Developing your SaaS platform - are you legal?

Building a scalable SaaS platform isn’t just a technical challenge - it’s a legal one too! In this practical session Hudson Gavin Martin’s Edwin Lim walks SaaS founders through the critical legal considerations that can make or break a platform's success. This session covers everything from IP ownership and third-party licensing to corporate structuring and regulatory compliance, showing founders what 'good' looks like from day one so they can reduce risk and maximise value at raise or exit.

Key themes:

• Who actually cares about your legal setup?
  A common founder mindset: focusing on product development and marketing while treating legal matters as an afterthought. Your customers need assurance through proper terms and conditions. Investors, shareholders and potential acquirers will scrutinise your setup. Regulatory authorities also have oversight on how you handle data, consumer protection and industry-specific compliance.

• Choosing and contracting your cloud provider
  Evaluate providers on security measures, compliance with regulatory requirements, architectural support for your product roadmap across different platforms, service level agreements and availability guarantees, and support responsiveness. 

• Protecting your IP during development
  Whether you're building in-house or contracting a third party, IP ownership must be crystal clear from the start. Edwin stresses the importance of founders assigning their pre-company IP to the business entity once it's established. 

• The third-party content trap
  One of the most common and costly mistakes is the assumption that content freely available on the internet can be freely used. "Just because it's on the internet, it doesn't mean it's free," he warns. Every third-party component requires proper licensing: images, videos, fonts, code libraries, mapping data, APIs and social media integrations. 

• The open source dilemma
  Open source software is widely used because it's fast, efficient, and generally free, but it comes with significant legal implications that are often overlooked. Best practice includes conducting thorough open source audits.

• Crafting effective terms and conditions
  There's no one-size-fits-all approach, says Edwin: your terms must reflect your specific business model, user types and subscription structure. Key provisions should address setup and data migration processes, subscription terms and renewal conditions, access rights, fee structures and payment terms.

• Regulatory compliance essentials
  SaaS platforms must comply with various laws and regulations including the Fair Trading Act, Consumer Guarantees Act, Privacy Act (and GDPR for EU customers), Unsolicited Electronic Messages Act and the Harmful Digital Communications Act.

• Corporate structuring for IP protection
  It’s crucial to separate IP ownership from operational risk. "If there is a claim made against you by a customer or an employee...they might sue the company which also owns the IP," Edwin explains. The solution is establishing an IP-owning company and license it to separate trading companies.

Key takeaways: 

• Protect your IP from day one: Ensure all employment, contractor, and development agreements explicitly assign IP to your company. Don't wait until due diligence to discover ownership gaps.

• Nothing on the internet is "free": Obtain proper licenses for all third-party content, components, and APIs.

• Understand your open source obligations and conduct regular audits of open source components in your codebase.

• Terms and conditions are your contractual shield: invest in properly drafted terms that reflect your business model, limit your liability, clarify data ownership and give you practical remedies (like service suspension for non-payment).

• Consider corporate structure early: separating IP ownership from operational entities protects your most valuable assets from claims against your trading companies. It's much cheaper to structure correctly from the start than to restructure later.

Watch the full session: explore these insights in depth and see Edwin's practical examples and real-world case studies in the complete recording.