Many founders struggle to delegate

When you land funding for your startup, something pretty wild happens. Your to-do list doesn’t just grow - it multiplies like crazy, and it can feel like it’s exploded overnight.

Suddenly, your job looks a whole lot different. You’re not just the one building your product anymore.

Now you’re juggling hiring new talent, putting together reports for investors, pitching to potential partners, and dealing with all those pesky compliance rules.

Even with all these new responsibilities piling up, many founders insist on doing it all themselves. They hold onto the idea that “No one can do it as well as I can.”

Sure, that might be true to some extent - especially at the start - but it's also why so many founders end up drowning in tasks that they really should have passed off to someone else ages ago.

The Main Challenge

This is especially true when it comes to dealing with legal stuff.

When you’ve just scored some cash, there are some crucial tasks that need to be handed off to people who really know what they’re doing. These include:

- Licenses: Making sure you have all the necessary licenses set up and kept up to date.

- Contracts: Drafting, checking, and finalizing agreements with vendors, partners, and employees.

- Policies: Creating and updating internal policies so you’re compliant with regulations.

- Investor Obligations: Staying on top of your commitments from the investment agreements.

You shouldn’t be trying to tackle these things late at night after a crazy long day. They should be handled by a legal team that knows the ins and outs of your industry.

By doing this, you’ll achieve two key things:

1. Time to Focus on the Business: You get back your time and energy to work on what you’re really meant to be doing—building and growing your business.

2. Legal Protection: You keep your business safe from potential legal troubles that even a hefty funding round can’t fix.

Letting go of some tasks doesn’t mean you’re losing control. In fact, it’s the best way to grow your business without falling apart.

What Every Fintech Founder Should Delegate to Legal After Funding

1. Compliance After Funding

- Filing on Time: Make sure shares and certificates are issued correctly and on time.

- Foreign Fund Rules: Complete Form FC-GPR and report any inbound foreign investments.

- Update Articles of Association: Change the articles when shareholder rights change.

- Know the Consequences: Be aware of the serious penalties for missing compliance deadlines, like potential refunds and fines that could hit ₹2 crore.

2. Ongoing Rules and Licensing

- Getting and Renewing Licenses: Take care of applications and renewals with regulatory bodies like RBI, SEBI, and IRDAI.

- Compliance Audits: Regularly check that you're following KYC, AML, data protection, and operational guidelines.

- Regular Reporting: Make sure you’re sending in reports like Suspicious Transaction Reports (STRs) and Cash Transaction Reports (CTRs) on time.

- Policy Updates: Keep up with changes in fintech regulations and update your policies accordingly.

3. Managing Contracts and Partnerships

- Vendor Contracts: Create and negotiate contracts with vendors and banking partners.

- Customer Agreements: Write and maintain clear terms of service, privacy policies, and service level agreements (SLAs).

- Employment Deals: Make sure employment contracts have solid clauses on intellectual property and confidentiality.

- Partnership Agreements: Set up contracts related to loan sharing, co-lending, and other key partnerships.

4. Investor Relations Legal Stuff

- Follow the Rules: Stick to the governance standards and keep investors’ rights in check.

- Keep Everyone in the Loop: Make sure to meet reporting requirements from investor agreements on a regular basis.

- Handle Anti-Dilution Issues: Look into and manage the numbers around anti-dilution and liquidation situations.

- Define Exit Plans: Clearly lay out exit strategies, like tag-along and drag-along rights, to protect what the investors care about.

5. IP Protection & Data Compliance

- File Your IP: Take care of patents and trademarks and run thorough audits on intellectual property.

- Stick to the DPDP Act 2023: Make sure you're up to speed on compliance with the Data Protection and Digital Personal Data Protection Act.

- Data Safety Across Borders: Set up measures to safeguard data transfers internationally to keep sensitive info secure.

- Cybersecurity Standards: Create legal guidelines and protocols for breaches to meet cybersecurity requirements.

How to Delegate Legal Work Properly

- Match Skills to Tasks: Give legal tasks to the right people based on their special skills, whether it’s regulation, contracts, or IP.

- Outline Expectations and Timelines: Make sure your legal team knows what results to aim for, deadlines, and when you need updates.

- Keep a Watchful Eye: It’s important to oversee the legal process but try not to micromanage; give your team the freedom to work effectively.

The Bottom Line

Once you’re in the post-funding phase, skimping on legal stuff is a bad idea.

The cost of handing off tasks is small compared to:

- The chance of facing big regulatory fines that can hit you hard.

- Losing investor trust because of compliance slip-ups.

- Major business hiccups that can come from regulatory action.

Founders who really grow their businesses aren’t the ones trying to do it all alone.

They understand the importance of delegating and take steps to avoid issues that could jeopardize their business.