It’s a fact of life: every commercial software developer and provider will, at some point in its lifetime, find itself contracting with another organization to provide services, custom software development being the most common.

Every organization must address various issues when deciding whether or not to contract for these services. This document is intended to guide organizations in such a situation by explaining the problems they should consider and helping them approach the contracting process with an awareness of their rights and responsibilities.

Developer’s Roles:

Organizations engaging a developer for custom software development may contract directly with the developer or through another intermediary (such as a contractor or agent).

Organizations contracting directly with the developer may be in a different geographic location than the developer and thus require some means for communication and coordination. This document focuses on situations where the organization is contracting through an intermediary.

Suppose you are considering contracting to have custom software development performed. In that case, work intimately with your chosen intermediary ( “agent”) to ensure your interests are represented and you understand all of the issues that need to be addressed.

Your intermediary is likely to ask you some questions to help ensure they can serve as an effective agent, such as:

  • How many developers will be involved?
  • What programming languages do they use?
  • What payment terms and conditions are you thinking about using?
  • What tools or materials do you wish to require the developer to use?

You should answer these questions honestly and entirely from your organization’s perspective. The more information you have, the better your intermediary will serve as an effective agent in protecting your interests.

Cooperative Terms:

The developer or intermediary will probably suggest various terms that should be included in the contract with the developer.

These may consist of billing rates, payment schedules, milestones, exclusivity provisions, indemnification requirements, and restrictions on publication materials produced during the work.

In some cases, your intermediary may propose a generic contract for you to approve without changes. In others, they will suggest language that should be included in the developer’s contract with you.

The following discussion covers major areas typically addressed in a custom software development agreement.

Billing Rates:

If your intermediary proposes a billing rate for the developer, look closely at it and make sure you understand how it was calculated.

Ask your intermediary to explain any figures that are not clear to you. If you believe there is a calculation error, ask them to correct it before contract negotiations. Never arbitrarily accept a developer’s billing rate without questioning it and understanding how it was calculated.

Billing rates are typically based on the number of hours spent working on the projector, less frequently, on an estimate of total person-hours required to complete the project. Developers’ hourly billing rates may be expressed as a fixed amount per hour or as a percentage of some other fee(s).

If the rate is defined as a percentage of fees charged by other parties, you need to understand how those fees are established.


You should explain the billing rates and other terms of your contract with a developer after understanding how they were calculated.

If necessary, ask for assistance, and do not hesitate to contact the developer if you have questions or need clarification on some point. A cooperative approach will make it easier for you and your intermediary to agree with the developer.

One of the things that may bother every software developer is legal issues. You cannot predict what kind of legal action might be taken against you due to your software, especially business processes. Developing specific software can create many possible legal problems if you are not careful enough.

Also, if your software is related in any way to gambling, and it has proved helpful in facilitating the use of online casinos or poker sites that do not have proper legal cover, you can get in trouble.

A simple thing like your software managing user passwords can get you into hot waters if some people use the product to access web services against their local laws, such as adult or gambling websites. There are a number of reasons why someone would take action against you. 

For instance, if your software enables its users to carry out certain activities that violate copyright laws, you can be sued for providing such a tool. However, if you plan on developing specific software which might break any legal issues, there are some things you need to take into consideration.

IP Protection:

You can protect your software from possible copyright infringement by ensuring that your code is appropriately encrypted and impossible to be deciphered or copied by a third party.

Also, it would be good to have several means of identifying the software owner, for instance, by having a registration number entered when installing your product. This can help you prove that you are not trying to conceal anything.

You may also want to have an Agreement of Non-Disclosure or Non-Compete document signed by your client if they request this from you. These documents will help you protect your software from being used in a way that violates legal issues.


Another important issue you may want to take into consideration is attribution. Your software should always give clear indications about its owner, for instance, by providing the name of the company and its official address on every screen it uses.

Also, you can add a logo and some text boxes through which the company can describe what it does so that users know whom they are dealing with when they install your product.

Conversely, you may want to consider buying an insurance policy for your software if you genuinely believe that people will use it to violate copyright laws or any other legal issues. Insurance carriers will provide you with a certain amount of protection if your software causes legal troubles to someone else.

Legal Protection:

Any software developer should know that what they do can affect other people’s lives and business processes. You need to consider possible legal issues before deciding about developing specific software.

