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6 Things Every Entrepreneur Can Learn from Lawyers
Entrepreneurs and lawyers might not appear to be a similar bunch at first glance: entrepreneurs are independent risk-takers who thrive on innovation. Lawyers are studious stalwarts of the law. Despite these differences, the two have much in common. Entrepreneurs, in fact, can learn a lot from their legal counterparts. If you are interested in starting your own business or entering into the business, consider the following lessons that can be learned from attorneys. You might be surprised at how helpful lawyers can be when it comes to providing guidance to aspiring business owners.
Venture Capital Isn’t Free Money
It is often said that you must spend money in order to make money. Many aspiring entrepreneurs have no money to spend, though—so how do you get a business up and off the ground? The answer, for many entrepreneurs, is venture capital. Venture capital is funding raised by investors who then typically charge management fees in order to make a profit. This is paid after the original debt is satisfied. Too many startups, however, achieve funding and spend it frivolously. As any lawyer would advise, this may be a violation of investors’ terms, but more importantly, it is unwise.
Contracts Are Promises
Any entrepreneur who achieves funding through venture capital should be very cognizant of the terms their investors impose. Every lawyer who specializes in contract law knows that contracts are a promise—when you sign one, you are agreeing to the terms contained therein. Pay close attention, then, to exactly what is contained in all of the contracts you sign on behalf of your business. Entrepreneurs such as Chris Sacca—who is both a lawyer and a businessman—know just how important it is to be aware of both the financial and legal implications of a contract.
Relationships Are Everything
Every successful lawyer has achieved success through strategic relationships. The legal profession requires connections and social levity, and it is very similar to entrepreneurship in that way. Chris Sacca has been successful in both industries, though it is the latter that led to his explosive success. After bouncing around early in his career, he landed his first big opportunity when he signed on with Google as head of Special Initiatives. He then became one of the first major investors in Twitter and amassed a net worth of about $500 million. Hot off this success, he capitalized on the relationships he’d developed by establishing Lowercase Capital.
Honesty Is Essential
Honesty is an essential component of any business transaction or relationship. Whether you are managing a small local business or a major corporation, honesty towards your clients and staff is imperative. Lawyers know the value of the truth, too—no matter what, the truth will usually be revealed in court. Similarly, in business, deceptions are typically unwise. It is best to simply be straightforward with your investors and clientele so that your success is not tenuously built on a foundation that could crumble at any minute. Be honest because it is the right thing, and also because it is wise.
Persuasion is Key
Every good lawyer knows the power of persuasion. So does every good entrepreneur. You won’t be able to achieve funding from a venture capital firm unless you are confident and compelling in the case you make for your business. Recruiting investors is not the only reason you need to work on your persuasive skills, though—you also need to focus on honing this skill for use throughout your career. The good news is that entrepreneurs are often so passionate about their projects that persuasion just comes naturally. Whether or not this is the case, focus on developing your persuasive skills.
Investments Pays Off
You might have seen lawyers advertise who do not take any fee from clients until the case is won. This is because a good case is a good investment—when a substantial settlement is potentially available, a lawyer knows that taking a portion of that later is more beneficial that charging smaller fees upfront. It is the same way in business. Venture capital investors want to know that their investment will eventually pay off—and when you demonstrate that it will, they are likely to take the jump and invest. Your investment in your business is the most valuable asset.
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DISCLAIMER: We hope whatever you find on this site is helpful, but be cautioned that it may not apply to your own situation, or be totally current at any given time. Idea Cafe Inc. and all of its current and past experts, sponsors, advertisers, agents, contractors and advisors disclaim all warranties with regard to anything found anywhere on this family of websites, quoted from, or sent from Idea Cafe. and its related sites, publications and companies. We also take no responsibility for comments published by others on these pages.
TRADEMARKS: The following are Registered Trademarks or Servicemarks of DevStart, Inc.: Idea Cafe®, Online Coffee Break®, The Small Business Gathering Place®, Take out Info®, Biz Bar & Grill®, Complaint-O-Meter®, A Fun Approach to Serious Business, CyberSchmooz, and BizCafe.