In the startup world, the stages of a company’s development are often referred to as the “seed” stage, the “growth” stage, and later stages such as the “maturity” stage. Each stage has different legal needs and law services for start-up companies can provide specialized support for each phase.
In the seed stage, a start-up company is typically focused on developing its product or service and securing funding from angel investors or private or venture capital firms. Legal services can assist with incorporation, drafting founder agreements and raising seed capital through convertible debt or equity financing.
As the company moves into the growth stage, the focus shifts to scaling the business, building the team and expanding the customer base. Legal services can assist with drafting and negotiating commercial contracts, protecting intellectual property and raising growth capital through series A or B rounds of funding. These rounds of funding may also include different types of shares, such as non-voting shares or shares with limited voting rights, which can be structured and issued with the help of legal services.
In later stages, as the company becomes more established and approaches maturity, legal services can assist with mergers and acquisitions, public offerings and other strategic transactions. Legal services can also help to ensure compliance with regulations and manage the relationship with shareholders, including those with different voting rights.
When establishing different forms of equity-based compensation such as stock options, phantom shares, and employee stock purchase plans, legal advice is also necessary. Startups commonly use equity-based rewards to attract and retain top talent.
Spain has seen recent growth in its entrepreneurial ecosystem, with an increasing number of start-ups being created in the country. The Spanish government has recently implemented a new law, the “Startups Law 28/2022, dated December 21st, which provides significant tax and legal benefits for startup companies. This law aims to promote entrepreneurship and innovation in Spain, by creating a more favorable environment for the creation and development of startup companies. These benefits include tax breaks, legal simplifications, and other incentives that can help startups to grow and succeed in the Spanish market.