There are several ways to protect your software from possible legal issues and ensure it stays completely safe and reliable.

You should consider consulting a lawyer before starting the development process to avoid uncertain situations. Also, even though you do not think about developing certain types of software, there is always a chance that someone could use your product in a way that is against the law.


If you develop software for businesses, make sure to include an Agreement of Non-Disclosure or Non-Compete document, which will help you protect your software from being used illegally.

Also, having an attribution section on your website can do wonders when it comes to protecting your product from possible legal issues.

Be aware that you can get in trouble if your software violates any copyright laws. Copyright infringement is a serious crime, and you need to consider it before deciding about your software.

When starting a new project, you’ll need to make one of the first decisions is what software licence to use. This decision can be tricky, as there are many different licences to choose from, each with pros and cons. In this article, we’ll discuss the most popular software licences and how to choose the right one for your project.

Common Software Licences

The most common software licences are the GNU General Public Licence (GPL) and the Apache Licence. GPL is a copyleft licence, meaning that any modifications or enhancements you make to the software must be released under the GPL. The Apache Licence is a permissive licence, which means that you are not required to remove your changes as long as you include a notice in your source code that the Apache licence applies to those changes.

So, if you want to have the freedom to do whatever you want with the software, use a permissive licence. If you want others to share and contribute any enhancements they make, use a copyleft licence.

Other popular licences include the MIT Licence and the BSD Licence. The MIT Licence is very permissive and allows you to do anything you want with the software, while the BSD Licence is similar to the Apache Licence in that it will enable you to keep your changes private.

Choosing The Right Licence

When choosing a software licence, there are several factors to consider. First, you should ensure that your software licence is compatible with other software licences. For example, the GPL is not compatible with the MIT Licence because the GPL requires modifications to be released under the GPL.

Also, consider how users will use your software. If you want people to contribute back enhancements they make, you’ll need a licence compatible with the GPL. If you don’t care if people make changes or not, then a permissive licence like the MIT Licence or BSD Licence would be a better choice.

Understand The Difference Between Open-Source And Commercial Licences

Another thing to consider is the difference between open-source and commercial licences. Open-source licences allow people to use, copy, modify, and redistribute the software for any purpose, while commercial licences are typically used by companies that want to sell their software.

If you’re unsure which licence to choose, it’s best to go with an open-source licence. If you want to market your product, you can always create a commercial permit later.

Choosing the proper software licence for your project only takes a few minutes, but it is an important decision that you’ll have to live with for as long as your project lives. In addition, choosing the wrong licence can hurt both your project and the open-source community.

Consider Whether You Want To Allow Others To Use, Modify, Or Distribute Your Software.

Choose a licence that is most compatible with your needs. If you don’t know which licence to get, you can always go with the GNU General Public Licence (GPL) or the Apache Licence—both are well established and will work for almost any project.

When choosing a software licence, there are several factors you need to take into account. The most significant one is whether you want others to be able to use, copy, modify, and redistribute your software. If you do, you’ll need a licence compatible with the GNU General Public Licence (GPL).

Choosing the wrong software licence can have severe consequences for your project and the open-source community. If you’re unsure which licence to choose, it’s best to consult a lawyer who specialises in intellectual property law.

Licensing is an integral part of software development, and choosing the wrong licence can harm your project and the open-source community. This article will discuss the difference between open-source and commercial licences and the factors you need to consider when choosing a software licence. We’ll also provide tips on selecting a suitable licence for your project.

Finally, think about the legal implications of using a particular software licence. Some licences are more prohibitive than others, and you may need to get permission from the author before using the software. Vigilantly read the licence agreement carefully before choosing a licence.

The scope of software in today’s world is massive. Hence, there is an ever-increasing demand for quality software applications to cater to the needs of people from various segments such as education, entertainment, business etc.

With the advancement in technology, high-performance computers with high storage capacity coupled with enhanced connectivity are becoming more and more affordable. This has given a fillip to the software industry, and there is an increasing trend of people setting up their own software companies.

However, running a software company isn’t easy. Several legal issues need to be taken into account. This article will look at some of the most important legal matters that software companies need to know.

Intellectual Property Rights:

One of the most critical legal issues that software companies need to know is intellectual property rights. To protect their intellectual property, software companies need to register their trademarks and copyrights with the appropriate authorities.


