LEGAL ISSUES IN Coworking

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1 LEGAL ISSUES IN Coworking Lessons from Collaborative Entrepreneurship James Creedon, Van Every Creedon PLLC

2 About Us Sharing your entrepreneurial spirit, we re business owners who happen to be lawyers. Van Every Creedon PLLC is a law firm located in Frisco, Texas, which represents companies throughout the United States. From sole proprietors to billion-dollar industry giants, we offer personal attention to each and every client, ensuring their ability to focus their energies on building their ventures. We provide practical solutions based on the law, good business practice, and common sense.

3 Meet Our Team KATHY VAN EVERY JAMES CREEDON Kathy Van Every is the former Vice President and General Counsel for a $2.2 billion defense contractor, but left that role to serve growing businesses as outside general counsel. Kathy s extensive experience in transactional work makes her a vital ally for companies requiring assistance with contracts, licensing, employment issues, government relations, and more. Kathy is a service-disabled Army veteran and continues to work with veterans in the community. James Creedon is an intellectual property attorney who worked with multi-billion dollar clients in New York and Dallas prior to joining Kathy in launching their firm. James focuses on the entire scope of intellectual property and commercial litigation issues, and is a Startup Mentor at The Werx, an entrepreneurship center in McKinney, Texas. James continues to serve in the Army Reserves and is a proud graduate of the U.S. Army Air Assault, Airborne and Ranger Schools.

4 ON COWORKING

5 The Basics 1 What is coworking?...share equipment, ideas, and knowledge. 2 Why do people choose it? Free coffee! And a safe environment to start. 3 Is it common? Yes look at The Depot, Gravitate, and Regus. 4 What are the risks? Depends on how well you listen to this talk.

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9 LEGAL ISSUES

10 Four Risks Within the Coworking Space Informality The collaborative tone can undermine attempts to formalize business structures Amateurishness Casual arrangements can contribute to a lack of rigor in risk assessments The Cocoon Effect Artificially low overhead and subsidies can interfere with business plan development Oversharing Free dialogue and idea sharing can undercut IP value and protections

11 3 Risks Transitioning Out of Coworking Loss of Subsidies Ensure that transitioning companies properly plan for the possible loss of outside financial support Minimize Risk Advising clients of impending risks and strategically planning to avoid them or minimize their effect is the primary value of an experienced attorney. Lack of Structures Establishing certain accounts and business relationships may require formalizing entities and partnerships Loss of Client Base Market conditions may look different outside the space, especially if the client base is primarily connected to coworking

12 Coworking Exit Process Solidify Check-in Decision Analysis Determine the growth strategy and end goal for the team and establish an appropriate business plan Prep Analysis Ensure structures are sufficient for transition: minimum is entity formation, owner agreement, and proper IP protections Transition Analysis Confirm full switch to business-as-abusiness operations: entity as signer, entity as owner, entity as decisionmaker Day 0 Analysis Identify any remaining transition issues and confirm business plan is appropriate for market conditions Day 180 Analysis Confirm business growth strategy and end goal for the entity Day 365 Day -180 Day -365

13 SIMPLIFYING THE COMPLEX SO WHAT TO DO? Recognize that coworking spaces are a vital site for innovating and growing tomorrow s companies, while recalling at all times that the role of the attorney is sometimes to give the difficult news and the challenging advice.

14 Final Thoughts: Role of Attorneys in Coworking Spaces 01 Systems Insight Attorneys have special knowledge on how the system works and should freely share this with growing companies 02 Mentorship Formalizing a relationship with the coworking space permits organized presentations as well as leadership opportunities 03 Peer Introductions Connect companies and talent with each other to help facilitate the very synergy coworking spaces seek 04 Dealmaking Sync investors and institutional influencers with interesting people and exciting new financial prospects

15 VAN EVERY CREEDON PLLC 2595 Dallas Pkwy. Suite 420 Frisco, Texas Contact Us