The Most Common Legal Mistakes When Growing or Launching a Product and How to Avoid Them

The Most Common Legal Mistakes When Growing or Launching a Product and How to Avoid Them

In an ecosystem driven by immediacy and constant iteration, many startups choose to grow first and regularize later. But the price of neglecting legal compliance from the outset can be high. Disputes between partners, conflicts over software ownership, or penalties for violating data regulations can all stall growth right when traction is accelerating.

This article does not aim to curb entrepreneurial momentum, but rather to serve as a preventive guide to help protect what you are building.

Three key legal mistakes that threaten digital businesses

These are the 3 most common mistakes we find:

1. Neglecting intellectual property

Your startup may have a great product, an active community, and an incredible storytelling approach. But if the code, design, or name doesn’t legally belong to you, you’re building on quicksand — and this mistake is more common than it seems.

Some of the most frequent issues include:

• Not registering the trademark: owning a web domain or a social media handle does not equate to legal ownership of the name. Without a registration, anyone could beat you to it.
• Code without a rights transfer: who developed the software? Did you sign an agreement that explicitly transfers rights? If it was a freelancer, an external CTO, or even an informal collaborator, you might not have legal control over your own product.
• Unprotected designs and content: from logos to illustrations or promotional videos, everything should be documented and contractually assigned to the company.

How to prevent it?

• Register your trademark as soon as possible.
• Sign rights assignment agreements for everything with creative or technical value.
• Don’t underestimate the value of specialized intellectual property advise.

A company that doesn’t control its intellectual property doesn’t control its business.

2. Lack of contractual clarity

In the early months, startups often operate on promises, informal emails, and verbal agreements. Technical development, user acquisition, and fundraising are usually prioritized, but what’s not written into contracts often leads to problems, such as:

• Founders without a shareholders’ agreement: what happens if one wants to leave? What if an investor comes in and there’s no clear distribution?
• Informal hiring: freelancers, agencies, developers, or designers working without defined timelines or ownership clauses.
• Confidentiality and competition: what if someone shares your project idea? Do you have non-compete and exclusivity clauses?

To mitigate these risks:

1. Draft a shareholders’ agreement from the beginning, early is best, as alignment is highest.
2. Formalize all key relationships through written contracts.
3. Include confidentiality and IP clauses in all external agreements.

Contracts not only prevent conflicts, they bring credibility to the project and confidence to investors.

3. Failure to comply with the GDPR

This is one of the most common mistakes among startups with a website: missing or poorly drafted legal texts (privacy policy, legal notice, and cookie policy). We often find AI-generated privacy policies, incomplete legal notices, misconfigured cookie banners — or no documents available at all.

This is not only a clear breach of the GDPR and the Spanish LSSI-CE, but it also undermines user trust and can result in significant penalties from the AEPD.

Your website must include:

• Legal notice with identifying information about the service provider.
• Privacy policy tailored to the type of personal data processing carried out.
• Clear and updated cookie policy, with a compliant consent banner.
• Terms and conditions of service, especially if the service is provided through the website.

These texts should be tailored to your business model, not generic. Having them is not optional: it is mandatory and, above all, strategic to build a relationship of trust with your users from the minute one.

Innovation requires taking risks. But some risks are strategic, and others are simply unnecessary. Legal risks, if well managed from the start, are among the easiest to avoid.

What you ignore today due to lack of time or resources might cost you years of reputation or thousands of euros in litigation tomorrow.