Top 10 Contract Mistakes That Can Sink Your Startup

As a startup founder, your innovation and vision are key, but the foundation of your company’s success rests on strong legal agreements. Join us for "Top 10 Contract Mistakes That Can Sink Your Startup," a critical session for founders and leaders of early-stage companies. , a partner at and experienced advisor for startups, will guide you through the most common contract missteps that can jeopardize your business—or worse, make your company unfundable.

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Why This Workshop Matters

As your startup grows, you'll be entering into contracts with employees, contractors, vendors, customers, and investors. Unfortunately, many founders unknowingly make serious mistakes in these agreements—errors that can lead to lost intellectual property, legal disputes, compliance issues, and financial mismanagement. These missteps not only threaten your operations but can also send red flags to potential investors and acquirers, making it harder to raise capital or close deals.

Whether it's a poorly structured NDA, vague payment terms, or failing to properly draft your privacy policy, these mistakes can delay your growth or even derail your entire business. Eli Mansour has seen firsthand how these errors can cripple startups. In this session, he’ll break down the Top 10 Contract Mistakes founders make, offering actionable tips to help you avoid these pitfalls and build a stronger, more legally sound company.

Key Contracts and Common Pitfalls to Consider

1. Non-Disclosure Agreements (NDAs)

Do: Customize NDAs to clearly define the scope of confidential information and ensure the protection of your trade secrets.

Don’t: Use vague, overly broad NDAs that may be unenforceable or make potential partners hesitant to engage in deals.

2. Proprietary Information and Inventions Assignment Agreements (PIIAAs)

Do: Have every employee and contractor sign a PIIAA to ensure your startup owns all intellectual property they create.

Don’t: Neglect to secure IP ownership early—failing to do so can result in IP disputes that make your startup less attractive to investors.

3. Licensing Agreements

Do: Clearly define intellectual property ownership, royalties, and usage rights in licensing agreements.

Don’t: Agree to overly restrictive terms that limit your control or growth opportunities, which can make your business less appealing to future investors or acquirers.

4. Employment and Independent Contractor Agreements

Do: Clarify IP ownership, compensation, and the scope of work in all employment and contractor agreements.

Don’t: Rely on informal or verbal agreements, as this can lead to disputes over IP ownership and compensation that raise red flags with investors.

5. Ambiguous Payment Terms

Do: Establish clear payment schedules, penalties for late payments, and consequences for breaches in customer and vendor contracts.

Don’t: Leave payment terms vague. Unclear payment terms can cause cash flow problems and disrupt operations, which can alarm investors.

6. Terms of Use and Privacy Policies

Do: Draft robust, legally compliant terms of use and privacy policies that clearly explain how customer data is collected, stored, and used.

Don’t: Overlook these documents. Failing to address privacy issues can result in fines, lawsuits, and loss of trust from customers and partners. E

nsure your policies comply with GDPR, CCPA, and other relevant regulations.

7. Data Protection and Privacy Terms

Do: Include specific data protection clauses in agreements that address how sensitive data will be secured and used.

Don’t: Ignore privacy and data protection clauses—investors and partners take data security seriously, and lapses can lead to penalties and reputational harm.

8. Intellectual Property Ownership Clauses

Do: Ensure that all contracts with employees, contractors, and consultants clearly state that IP created in the course of their work belongs to the company.

Don’t: Assume IP ownership is implied. Failing to explicitly secure IP rights could result in losing control of critical assets.

9. Partnership Agreements

Do: Clearly define each partner’s roles, responsibilities, and equity stakes to avoid future conflicts.

Don’t: Fail to address what happens if a partner exits or if the business faces financial challenges—this uncertainty is a red flag for potential investors.

10. Software Licensing and SaaS Agreements

Do: Review software licensing agreements to ensure you retain flexibility and control/ownership over key technologies.

Don’t: Enter into long-term exclusive software licenses that could limit your ability to pivot or expand your product offerings and will make your company unfundable.

Why These Mistakes Make Startups Unfundable

Investors don’t just invest in an idea—they invest in companies with sound legal and operational foundations. Contract mistakes, particularly those involving intellectual property, equity, or privacy, can be major deal-breakers. Investors are quick to spot these red flags, and such errors can lead to delays or even the complete collapse of funding opportunities. In this workshop, Eli Mansour will show you how to create well-structured, investor-friendly contracts that protect your startup and make it more attractive to investors, partners, and acquirers.

Don’t miss this opportunity to safeguard your startup’s future and position your company for long-term success.

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