How a thousand dollar contract can cost you half your company

Major developments in the Facebook lawsuit front. Zuckerberg has barely gotten over his troubles with the Winkelvoss twins, and Facebook is now faced with a claim that half of it actually belongs to Paul Ceglia. And all for the grand investment of $1000 back in the day, when Zuckerberg was still developing Facebook.

Whether or not Ceglia’s claim has merit, this is a lesson for every entrepreneur who is serious about their business and expects to make it big. It’s the foundation that you build your company on that could come back to haunt you. What seems to be a throwaway contract when you’re first setting up shop could cost you billions of dollars when you finally make it big.

I’m in a bit of a rush today, so I won’t go into what Zuckerberg should have done, and how contracts are important and why you should consult a lawyer when you first start. Instead, I’ll direct you to the TechCrunch guys who say “Never sell half your company for a thousand dollars.” Amen.

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About Sapna Law

I am a business and technology lawyer and founder of Sapna Law in Toronto, Canada. I work with tech companies at all stages - from start-up to well established, advising on corporate/commercial and technology law issues.
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