"A website is your shop front to the world - and just like a physical store, it can get robbed, vandalised, or shut down overnight if you don’t protect it." – Matt Glynn

If you’re running a startup, having an online presence isn’t optional - it’s oxygen. Your website might be your storefront, your sales engine, your information hub, or all three. But here’s the part too many founders ignore: that digital shopfront comes with real-world risks that can cripple your business.

In this Station, we’ll run through the key considerations for founders diving into online trading - covering legal, technical, security, and commercial risks.

This is only an introductory overview. Legal issues are deep enough to warrant their own article, so we’ll cover them in more detail in a separate Start Up Station: Legal Risks in Online Trading. For now, think of this as the broad framework that helps you identify where your exposures might be.

This is an important stage of the start-up journey because:

◼️Universal presence: Almost every business needs an online footprint to be taken seriously.

◼️Regulatory complexity: Operating online may expose you to multiple legal regimes - even if you are B2B, you may still trigger certain obligations in your target markets.

◼️Content responsibility: You’re legally responsible for what’s published on your site, even if it’s user-generated.

◼️Intellectual property: Your site’s content, branding, and product descriptions need IP protection.

◼️Data privacy: Collecting customer or user data triggers privacy laws in multiple jurisdictions.

◼️Cybersecurity threat: Hackers, phishing scams, and ransomware can disrupt or destroy your operations.

◼️Reputation risk: Negative reviews, fake profiles, or data breaches can cause lasting damage.

◼️Commercial exposure: Fraudulent transactions, counterfeit goods disputes, and reputational loss can hit revenue and cash flow.

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

Legal Implications

◼️Breach of consumer protection laws in applicable B2C scenarios (B2B businesses may not be subject to these, but may still face contractual and advertising law obligations).

◼️Heavy fines for non-compliance with data protection laws (e.g., GDPR, PDPA).

◼️IP infringement claims for unlicensed images, content, or software.

Founder Relationship Issues

◼️Disputes over who owns the website, domain, or content.

◼️Arguments about who is responsible for legal compliance or technical security.

Commercial Implications

◼️Loss of customers due to site downtime or slow performance.

◼️Costly refunds or chargebacks from fraudulent transactions (where applicable).

◼️Inability to operate in key markets due to regulatory blocks.

Operational Implications

◼️Site taken offline by hosting provider for policy breaches.

◼️Disruption due to cyberattacks, malware, or ransomware.

◼️Loss of critical data due to inadequate backups.

Biz Valuation Issues

◼️Reduced investor confidence due to poor online compliance.

◼️Lower valuation if your online systems are seen as insecure or non-compliant.

The above lists are indicative issues – the relevance of which will depend on your circumstances…

We’ve identified quite a number of potential issues… below are some examples of the types of steps you should consider:

1. Register and Protect Your Domain

◼️Secure your domain name early and register variations to avoid brand hijacking.

◼️Use domain privacy and lock settings to prevent unauthorised transfers.

2. Review and Comply with Laws in All Target Markets

◼️Understand e-commerce, advertising, and consumer protection laws where they apply - especially if you’re B2C.

◼️Factor in tax and customs obligations for cross-border trade.

3. Implement a Data Protection Policy

◼️Have a clear privacy policy and terms of service on your site.

◼️Comply with relevant privacy laws (e.g., GDPR, PDPA).

4. Secure Your Website Technically

◼️Use HTTPS, firewalls, and intrusion detection systems.

◼️Keep all CMS, plugins, and software patched and up-to-date.

5. Plan for Cyber Incidents

◼️Have an incident response plan for data breaches or ransomware attacks.

◼️Regularly back up your site and test your recovery process.

6. Manage Content Risk

◼️Review all content for copyright compliance.

◼️Moderate user-generated content to avoid defamation or IP infringement claims.

7. Set Up Strong Payment Security (if applicable)

◼️If you process payments, use secure payment gateways with fraud detection tools.

◼️Monitor for unusual transaction patterns.

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.

Yes, some risks may never materialise. But the point is to know they exist, weigh them up, and make informed decisions. As a startup, you have finite time and money - you can’t address everything at once. But ignoring the big-ticket risks until something goes wrong can be fatal.

Case 1 – The Equifax Data Breach (2017): While not a startup, this high-profile breach saw hackers steal sensitive data on 147 million people due to an unpatched website vulnerability. The company faced lawsuits, fines, and reputational damage that cost over USD 4 billion.

Case 2 – TalkTalk Cyberattack (2015): UK telecoms provider TalkTalk suffered a website-based SQL injection attack compromising the data of over 150,000 customers. The company was fined £400,000 and lost over 100,000 customers in the months following the breach.

Case 3 – Ashley Madison Hack (2015): Hackers breached the dating website’s systems, leaking the personal details of 32 million users. The incident led to multiple lawsuits, executive resignations, and the near-collapse of the business.

As a start-up operator you may not be familiar with legal jargon. Here are some key terms:

◼️E-commerce Regulations: Laws governing the sale of goods and services online. In B2B contexts, these are less likely to be consumer protection laws, but other obligations may still apply.

◼️Data Protection Laws: Regulations that control how you collect, store, and use personal data (e.g., GDPR, PDPA).

◼️Intellectual Property (IP): Legal rights protecting your branding, content, and technology from unauthorised use.

◼️Cybercrime: Criminal activities targeting computer systems, networks, or data, such as hacking or phishing.

Watch out for the legal jargon and refer to the knowledge hub for more detailed explanations.

Your website isn’t just a marketing tool - it’s a legal and operational risk centre that spans multiple countries and disciplines. By treating it with the same seriousness as a physical store or office, you protect your revenue, reputation, and long-term business value. In online trading, prevention is always cheaper than cure.

We advise startups on the full spectrum of online trading risks, including:

◼️Drafting website terms & conditions and privacy policies

◼️Advising on cross-border e-commerce compliance (B2B and B2C)

◼️Intellectual property protection and enforcement

◼️Data protection and GDPR/PDPA compliance

◼️Cybersecurity legal obligations and breach response planning

◼️Domain name disputes and recovery

◼️Contract reviews for payment gateways and hosting providers

◼️Regulatory licensing for restricted online activities

◼️Risk assessment for new online business models

◼️Ongoing compliance monitoring for multi-jurisdiction operations