Legal Advisor for startups on legal risk assessment
Focus on legal design approach to support startups with a legal advisor
Interview with a Legal advisor on how to help startups in the legal risk assessment
Let’s meet Alessandro Basile, Legal Advisor and Business Angel.
Alessandro is a New Technologies Legal Advisor (Blockchain, AI, Big and Smart Data), supporting startups and other companies in GDPR and other legal matters.
Hi Alessandro, tell us about yourself and your passion for Law and for new technologies, where did it come from? Can you please tell us more about your professional experience as legal advisor, that led you to take over the role of Managing Director in AB Innovation Consulting?
Law studies and new technologies are passions that I have been pursuing for several years, even if making these passions work together came only after the beginning of my career. In fact, while working in a law firm, I had the pleasure of co-founding two startups thanks to which I understood the startup and investment market, as well as (and above all) the inherent and necessary legal issues for the launch and growth of business projects. Subsequently, I was able to specialize in new technologies, including deep tech, such as artificial intelligence and big/smart data, IoT and blockchain.
The AB Innovation Consulting brand was born after my experience as legal in a firm, first, and partner of a firm in Milan, then. Both experiences have brought an entrepreneurial and managerial awareness that has allowed to qualify the brand as a legal consultancy company (and not only) specialized in the creation, growth and development of new entrepreneurial projects and new technologies.
AB Innovation Consulting is a boutique legal advisory firm specialized in strategic legal consultancy for new technologies and startups in several industries. Can you please tell us more about who are your clients? From which industries and which is their size?
Our customers are, for the most part, startups (from early stage to scale up) that apply technologies that start from simple management/applications, up to the more complex deep tech. In relation to industrial sectors, we don’t have a specific focus, which is positive for 2 aspects:
- we have an elastic and adaptable approach to entrepreneurial and industrial realities,
- we have experience in many industrial sectors, and we can discuss with most of these (fintech, crowdfunding, real estate, reg-tech, energy, digital health is just some of the sectors in which we operate).
The size of our clients is equally variable, in the sense that they may be a team still in the creation phase of the corporate vehicle or more structured companies that have expanded both nationally and internationally.
How do you support your clients? For which matters?
Our customers come to us for two main reasons:
- They need a legal-economic feasibility and structuring of their business model and need a 360° support on the study of applicable regulations, risk assessment and implementation of the first legal documentation.
- They need a specific service and, very often, they come to us for the management of GDPR compliance, data strategy and IT contracts.
We are interested in your passion for the startups world, in which activities do you support them?
Supporting a startup doesn’t only mean being expert consultants in the industrial sector or in the area of expertise (in our case is the legal one). Supporting a startup also means being able to understand its future developments and create a legal structure that can last over time, connect them to the world of private investors and public funds, as well as act as an advisor (whether formal or informal).
You are a legal advisor specialized in IT and New Technologies Law, Privacy Law and Data Protection, all fundamental topics especially for digital Startups, what advice can you give to Startup founders that need to deal with these matters?
Consulting on these matters is essential for two macro-reasons:
- The startup protects itself from its very first moment both to avoid sanctions (often substantial in cases of GDPR) and to be able to better manage internal compliance and towards its users/clients who increasingly ask for explanations on how they are treated and to whom their data are disclosed.
- The startup creates, together with compliance, a legal-economic strategy to be able to better manage its intangible assets, i.e., its database and its software. In the first case (database), the startup will be able to decide how to aggregate the data and which ones to communicate within the limits and spectrum of the regulations, while in the second case it will be able to negotiate the licenses or the sale of the software to monetize under two business lines that converge more and more often.
Why should a startup make a legal risk assessment of the project?
Usually, to explain why, I always start with a reductio ad absurdum (whoever has memories of physics studies will surely remember it). Let’s suppose that the startup doesn’t carry out a legal risk assessment and that it proceeds with its own business, in this case several negative scenarios can occur:
- The startup find itself without contracts or with contracts that protect it little, relationships with customers and suppliers become difficult and there are no protections for the startup that will find itself, irremediably, to renegotiate contracts for greater protection or greater ownership in the event of development, which corresponds to an additional outlay of money.
- The startup is found not to have considered the obligation to comply with a certain legislation and the obligation to obtain certain licenses to act, so the development of the business stops or is limited until the authorization is obtained.
- The startup has not considered the compliance obligations in the reference sector, obviously it will not be compliant with subsequent sanctions which, for a startup, may result in its closure.
- The startup doesn’t protect and extends the protection of its intellectual property, competitors can arrive on the market and take shares without asking for authorizations and giving revenues to the startup.
You are also a Business Angel of Angels4Impact, so we are curious about your activity as a member, can you please share more about it?
Being a Business Angel means always staying informed and updated on the latest events in the startup world, as well as having different skills to be able to evaluate a startup: in particular, the first to be acquired will be business/finance and legal skills both for evaluation and for negotiation of any investment.
Being a member of an investor group means being part of a network of fellow Angels who co-invest with you in one or more moments of your investing career. The “daily” activities, even if we could define them more ordinary as there isn’t much everyday life, are the participation in strategic meetings and startup presentations, as well as potential committees (screening, scientific, etc.) if you are part of them.
Why did you decide to become a Business Angel? What are your goals in this business? What types of companies or startups do you prefer to invest in and why?
The business angel activity is perhaps the most recent one in my professional career, even if I have been carrying it on for more than 2 years now and I have invested in between 5-10 startups as well as 2 club deals, with a total portfolio of 10 other startups.
The goals of each business angel are different, I am interested in the diversification of the investment portfolio when it comes to pure capital in club deals, while an exit when it comes to capital in a single startup. On the other hand, when I make investments that can develop an industrial plan, startups are perceived more as a corporate investment for the realization of commercial development, first, and a possible exit, then.
We know also that your work with investors, as advisor, both when an investment is still in process and after they have invested. Can you please tell us more about this activity?
Working with investors is not as simple as you might think, everyone has their own investment vision and goals that must be understood before starting negotiations or, if you enter later, during the negotiation and editorial part. To give examples, some investors negotiate to take control, while others delegate totally to the startup; some investors want us by their side all the time, while others only call us if they don’t know how to unlock trades.
In any case, my advice is to always have support available during negotiations to match form and substance of the investment.
GDPR is an important topic for companies and startups, but what is your approach when a startup asks for your help? Which is your approach?
It’s very simple: analysis, intervention and monitoring.
The analysis allows you to understand where the startup has the various risks related to the GDPR and how to intervene, as well as to understand how to monetize the database through a legal-economic strategy.
In the intervention phase, I implement the economic-legal strategy together with compliance to be able to proceed with the protection and growth of the startup.
In the monitoring phase, periodic interventions are carried out to constantly assess the adequacy of compliance and, if necessary, intervene.
If you are interested in Business Angel Networks, please read more on: Business Angel Networks: the main ones in Italy