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Denver Business and Commercial Law Blog

Planning for the worst with a business start-up

Recessionary swings in the economy are an inevitable and unpredictable fact of life, similar to Gulf hurricanes and northeastern snowstorms. Just as with natural disasters, Denver business investors can protect their start-up company assets and future earnings by making plans for the next economic downturn. What works for a business in good times may quickly become a liability, bu there are some ways to prepare for a quick response.

The best time to begin preparing for the worst is when the coffers are flush. One of the actionable goals should be to consider acquisitions or joint ventures that expand current offerings without stepping too far outside the core market. A coffee shop purchasing a similar enterprise makes sense, whereas a move into children's apparel likely introduces too much risk in a recession. Another actionable goal during good times is reducing debt burdens. Paying off a business start-up loan, for instance, will reduce monthly costs by an amount that could become critical in lean times.

Trademark infringement in the information age

Many business owners in Colorado and around the country are finding it increasingly difficult to protect their intellectual property in the information age. Eight out of ten of the senior executives who were surveyed in a poll said that intellectual property infringement was becoming more common, but many of them also said that they were doing little to keep track of or address the problem.

Senior managers and executives are particularly concerned about the long-term damage that trademark infringement can do to brand perception. A flood of cheaply-made counterfeit goods can severely damage reputations for quality and durability that have taken decades to build, and companies associated with luxury and exclusivity may find it difficult to attract customers when inexpensive copies of their products are widely available.

Court mulls Uber motion to force Waymo into arbitration

Colorado residents who are following the development of driverless car technology may be interested in learning about the latest twist in the ongoing litigation between Waymo and Uber over Waymo's driverless car technology. Waymo previously filed a trade secrets and unfair competition lawsuit against Uber. The plaintiff claimed that the defendant and one of Waymo's former employees infringed on Waymo's patented technology and used it in Uber's driverless cars. Uber filed a motion to force Waymo into arbitration and to stay it while related federal patent infringement litigation is proceeding.

The case involves allegations by Waymo that one of its former employees illegally downloaded 14,000 files and then used the information contained in them to start Otto, a company that was a direct competitor of Waymo. That employee now heads Uber's driverless car division. Uber acquired Otto in Aug. 2016 for $680 million.

The details new business owners shouldn't neglect

Colorado residents may choose to start businesses to experience the thrill of being their own bosses. However, there are many details involved with starting a company that some entrepreneurs may overlook, which could reduce their odds of being successful. For instance, business owners may forget to secure the licenses and permits they may be legally required to possess prior to opening their doors to customers. Individuals should be aware that they may have to pay certain fees or dues to become properly certified to run a company.

Regardless of the type of business being formed, it is critical for a person to consider whether there is a market for the services or products he or she is planning to provide. Even if there is a demand for their offerings, potential business owners need to determine if it's the right time in their lives to launch their companies. For instance, those with families may need to consult with their spouses and take into account how starting a business may impact their children.

The current condition of venture capital

Prospective entrepreneurs in Colorado who are seeking business financing may consider using venture capital. They may benefit from learning a few facts about the state of venture capital.

According to PitchBook-Venture Monitor, the last time the number of companies that have received venture capital funding was as low as it is now was in 2011. This is despite the slight jump in the amount of investment funds in the first quarter of 2017 compared to the last three months of 2016.

Venture capital investing in the first quarter of 2017

Colorado entrepreneurs who are interested in funding their businesses using venture capital might be interested in learning that in the first three months of 2017, venture capitalists invested more than $16 billion in nearly 1,800 companies. Of that capital, half of it went to more than 500 companies in California. However, of the companies that did receive venture capital investments in that time, 69 percent were not in California. Companies in Washington D.C. and 46 states all received venture capital investment.

The most popular industries were software and life sciences. More than 900 deals were in these areas. However, software was among the industries that also had the highest number of exits in the same time period. The industries of software, commercial services and biotech made up almost three-quarters of all exits.

Expanding a business into international markets

There are a number of reasons why a Colorado business owner might want to expand into the international market, and one of the biggest is the incredible potential for growth. However, many business owners are intimidated at the idea of this type of expansion, and this is especially true after the uncertainty related to the passage of Brexit.

There are a number of ways that business owners can start selling outside of the United States. One great way to help increase the chances of success is to sell to a number of countries. This spreads out the risk, and if a company's offerings don't catch on in one country, success is still possible in others.

Less venture capital funding for women-led companies

Venture capital funding is essential for many new businesses. However, companies with female founders in Colorado and elsewhere tend to receive much less funding than companies founded by men.

In 2016, companies with all-male founders received $58.2 billion from venture capitalists. In contrast, venture capitalists invested only $1.46 billion in companies helmed by women. The vast difference in the investment amount is on account of the differences in the quantity of deals and the average size of the deal based on gender.

Alphabet asserts third patent claim against Uber

Colorado residents may be aware of the ongoing legal dispute between Alphabet and Uber about self-driving car technology. Alphabet, the parent company of Google, previously filed an intellectual property lawsuit against Uber, and the company has now added a patent claim to its complaint.

Waymo, the self-driving car division of Alphabet, filed the lawsuit. It alleges that a former employee stole 14,000 files of confidential information about technology for detecting light and sensing ranges that is used in autonomous vehicles. In its original complaint, Waymo alleged that Uber infringed on two of its patents. The complaint was amended to add a third patent.

The importance of a business plan for funding in Colorado

A number of individuals who have great ideas for new products never obtain the funding they are seeking. One reason for this may be that they have created workable product plans but not full business plans. In reality, both are essential parts of starting up a successful organization.

Generally speaking, a business plan should tell someone not familiar with a business how it will run, and it will go over a wide range of things. Good plans should cover things like funding, financial projections and business strategies. These plans should also include some information about market competition and how this business' product is better or more attractive than ones made by other organizations.