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  • Writer's pictureLindsay Spiller

Top 10 Legal Mistakes to Avoid as an Entertainment Startup

Updated: Dec 31

Startup founder realizing he's made a mistake

Welcome to the wild and wonderfully unpredictable world of entertainment startups. Whether you're a filmmaker, a music producer, a game developer, or a digital content creator, there's something exhilarating about transforming your creative vision into a thriving business. But as an entertainment lawyer with years of experience working with bright-eyed startups, I can assure you that the road to success is paved with potential legal landmines.

To help you navigate the precarious landscape of entertainment law, here's a list of the top 10 legal mistakes that startups often make and, more importantly, how to avoid them. So, please sit back, grab a notepad, and let's get started!

1. Overlooking Intellectual Property (IP) Protection

The Mistake: Imagine this: You've just created a game-changing virtual reality experience. The market is buzzing, your demo's going viral, but suddenly, you find another startup business using your design. Why? Because you didn't secure the appropriate IP protections.

The Solution: Engage an entertainment law firm early to help you register trademarks, patents, and copyrights, ensuring your brilliant ideas remain yours.

2. Not Understanding Contract Law

The Mistake: The Rolling Stones once famously sang, "I can't get no satisfaction." They were probably talking about a bad record deal. Contractual misunderstandings are a common issue in the entertainment industry.

The Solution: Your startup business lawyer should thoroughly review all contracts to ensure you understand the obligations, limitations, and legal implications before signing.

3. Ignoring Regulatory Compliance

The Mistake: The unfortunate fate of many startups, even outside the entertainment industry, is running afoul of regulatory bodies due to a lack of compliance.

The Solution: Staying abreast of the regulations impacting your industry and business operations is essential. Consult with an entertainment lawyer to ensure you comply with all relevant laws.

4. Failing to Define Business Structure

The Mistake: Without a clearly defined business structure, you risk facing liability issues, tax complications, and operational chaos.

The Solution: Discuss with an entertainment law firm to determine the best structure (e.g., LLC, S-Corp, etc.) for your business, considering your long-term goals and potential risks.

5. Not Securing Proper Licensing

The Mistake: Remember when Napster crumbled under the weight of massive copyright lawsuits? That's what happens when licensing is ignored.

The Solution: Consult an entertainment lawyer to identify licenses, clearances, and permissions to use third-party content lawfully.

6. Inadequate Employment Agreements

The Mistake: Many startup businesses have been rocked by job roles, compensation, and termination disputes. The absence of a well-structured employment agreement can lead to chaos and legal trouble.

The Solution: Work with your startup business lawyer to draft clear, comprehensive employment agreements.

7. Overlooking Privacy and Data Security

The Mistake: Ever heard of the Sony Pictures hack in 2014? It led to bad press, hefty fines, and even executive resignations.

The Solution: An entertainment law firm can help you establish robust data protection policies and procedures, ensuring you adhere to privacy laws and best practices.

8. Not Having a Good Exit Strategy

The Mistake: Every startup needs an exit strategy, whether a sale, merger, or IPO. Ignoring this from the outset could lead to complicated and costly issues down the line.

The Solution: Plan your exit strategy early on with the help of an entertainment lawyer, keeping in mind your business's potential growth trajectory and market conditions.

9. Misclassifying Workers

The Mistake: Misclassifying employees as independent contractors is a common mistake that can result in hefty fines and back taxes.

The Solution: Seek advice from your startup business lawyer on adequately classifying your workers to avoid potential legal issues.

10. Not Using Non-Disclosure Agreements (NDAs)

The Mistake: Ever had a brilliant idea mysteriously appear elsewhere after a pitch? Chances are, you didn't use an NDA.

The Solution: NDAs are crucial for protecting your ideas and proprietary information. Work with an entertainment law firm to defend you during discussions and pitches appropriately.

Conclusion Regarding Startup Legal Mistakes

Navigating the treacherous waters of the entertainment industry is daunting, but with an experienced entertainment lawyer by your side, you're setting your startup business up for success. Remember, a good lawyer doesn't just fight legal battles; they prevent them from happening in the first place.

So, make the intelligent choice: Reach out to a reputable entertainment law firm, get a startup business lawyer who understands your vision, and stay clear of these common legal mistakes. That way, the only drama you'll encounter will be the kind you produce. Break a leg!

Spiller Law is an advisor to startup businesses, entertainment and media companies, and artists. Feel free to schedule a free consultation.


Spiller Law is a San Francisco business, entertainment, and estate planning law firm. We serve clients in the San Francisco Bay Area, Silicon Valley, Los Angeles, and California. Feel free to arrange a free consultation using the Schedule Appointment link on our website. For other questions, call our offices at 415-991-7298.


The information provided in this article is for general informational purposes only and should not be construed as legal advice or opinion. Readers are advised to consult with their legal counsel for specific advice.


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