“Entrepreneurs deal with the legal aspects of their businesses on a daily basis, even when they do not realize it.”

The Law Firm of Ekaterina Mouratova, PLLC, headquartered in New York City, USA, is a national and international law firm.

The Law Firm of Ekaterina Mouratova, PLLC offers efficient and expeditious services to individuals and business entities with a forward looking approach to ensure that long-term goals of the clients align with an ever-changing regulatory landscape. In order to find and implement the most beneficial procedures for its clients and to provide exceptional services, Ekaterina often utilizes the combination of knowledge, experience, creativity and innovation.

MO: Where does your passion for helping entrepreneurs come from?

Ekaterina: Before becoming an attorney, I was an entrepreneur myself. I was a CEO of a public corporation engaged in wholesale and retail business. I experienced in practice that law governs all commercial activities and very often the success of an enterprise depends on its owners’ understanding of the applicable statutes and regulations. Entrepreneurs deal with the legal aspects of their businesses on a daily basis, even when they do not realize it. Legal mistakes can doom even the best business concepts. Knowing the playing field, on the other hand, brings clarity, stability, flexibility, and success. It allows market participants to make calculated decisions instead of uneducated guesses and costly mistakes.

Having diverse business experiences myself and interacting with fellow entrepreneurs I formed a strong belief that possession of the right knowledge at the right time makes all the difference between success and failure. Unfortunately, I regularly witnessed business owners spending lots of time, efforts, money and other valuable resources on some matters, only to realize later that they could have avoided all these pains had they known in advance what was actually required for the stability and success of their endeavors. There are always alternative ways of doing things. Being in the know gives us the freedom of choice. Instead of being a prisoner of the situation, we can be the masters of our destiny.

Due to my personal entrepreneurial experience, I was drawn to study business and intellectual property law. It became a passion of mine almost immediately. I saw the degree of protection it can provide and the opportunities it can open up for businesspeople. We do not have to hope for good luck; we can plan on it! My purpose in life has become to help other business owners develop their ventures, protect their rights and interests, and avoid missteps along the way. Having been on the clients’ side of business transactions I understand from the practical perspective what is essential to accomplish business goals of my clients while avoiding the obstacles.

During a course of years I have been representing entrepreneurs and companies in a broad range of industries. I am proud to be able to make tangible contributions into their success and growth. I am happy to be in the position to meet so many amazing, smart, creative, respectable people and work with them towards the accomplishment of mutual goals. I am grateful to my clients for the wonderful experiences we have shared together.

MO: When it comes to intellectual property what are the basics that each startup should know?

Ekaterina: Nowadays intellectual property has become the most valuable business asset. Every year a billion-dollar litigation is happening in the US because of the misappropriation of somebody’s intellectual property. Also, the nature of the intellectual property exclusively owned by a company plays the major role in this company’s valuation for various purposes. There are multiple examples of the startups that were bought for millions of dollars or partnered with major corporations shortly after launching because they possessed valuable patents, copyrights, or trade secrets.

Intellectual property is a very comprehensive body of law and the assistance of an experienced professional is vital to ensure proper protection and exploration of its objectives. Nevertheless, startup founders should know the important basic requirements necessary to protect their own intellectual property and at the same time to avoid infringement of somebody else’s matters.

• Register your trademarks, copyrights, patents, and domain names timely. Computer software falls under the copyright category.

• Execute confidentiality/non-disclosure agreements with all parties who may have access to company’s inner information, including trade secrets and business ideas. It is important to have such agreements signed not only with the employees of the company, but also with independent consultants, prospective partners, investors and all other third parties.

• Install certain safeguards and internal control to ensure that the confidentiality of your business information and practices is continuously maintained.

• The rule of thumb is to know whom you are disclosing your secrets to and disclose them no more broadly than you absolutely have to. Limit disclosure to those on a “need-to-know” basis only.

• Execute intellectual property assignment agreement with every employee and partner in your firm. The law holds that all intellectual property automatically belongs to its creator unless it was “work for hire”. To avoid later arguments what constituted a “work for hire” in your organization it is important to have all people who work on your project to assign in advance to the company the ownership in all work products that may be created during their engagement.

• If a person is leaving your company, execute an exit agreement in which that person acknowledges that he/she was exposed to certain business secrets and that he/she cannot use them in the future for his/her own or third parties benefit.

• When you are hiring somebody whom you know has worked for your competitor, also insert in the employment agreement the clause in which the person acknowledges that he/she cannot bring any intellectual property he/she found out about at his/her prior employment position to your company. It helps to avoid being sued later by your competitor claiming that your company benefited from misappropriation of his trade secrets.

• When you are receiving intellectual property matters from somebody pursuant to a license, assignment or sale agreement, read carefully the terms and conditions of this agreement. All items of the intellectual property can be transferred wholly as well as partially. Make sure you are getting what you bargained for. Then be careful not to come outside the scope of the agreement in your use of the property.

MO: What inspired you to launch the Startup Law Center and what do you hope to accomplish?

Ekaterina: Being a part of entrepreneurial community I regularly meet very smart people with innovative ideas and projects. They are eager to reach the market with their great concepts, but high legal costs may lead them to forgo necessary assistance. Trying to avoid legal fees in the beginning can cause startups to lose a competitive advantage and incur substantial costs and pitfalls later that could be avoided. I know some non-profit organizations that provide free legal help to low-income individuals in simple legal matters. But first of all, such organizations do not cater to the startup community and accordingly, may not be very familiar with the issues faced by the startups and the legal environment in which startups operate; secondly, the selection criteria are very high – they cannot undertake all matters that require legal assistance; and lastly even if some non-profit determines that it can help, most often the person will be put on a long waiting list before his or her needs will be attended. Obviously, the demand is much higher than supply of such services.

