; 

• Incubators and Technology Parks, etc. 

Do you want to start a startup in Ukraine safely and profitably? Don’t hesitate to contact us. We will provide you with all necessary legal support at the start of your business.