Being in business anywhere in the world can be challenging, but what you do you do when you are in the technology paradise of Silicon Valley? It’s a great place to live and work, but if you aren’t prepared legally whenever you enter into the business realm here, you can very easily be eaten up and spit out. Making sure you are protected when you start your business, as well as compliant is of the utmost importance. In this article, we are going to talk about how to start a successful business in Silicon Valley from a legal standpoint.

Decide Between Patent & Trade Secret Protections

A patent covers new & useful inventions while a trade secret covers valuable and secret information according to the Henry Patent Firm.

Both patent protection and trade secret protection are able to protect your startup’s valuable information, but each of them have their pros and cons. Understanding which one is right for you early on will shape that way that you move forward with your business.

If you choose to go with patent protection, you are able to have a legal monopoly that is awarded by the government to the owner of the patent in exchange for the invention being made available to the public. There is a 20 year limit from the first filing date for a utility patent and 15 years from the issue date for a design patent. Any invention that hopes to qualify must be new, nonobvious and useful.

When you choose to go with trade secret protection, this is to keep information from the public. Basically, a trade secret is a confidential business information protection for information that provides your company with a competitive edge. There is no set protection period like a patent so you can keep it as long as you want.

Be Careful of Public Disclosure

If you do decide that you want to go with patent protection, you need to file for the patent before you tell anyone. This means anyone at all, including friends and family. This is where many startups make a mistake since they want to test the waters and see if the idea is good before they put a patent on it. It is better to get a patent on it and not need it than to need it and not have one.

There are more than an increasingly large number of patent lawsuits that are taking place each year and it is important that you protect yourself as soon as possible.

Make Sure Your Employment Agreements and Clear & In-Depth

Having a good relationship with your employees is important. Being a tech startup, you are vulnerable to technology theft which happens when hiring a competitor’s employee and employee poaching. Making sure that you have a comprehensive and well-drafted employee agreement is key. You should include provisions addressing trade secret protection as well as enforceable non-compete agreements.

Protecting your IP (intellectual property) is key to your success. If you aren’t sure where to start with your employee acquisition, management or any other employee related challenges, you may want to find PEOs in California to help you with your HR issues. Running a startup can be challenging enough when you have a small staff, but as you start to grow, it can be increasingly stressful and can cause you to lose focus on business growth.

There are many codes and compliance issues that have to be dealt with and whether you are new to California or not, these can be confusing and slow down the growth of your business. If you miss one step in the process, it can cause major problems with your startup. Having a PEO company to help you with each of the legal issues will greatly increase your ability to be effective.

The Perfect Location for Your Startup

Making sure that you have the perfect location for your startup is important. Silicon Valley is a hotbed of investors and other tech companies which makes it easier to progress in a place with like minded individuals and plenty of fresh talent that is waiting for you to pick them.

Another thing that any startup needs is plenty of capital. There is a high density of wealthy investors in the area and being able to meet with them to pitch your idea is extremely helpful when you want to bring in the capital that you need for your project.

Make sure that you have proper legal documents drawn up whenever you are working with investors. If you don’t clearly outline the rate of return and expected ROI as well as any other provisions and details, you could find yourself in court. You need to have proper documents that can support you if you do have to go before a judge.


While there is a large number of failures in the startup world, there are also plenty of success stories. Having a proper team in your corner will help you work toward being one of the success stories instead of one of the statistics of failure. You should have a strong legal counsel, proper PEO company to work with and any number of financial and other advisors to keep you pointed on the right path. The more knowledge that you have around your industry and successful businesses as well as businesses that failed, the better you will be able to do.

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