Legal Question in Business Law in Massachusetts

To Whom It May Concern:

I work for a start up company which is geared towards internal cloud based networking solutions for mid to large size corporations. The company has developed a unique system which when implemented streamlines and expedites work flows for the corporations and their employees and integrates a client database that encourages the use of the system to learn more about the corporation and it's products and services. The system not only creates synergies but also increases customer loyalty. This is all done in a simplified and very user friendly way. Currently there isn't a similar system offered like ours and without divulging the exact details of why it's different and why we see it as the future of corporate internet networking, I am hoping to get some much needed guidance on the necessary steps the company should take to adhere to the most professional standards as possible.

The idea of the system has been developed over the past year and much thought has gone into the functionality and how to make it unique so as to appeal to mid to large scale corporations. The internal development and code will require a team of programers and a considerable amount of funding to develop the system itself. We estimate that a team of programers will need between six months to a year to finish the construction of our system that then can be customized and implemented to meet clients needs.

I am more of a creative individual working alongside the owner who has a computer programing and developing background. It's safe to say neither of us have the business background to answer many of the questions and concerns which I will present to you today. Our current situation is one that has created many questions and no doubt we recognize the need for legal representation as soon as possible in order to maintain what we hope will be a high level of professionalism. No capital has currently been raised and to this point all investment has been from the owners own finances and is estimated at 42,000 euro.

Lucky for us we have recently had the opportunity to pitch our idea in the form of an audio visual presentation to a high level executive in a highly recognizable multinational global company with annual revenues in the billions of dollars. Through our analysis based on inside information we were able to customize our presentation to show how the implementation of our system could add value to their company. The feedback we received was overwhelmingly positive and we were told our presentation was much more than was ever expected and the word �impressed� was used. The feedback along with the response was so positive in fact that we have a second meeting scheduled with even higher level executives. Our proposal covered only the basics of the system and we still have two more stages of the proposal to show them. When presented with the question �How much will this cost?� I explained that I was not comfortable putting an arbitrary number on our system and that we hoped that by them watching all stages of our proposal it would help to give them a better understanding of the value as it relates to them. This brings me to my first concern... How do we establish value for a system that has never been created before? One of the greatest values as it pertains to this company was the massive increase to productivity. We easily explained and even showed via a mock webpage how their employees would work more efficiently. We can easily estimate a per employee percentage of time saved but how do we correlate that into a monetary figure? Time is not the only way this system will benefit this particular company but rather only a piece of a larger pie. It was my thought that if we continued to show the value of or system that we could then ask the company what their conceived value is and what it is worth to them? Good idea or bad?

I would like to present a series of questions now in hopes of deciphering our next plan of attack. As I mentioned before there is little in the way of funds to hire the caliber contract lawyer or corporate law firm which we understandably need. This leads me to my first question... Are there any ways to secure a lawyer or firm to assist us on a pro bono basis based on the high level of interest we have received from a potential client as large and well known as the one we are currently building a relationship with?

The potential client is aware that the system still needs to be developed and would take an initial upfront investment from them before they could use it. This leads me to my next question or questions. Would it be better to ask for a letter of intent or some sort of contract from them that we could then use to help us secure start up capital via Angel investors, bank loans, etc.? This way it's clear that we are paying for the development and they are paying us for the rights to use the system for a set period of time and possibly pay a no-compete or other type of fee to hold exclusivity on the system for a period of time? As mentioned the system is customized to meet the clients needs but in this case it could still very easily be tweaked to meet the needs of similar companies such as their competitors. Establishing an exclusivity agreement would not give them ownership of the overall system but rather as it pertains to them and for a price they could buy the exclusive rights and be the only one in their field to incorporate this system. How would we determine that figure if this is a possibility?

I guess the question is relevant to our needs vs. their wants. Lets say that they decide that they don't want to invest in the development of the system I want to have a backup plan or two even! Loosing this deal isn't an option and I want to have all my i's dotted and t's crossed. We don't want this major opportunity to fall through the cracks because we weren't prepared to answer the big questions. What are the best options and what would you suggest? Any idea what legal fees would amount to? We appreciate any and all insight and look forward to reading your response. Thank you for your time.

Best regards,

Aaron L. Lyon

Project Manager

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