“You can’t scale a business model you haven’t even agreed on – and no investor is funding your confusion.”
– Matt Glynn

Most startup founders spend hours aligning on the product vision – but almost zero time aligning on how the business will actually function.

What are we selling? What are our core values? Who are our customers? What price point are we aiming for? How do we want to operate? If you can’t answer these questions with your co-founders – or worse, each of you has a different answer – you’re not building a business. You’re just building misunderstandings.

The excitement of launching, raising funds, building product, and pushing marketing often drowns out this critical phase of agreement. But ignoring it can leave your startup rudderless, divided, and unattractive to serious investors.

In this “start up stage review”, we’re going to flag up some considerations to help you better prepare to tackle this part of your start up journey – before it tackles you.

Startups don’t die from bad tech – they die from misaligned expectations.
The Business Terms stage is an important part of the start-up journey because:

◼️Strategic Alignment: forces founders to clearly define the startup’s vision, mission, and goals.

◼️Commercial Focus: ensures everyone agrees on what the business sells, how it will make money, and who it's for. 

◼️Pricing Clarity: prevents chaos around discounting, undercharging, or misaligned revenue expectations.

◼️Cultural Consistency: sets the tone for company values, internal communication, and decision-making styles.

◼️Execution Efficiency: gives the team a framework to prioritise resources and avoid pointless debates.

◼️Hiring Direction: helps determine what roles to hire for and what skills matter most. 

◼️Investor Credibility: shows VCs and angels that the team has their act together commercially and strategically.

◼️Decision Framework: creates a reference point for resolving disagreements without stalling progress.

◼️Customer Messaging: aligns the value proposition internally so external messaging is clear and compelling.

◼️Operating Model: defines how the business will work – from delivery methods to key partnerships.

The consequences of not attending to this issue may include the following: 

1. Legal Implications 

◼️Founder Disputes: poorly defined roles and inconsistent expectations can escalate to legal disagreements. 

◼️IP Conflicts: lack of clarity on who created what or controls what assets can lead to ownership issues.

2. Founder Relationship Issues 

◼️Strategy Splits: founders pulling in different directions on pricing, customers, or growth pace. 

◼️Trust Breakdown: one founder goes rogue on pricing or ops, others feel undermined. 

◼️Unclear Expectations: when the business runs into trouble, no one knows who should do what.

3. Commercial Implications 

◼️Mixed Messages: customers get confused if each founder promises something different. 

◼️No USP: if your team can’t articulate a clear value proposition, no one will buy. 

◼️Revenue Chaos: discounting wars, unclear pricing structures, or over-promising destroy credibility.

4. Operational Implications 

◼️Wasteful Delivery: unclear service models lead to over-servicing and operational burnout. 

◼️Hiring Misfires: different assumptions about team structure create internal conflict. 

◼️Low Morale: inconsistent leadership direction frustrates early hires and advisors.

5. Biz Valuation Issues 

◼️Investor Red Flags: misalignment on commercial direction signals deeper governance issues. 

◼️Due Diligence Delays: unclear business model makes investment readiness harder to prove. 

◼️Exit Risk: acquirers lose interest when they see the team lacks cohesion on go-to-market.

The above lists are indicative issues – the relevance of which will depend on your circumstances, including the nature of business undertaken by your start up.

“Decide what kind of business you want to run – and do it early.”

We’ve identified quite a number of potential issues that the start-up needs to consider and below are some examples of the types of steps you might want to consider taking to address these issues considered above. 

1. Define Your Core Proposition

◼️Agree on what the business is offering, who it serves, and what differentiates it. 

◼️Create a one-page business model summary and get all founders to sign off.

2. Align on Pricing Strategy

◼️Decide whether your model is high volume, high margin, freemium, subscription, or enterprise. 

◼️Set baseline pricing and discount policies for consistency.

3. Set Internal Operating Norms

◼️Agree how the business will run: lean, fast, remote-first, hierarchy vs flat, etc. 

