Most founders treat legal work as something to sort out later, once there's revenue, once there's a raise, once things get serious. Matthew McLeod has spent a lot of time cleaning up after that decision.
Matt is a partner at Dickinson Wright, where he leads the firm's High-Growth Companies Group. Before law, he studied engineering at the Royal Military College of Canada, served as an officer in the Canadian Forces and later held a leadership role at a software company backed by private equity. He's seen companies from the inside as a builder, and from the outside as the lawyer who gets called when something breaks.
We asked him what the bare-minimum legal foundation for a tech startup really looks like, and which "later" problems are actually Day 1 problems.
The mistake he sees most
Matt doesn't hesitate on this one: founders put off the paperwork. He told us he'd already dealt with three disputes in a single year where founders started a business together without proper documentation and later fell out.
"What transpires is a costly fight that could have been avoided for a few hundred dollars."
He understands why it happens. Legal fees feel painful when money is tight, especially for something that doesn't feel essential yet. But the comparison is stark: a small, predictable cost early, or an expensive and unpredictable one later, usually at the worst possible moment.
The minimum foundation
So what should exist before a company goes to market? Matt's list is short and practical:
Share issuances
Director appointments and consents
A shareholder agreement
Documentation for any shareholder loans
Employment agreements
He's a fan of the new wave of online and AI-powered incorporation tools. They're inexpensive and fast. The problem, he says, is when founders stop there and never finish the process. Some ancillary documents can be imperfect early on, but by the time investors arrive, they'll want everything tidied up.
Cap tables versus shareholder agreements
Interestingly, Matt is less worried about a messy cap table than many founders expect. A small number of shareholders across one or two share classes is usually manageable. Investors will want to simplify it, but that's rarely a major hurdle.
A missing shareholder agreement is different. That's where things get ugly. Without one, founders can find themselves unable to deal with a problematic shareholder, stuck with a former employee on the cap table, or facing a deadlock with no agreed way to break it. At that point, he says, the business falls back on the default rules in the statute, and often ends up in litigation.
For founders, that's a useful way to prioritise. If you only have time to fix one thing this month, make it the shareholder agreement.
Check what you're building on
On intellectual property, Matt's advice is refreshingly modest. You don't need to patent everything. But you do need to look.
If your company name or core product is central to the business, it's worth checking whether that name is already taken or the product already exists. He shared the example of a friend who launched a fund, chose a name and then had to rename it a few months later because another fund already used it. In that case the name wasn't existential. For a startup whose brand is its product, it could be.
A few hours of searching before you spend money on branding and marketing is cheap insurance.
"Later" problems that are really Day 1 problems
The most practical part of our conversation was his list of things founders assume can wait:
Put everything in the company. Domains, IP and other assets should be registered to the company, not to individual founders.
Separate the money. Use company bank accounts, not personal ones.
Contract properly with customers. Doing business on boilerplate terms printed on an invoice can leave hidden traps that hurt a young company badly.
None of these are expensive. All of them get harder to unwind the longer you wait.
Getting ready for investors
Before a first serious investor conversation, Matt says the foundation above is the real starting point. Add one more thing: a simple, well-maintained minute book. It signals that the company is run properly and sets the tone for due diligence before the first question is asked.
What we took away
There's a reason this conversation resonated with us. Fello is built on moving fast, and we'd never tell a founder to slow down for the sake of it. But speed only works if the structure underneath can take it. A company with a broken legal foundation tends to shake apart exactly when it starts to go well: at the first big customer, the first raise or the first co-founder disagreement.
Matt's point isn't about red tape. It's about protecting the equity you're working so hard to build, and making sure the company is ready for the day someone wants to invest in it or buy it.
This piece draws on our full conversation with Matthew McLeod. Read the complete interview on the Fello blog.
Interview lightly edited for length and clarity.
