Anyone who has worked in the financial industry will tell you that the old saying about becoming a millionaire is entirely true: The easiest way to make a million dollars is to start with a billion. Unfortunately, most startup founders don't have access to a trust fund of that size—or of any size at all—and they have to find other ways to cover the bare necessities while getting their company off the ground.
If you are an entrepreneur who maintains a day job, you could face serious legal issues down the road – especially if your employer is in the same industry as your startup
Read on for three tips to keep in mind if you are an entrepreneur with a day job:
- Review any documentation you signed when your employer hired you.
If you maintain a day job, any relevant intellectual property you develop could belong to your employer. This is especially true for those who work at technology companies, which typically require all new employees to sign an invention assignment agreement.
According to the Washington Journal of Law, Technology & Arts, such an agreement lays out broad guidelines that give the employer the rights to anything the employee develops that relates to their mutually shared industry. These contracts can even cover anything you create during your free time without the use of your employer's software, hardware, or facilities.
Although an employer is unlikely to assert this right while your startup is small, they may stake a claim to your intellectual property if your company grows and starts making a significant profit. If you signed an invention assignment agreement, it could also hurt your chances of landing potential investors, who will view such an agreement as a red flag.
The best way to protect yourself and your company's future is by reviewing all onboarding documents that you signed upon hiring so you have a thorough understanding of what's at stake
2. Follow up with your employer regarding any initial agreements.
Although there are some employers out there who don't care about their staff's well-being, most bosses are fairly reasonable people who want to see their employees succeed. If it turns out you did sign an agreement that limits your control over your own intellectual property, talk to you employer.
You will have to approach the conversation in a delicate way that does not make it look like you have one foot out the door. Once your boss agrees to amend the current agreement, make sure you get it in writing, and have a business attorney review the new contract.
3. Take the leap as soon as you can.
Even if you maintain full control over your intellectual property, you will not be able to devote as much time as you want to your startup up as long as you have a day job. If family members depend on you for economic support, it may take a while to get to the point where you feel comfortable leaving your day job, but at some point, you are going to have to take the leap.
When you do, a business attorney from Eric D. Anderson Law, Ltd. will be there to guide you every step of the way. Check out Entrepreneur for more tips on maintaining a day job while pursuing your passion, and call 909-283-5494 to discuss your company's logistics with a business lawyer today.