by Cynthia Kirkeby
Publishing giant, Bonnier, is getting into the accelerator game in Sweden. They have a call out to interested entrepreneurs to join forces with them. However, according to ArcticStartup, interested entrepreneurs had better keep a close watch on the fine print within this particular accelerator’s contract or they may find themselves loosing their IP. Where is the problem?
ArcticStartup points to Bonnier’s Q & A
Q: Will I own the company if we get that far?
A: How this will work will be settled on a case-by-case basis. We strongly believe in rewarding the entrepreneurs who drive our businesses.
Wow! Imagine quitting your job and working away on a project for months at no pay, or little pay, and then find that the accelerator that you thought was mentoring your project actually owns it. That would not be a very happy surprise. I can’t stress how important it is to have an attorney that you trust read through your contract and explain things to you. Watch out for dilution contracts, where a founder sets up the structure of the company in such a way that the cofounders end up all but diluted out of the company the first or second time that money comes into the startup. Here’s a breakdown on dilution from TechStartupLawyer.
Bonnier is not the first accelerator to put questionable clauses in their contracts, and I’m sure they won’t be the last. Don’t trust attorney’s who are working for the accelerator or a partner. Those attorneys are there to protect the other side, not you. Don’t assume that they are going to be fair or even handed, unfortunately many times, they won’t be. Find someone to read your contract and advise you on whether or not your interests are covered ,and whether there is something completely out of whack.