I have been thinking for a while that there should be an alternative legal help designed specifically for the startups. There should be some element between the extremely expensive corporate law firms and free non-profits where you have to beat lots of competition and stay in line for months before you can receive an answer to one burning question.

I believe that the development of our society greatly depends on the contributions of its members whether those contributions are in the form of knowledge, information, or work. Nobody should be constrained in his or her development because of the legal or financial obstacles. This is how the Startup Law Center came up. The Center provides affordable legal services necessary to bring innovative ideas from conception to implementation. At our Center we make sure that entrepreneurs start and continue their work on a sound ground and pursue their dreams knowing that their rights and interests are well represented and protected.

The Center reinforces my law firm’s commitment to assist entrepreneurs in their economic and personal growth and it serves multiple purposes:

• To provide startups with high-quality, affordable legal help

• To educate entrepreneurs about legal aspects of their businesses

• To provide resources for the development and growth of the companies

• To create a collaborative environment where members freely interact with each other

Besides providing legal assistance, we regularly conduct free seminars, clinics, and panel discussions that are led by the attorneys as well as by other professionals in order to diversify the experience. We cooperate with various groups and organizations to create interesting events where entrepreneurs can meet with each other, share their passions, ask questions, learn from each other, make business contacts or new friends and otherwise interact in a relaxed atmosphere. During our seminars and legal clinic attendees benefit not only from acquiring new information and skills, but also from meeting like-minded individuals with whom they can later have meaningful relationships. We welcome people with all backgrounds who want to participate in fostering entrepreneurship and empowerment of their fellow citizens.

I expect that the Center will continue to be a valuable resource for the active community of entrepreneurs for many years to come.

MO: What are some of the most common legal issues you see entrepreneurs facing?

Ekaterina:

• Failure to put partnership agreements in writing at the early stage of business development. Then the parties may have different understanding about the scope and meaning of their oral agreements, which often leads to protracted litigation.

• Addressing the management and ownership of intellectual property.

• Engaging in the business activities before forming a separate legal entity, which exposes founders to personal liability for business transactions and most importantly for the actions of their partners.

• Partnering up with somebody without conducting due diligence on a person or company. A new partner may bring unwanted liability with him/her.

• Trying to raise capital and at the same time not to give up the biggest chunk of their company.

• Making various representations without realizing all possible consequences. Oral contracts are enforceable as well as written.

• Soliciting investments from friends, families and other unaccredited investors even when not directly, but just implying it in conversation. This is a violation of securities laws that bring significant civil and criminal penalties.

• Signing contracts without consulting an attorney. Common meaning and legal meaning of the same words may be different depending on the context.

• Failure to execute employment agreements with the people they hire. Employment relationships are governed by both federal and state laws. Non-cooperative employee may become a significant burden for the company exposing it to potential financial losses.

MO: Congratulations on the publication of your unique book – “Business Law for Entrepreneurs. A Legal Guide to Doing Business in the United States.” What do you hope that the average reader walks away with?

Ekaterina: The book is also a result of my passion for the law and my desire to give the benefit of legal consultation to a wider audience than any one particular client.

I wrote this book as a working resource for entrepreneurs, business owners, managers, and other professionals who are involved in business transactions and operations. It can be used by anyone regardless of experience, industry, or size of the business. The book covers a broad range of subjects, including business formation, daily operations, contracts, intellectual property matters, real estate, regulatory compliance and many others. It was prepared to serve as a reference guide in every stage of the business development, from start-up to the further functioning of the company.

For the fraction of the cost of legal consultation the readers can get necessary information anytime. Straightforward presentation of the material, without unnecessary jargon, legalese, or extremely technical details, makes this book easily understandable to people of different educational and professional backgrounds. For the sake of clarity, bullet point lists, detailed explanations and examples are provided. It is important to remember that for very complex, intricate issues, it is advisable to seek the help and counsel of experts.

In addition to the general overview of the legal aspects that may be involved in the process of doing business, the readers will find guidance in undertaking their own future research if it is necessary in their particular situation. After reading this book the entrepreneurs will gain knowledge and confidence in their business endeavors. I hope the book will enable them to:

• Better plan the development of their companies;

• Be certain about their rights and interests;

• Have better relationships with their employees, business partners, and other market participants;

• Concentrate on their business activities without forced interruptions;

• Save valuable resources for higher purposes rather than wasting them on meaningless daily struggles;

• Gain a new perspective on the business and legal world.

The book is available on Amazon, Apple, Barnes & Noble, and Smashwords.

MO: What are your thoughts when it comes to crowdfunding for startups? Is it a viable way secure investment or best avoided?

Ekaterina: I am a strong supporter of crowdfunding. It brought fantastic ideas and unprecedented business concepts to life. However, startup founders should understand its limitations. It may be a good way to get an initial capital injection, let’s say under $100,000, but I doubt it may sustain the company’s development and growth in the long run. I believe that crowdfunding will definitely grow the US economy by making it much easier for entrepreneurs to access initial capital. Considering the present securities regulations and associated cost of compliance it was almost impossible for entrepreneurs and small businesses without substantial financial resources, wealthy family or good connections to raise capital from independent parties. Crowdfunding and the JOBS Act (The Jumpstart Our Business Startups Act), which was signed into law on April 5, 2012, is a good example of the flexibility and adaptation of law to the business realities. Now we are looking forward when the SEC issues its own regulations under the JOBS Act and provide an official guidance for the companies and attorneys.