◼️Document how you’ll make decisions and resolve internal conflicts.

4. Establish Cultural Foundations

◼️Define values, behaviours, and working styles early to guide hiring and leadership. 

◼️Include these in your onboarding and investor decks.

5. Link Business Terms to Product Roadmap

◼️Make sure your go-to-market offer matches your technical capabilities. 

◼️Don't sell what you can't deliver.

6. Prepare to Articulate Your Commercial Model

◼️Investors will ask about LTV, CAC, GTM strategy – don’t wing it. 

◼️Map your business terms to early financial projections.

The above suggestions are just a few of the steps you can consider taking.
There are many more things that need to be done to ensure the associated risks are effectively and pragmatically dealt with.

We’re not trying to be alarmists and go so far as to say that some of the legal risks we have flagged may never materialise for your business – but others can hit like a freight train.

The key point is awareness – just have a think about the issue – know that it exists and decide for yourself what you want to do.

Yes, we know you're juggling limited time, money, and human bandwidth. Sometimes ignoring a legal risk might even make sense – providing doing so is not illegal.

However, “Knowledge” has always been your greatest asset and know you have the GLS Knowledge Centre to help fill in details about the start up journey.

Let’s look at how things can go sideways:

Case Study 1: “The Growth Tug-of-War”
One founder wanted to prioritise big enterprise clients, while another focused on SMBs. Each sold to different segments with different pricing – leading to chaos in delivery and messaging. Revenue stalled and both leaders blamed each other.

Case Study 2: “The Misfire MVP”
The product team built features based on one founder’s vision – but the sales team, guided by another founder, promised something else entirely. Customers churned. Founders fought. And investors walked away.

Case Study 3: “The Culture Clash”
Three co-founders each hired people aligned to their personal leadership style. Remote vs in-office, casual vs corporate. The internal culture became incoherent. Key talent left. Brand perception suffered.

As a start-up operator you may not be familiar with legal jargon. As you navigate this stage of your start-up journey – you might encounter the following legal definitions:

◼️Commercial Model: the structure by which your business delivers value and generates revenue. 

◼️Go-To-Market (GTM): your strategy for reaching customers, making sales, and generating traction. 

◼️Misrepresentation: a false statement that leads another party to contract or rely on something untrue.

Watch out for the legal jargon and refer to the knowledge hub for an extensive legal dictionary that you can access at any time: https://www.gls-startuplaw.com/legal-ops-terminology

Every founder wants to build something amazing. But without shared agreement on the business model, the strategy, the pricing, the culture, and the operating rhythm – you’re just spinning wheels.

Align early. Document your thinking. Make sure your team, your investors, and your customers know exactly what kind of business you’re building. GLS can help you lock it in.

GLS may well be able to help you navigate the issues associated with the Business Terms stage.
Few, if any, integrated legal solution providers have made themselves as accessible to the start-up community as we have.

Consider engaging with GLS via any of the following means: • GLS Start Up Centre: visit our world-leading start-up legal support resource – we might have a solution “ready to go” available to you at a fraction of the cost – visit www.gls-startuplaw.com

◼️GLS Knowledge Hub: check out the knowledge hub for more information on this issue to learn more about what you need to do
https://www.gls-startuplaw.com/blog

◼️GLS Support Plan: consider engaging your own in-house legal team capability with a highly disruptively priced GLS Start Up Support https://www.gls-startuplaw.com/plans

◼️GLS Legal On Call™: trial GLS Legal On Call™ for free – access up to 3 free in-house legal consults and feel the power of your own “on call” legal team https://www.gls-startuplaw.com/product/gls-legal-on-call-free-trial

◼️Book A Consult: book a complimentary one-off 15 min consult via our e-calendar
https://calendly.com/globallegalsolutions/startup-free-legal-consultation?month=2025-03

◼️GLS Start Up Clinic: join our next pro bono start-up clinic for an in-person free consult – book here.