Preston Byrne, a columnist for CoinDesk’s new opinion section, is a partner in Anderson Kill’s Technology, Media and Distributed Systems Group. He advises software, internet and fintech companies. His biweekly column, “Not Legal Advice,” is a roundup of pertinent legal topics in the crypto space. It is most definitely not legal advice.
This week, we take a slight detour from securities regulation and statutory interpretation into the nitty-gritty of running a company in the middle of a global crisis, something which – fundamentally – involves thorny legal problems.
What everyone needs to remember is that the coronavirus outbreak is not the end of the world. It sucks, but when it burns out – as it surely must – life will return to normal and all of the assets will be very, very cheap.
This isn’t the world’s first recession and it won’t be the last. It’s not the world’s first pandemic and it won’t be the last. The key for entrepreneurs is to keep a cool head about you, don’t do anything stupid (if you have never used firearms, for example, now isn’t the time to acquire one and start carrying it while wearing a gas mask on city streets), and adopt a war footing while you steer your companies through choppy waters for 12-18 months.
While the crisis persists, your company will have obligations it is expected to perform. When the crisis recedes and the courts reopen, your company will need to provide an accounting of its obligations and answer for any it has fallen short on in the meantime.
1. Protect your employees
In my opinion, the first job of early-stage founders isn’t to protect their investors, but rather their employees.
Cognizant that the formal legal duty of an officer of a company is to promote the success of the company for the benefit of its members, early-stage firms usually fall into one of two buckets – founder-owned, or founder-and-VC-owned – and the…