November 15, 2015

Spotlight on Miami-Dade Legal Aid’s Venture Law Project

Diana C. Acevedo

Miami’s start-up business community is on the rise. In 2014, Dade Legal Aid received a grant from the John S. and James L. Knight Foundation to assist entrepreneurs with issues related to starting a new business. To address this growing trend among clients, Dade Legal Aid formed the Venture Law Project to provide free legal assistance to qualifying start-ups and seed entrepreneurs based in Miami. All business lawyers can support the start-up ecosystem by offering pro bono legal assistance to new entrepreneurs in their communities.

Recent data show that more and more Miami residents are starting their own businesses. According to the Kauffman Index of Startup Activity, Miami ranks as the number two city nationwide with the most start-up activity. The 2015 survey accounted Miami as having a 0.52 percent rate of new entrepreneurs measuring the percentage of the adult population starting a new business each month; 73.90 percent of these entrepreneurs are not coming out of unemployment. The survey also accounted Miami as having a 247.6 start-up density per 100,000 people measuring the number of start-up businesses less than one year old and employing at least one person. The U.S. Census Bureau’s current population survey data is the source for these indicators.

There is great potential for entrepreneurs in Miami, and the Venture Law Project aims to ensure they begin on solid legal footing. Miami offers a high quality of life, a vibrant culture, and an accessible customer base. The cost of living is lower than more popular start-up cities like Palo Alto, New York City, the District of Columbia, and Boston, thus driving more businesses to the region. Because of Miami’s lower burn rate, start-ups in Miami have a longer life span in which to grow and scale. In addition, there is a synergy amongst the local and statewide bar association’s business and intellectual property sections helping Dade Legal Aid to bring a variety of expertise and legal services to this growing population.

Every start-up needs to develop a business and marketing strategy, develop their product, deliver services, hire employees, lease space, and build a website. The best people to advise the upcoming leaders in technology and businesses are those with knowledge and experience. Through the Venture Law Project, entrepreneurs may address a multitude of questions to start their businesses on solid legal footing. At various legal clinics and workshops, pro bono lawyers answer fundamental legal questions that are key for start-ups to succeed and grow: How should the business initially be incorporated? How will ownership of the company be divided? Who is giving and receiving value? What will happen to a founder’s ownership interest if they pass away or get divorced? How can equity be reserved to offer to investors later on? How can an owner be removed? How will decisions be made? What is the exit strategy? Are there any intellectual property concerns?

If a prospective business owner does not have a conversation with a lawyer or receive the proper information, then when the business faces issues between owners or clients, its resolution will cost much more in the long run. When owners fail to plan, many times they plan to fail. Start-ups should not feel like they have no option other than to wait for issues to arise because they find it too expensive to hire a lawyer from the beginning.

The Venture Law Project’s pro bono lawyers play an important role within Miami’s start-up ecosystem. Business lawyers provide information about issues that are likely to arise and help plan wisely for a client’s future needs through a series of innovative workshops and clinics offered at community spaces. Through collaborations with local firms, law schools, and tech hubs, the project helps businesses define their long-term goals and helps them with documents needed to get there. Miami-Dade Legal Aid’s Venture Law Project addresses these concerns and more.

While the Venture Law Project addresses issues for start-ups in Miami for those that are unable to hire an attorney, it is important for lawyers around the globe to get involved with their local legal aid office to address the need for these types of services in their jurisdiction. Business lawyers can participate in legal clinics, speak on panels at workshops, host tech talks at their offices, or serve as mentors to newer attorneys taking start-up cases. By giving back, not only do local start-ups benefit, but the entire business ecosystem and city as a community benefit greatly. We have accomplished a lot in a year and a half, but there is still more work that needs to be done.

Additional Resources

For other materials on this topic, please refer to the following. 

Business Law Section Program Library

Start Smart: What Start-Ups Should Know (and How to Tell Them) about Choice of Entity, Owners’ Agreements, and Funding (PDF) (Audio)
Presented by: Middle Market and Small Business Committee, Private Equity and Venture Capital Committee
Location: 2009 Spring Meeting 

Business Law Basics

Forming LCCs – Using the World’s Best Checklist (Access PDF, Audio, and Video here)
Every deal is different, and for that reason every limited liability company is different. It is incumbent upon the lawyer to be able to reflect that deal in the operating agreement as well as be sure that the operating agreement fills in the gaps in the parties’ express agreement. Our panel, which includes the co-chair and drafters of the Model LLC Operating Agreement Checklist, will explore how the Checklist can assist practitioners in drafting better operating agreements that are consistent and comprehensive.

Diana C. Acevedo

Diana C. Acevedo is a postgraduate fellow at Dade Legal Aid’s Venture Law Project. She is a recent graduate of St. Thomas University School of Law. For more information, please visit www.dadelegalaid.org.