Talents for startup – Startups in Kuwait

Attorney Fajer Ahmed

Establishing a business can be a very challenging experience, yet rewarding in many ways. Support is very much needed in the initial stages – from technology experts to marketing assistance. Thankfully, Kuwait is now a hub for startups with a wide range of support services. I am thankful for the Kuwait National Fund and how they have supported small businesses, not just financially, but also by providing valuable resources for the startup community, such as training and access to consultations.

I am also very excited to share information on Erada, a 12-week intensive program for startups. Erada is a business incubator that is fully accredited by the Kuwait National Fund, where participants will be automatically qualified for financing once they graduate successfully from the program. Participants will benefit highly from the support of talent, such as legal expertise, marketing support, sale strategies, business solutions and so on. The program is free and is open to all Kuwaitis – you can register on www.erada.io
Since having a well-rounded talented team is important, I have chosen to speak about talents for startup, answering questions as requested by my readers.

Hiring talent
Question: Should I hire talent or acquire talent through service providers? What should I watch out for from a legal perspective for both options?
Fajer: Deciding how or who to hire can be very tricky, but at the end of a day, it’s a purely business decision that I should not really interfere with as a lawyer. But I can assist with things to keep any eye out for as a small business when making those decisions. There are a few options to look at:

1. Acquiring services through a specialized firm: If you need to hire a specialized firm, you need to be careful with the agreement that you sign. Many startups make the mistake of not signing an agreement with a service provider that includes detailed information of what they need, like how many hours of services, the exact services needed or expertise required. For example, let’s say you are looking to hire a company for developing a mobile application. It is important to specify if the development will be for Google Play or the App Store. My advice is to be as detailed as you can.

2. Freelancer: Hiring a freelancer can be a blessing and a curse at the same time. With freelancers, you will be able to get work devotion for a very low cost, but many legal issues arise. Things to watch out for is how to make sure this person is liable for submitting the work required, and how to avoid a legal employment relationship where the startup may be responsible for employment responsibilities and obligations towards the freelancer.

3. Hiring talent: This may be a great option but expensive as well. Things that you might need to think of as a startup when hiring is non-completion of work, training, employment share plan and so on.

Vesting schedule
Question: As a startup we do not have the funding to hire employees, and therefore we have offered partnerships for the team that will initially set the company up. I have heard of something called a vesting schedule. How can we include this in the articles of association of a company when establishing it?
Fajer: A vesting schedule is very important if you have founders working for the startup. A vesting schedule in simple terms is when a founder receives shares for working, so for example for every month of work, the founder will receive 500 shares from the company. Unfortunately, this is not something you can include in the articles of association of a Kuwaiti company.
If you have a concern, please email us at info@ftl-legal.com

By Attorney Fajer Ahmed

This article was published on 03/05/2018