A software company needs to have a proper understanding of licensing. Several licenses need to be taken into account while developing software for different types of users. For example, the educational community uses the Educational Community License (ECL) while businesses use either the General Public License (GPL v3) or the Business Source License (BSL).

Contractual Issues:

Software companies need to be aware of the various contractual issues that can crop up while doing business with other companies. For example, there could be issues regarding the payment terms, delivery of goods and services, warranties etc.

Employment Issues:

Running a software company is tough because of all the required resources to get the work done. One solution would be to hire full-time employees to run the business’s day-to-day affairs. However, employing full-timers can give rise to serious employment issues such as – employee rights and obligations, termination of employment, benefits etc.

Privacy and Data Protection:

Privacy and protection of data have become critical problems with the advent of big data and the internet of things. Software companies need to be aware of these issues and take steps to protect their customers’ privacy and the data they collect.

Licensing of Software:

Not all software can be distributed for free. The software company’s license needs to be checked when distributing non-free software to ensure compliance with local laws and regulations.

Getting Help From Experts:

Running a business involves taking risks, solving problems and sticking to a detailed plan. However, running a software business can be tricky as some complex legal issues need to be addressed. In such cases, it is recommended that software companies hire an experienced lawyer or consultant who can guide them through these complex legal minefields.

No matter how well you plan, something is bound to go wrong sooner or later. A good lawyer can help you resolve the issue quickly and cost-effectively. In addition, having a good lawyer on your side will give you the peace of mind that you need to focus on running your business.

So, if you are a software company, it is essential to be aware of the various legal issues that can crop up while doing business. You can protect yourself and your business from potential legal problems by taking appropriate steps.

Always be prepared when you meet with an investor. Lack of preparation means that they will most likely reject your proposal, and you’re back to square one. Having ready-made presentations makes it easier for the investor to know what your startup has to offer, which in turn increases the chances of getting funding.

Here are 7 essentials you need to have ready when you are about to meet with an investor.

1. The Executive Summary of your business plan

If they rejected your business plan, it is highly unlikely that they will read the whole thing again. But an executive summary is a brief overview of your plans and how you’d like to implement your ideas in the light of your financial and business restrictions. This summarizes your plans for them and saves time for both you and the investor.

2. A Product Demo

Investors don’t just invest in companies, but also the people behind it to know that they can trust their investment, which is why a product demo or presentation increases your chances of getting funding. In a product demo, you can show investors what your business is all about. You should have a professional product demonstration to present, that showcases how it works and the benefits of using your product or service. Not only that, but you will also be able to convince them at an emotional level because they will see (instead of just reading) how your product will work and how it can be beneficial to your audience.

3. The Release Schedule for a Project

Your potential investor would want to know how exactly you plan on going about with the funding that they give you, which is why it’s important that you have a clear release schedule that shows them what their capital will be used for. A good release schedule should have your milestones for the next 6 months to one year, showing them that you are making progress even without their investment.

4. Profit Projections Based on Market Analysis

You will need to be able to convince the investor that your business is profitable enough in order for him/her to put in his/her money. Investors are more concerned with the potential earnings of your business, so they would want to see detailed progress reports based on market analysis. This shows them where your company is heading, and how much you could earn once you have established yourself in the industry. 

5. The Team Behind Your Business

Your team should also be ready to meet with the investor when you are. This can include your co-founders, managers, developers and all other staff members, so it is important that they are polished when meeting with an investor in order for them to trust in your company. Show them that there is a solid team behind your business by giving them the rest of their bios than just their name.

6. Your Risk Assessment Report

Acquiring funding will mean that you are taking on risks. Be sure to show potential investors your risk assessment report, which may include market assessments or surveys in order for them to see how risky your business is, and how you plan on reducing the chances of failing in the industry. This also shows them that you know what you are doing, and how much effort you are putting in to make your company successful.

7. The Financial Forecast of Your Business

You will need a solid financial forecast by which investors can see how your business does financially over the next several years. Having a projected cash flow statement shows how your business will generate and use its cash over a specified period of time. This will help the investor understand whether or not your business is profitable enough for him/her to support, and if you have thought through all possibilities of how it could be financed by the business and any outside resources.


There are lots of things that you need to have ready when meeting with an investor. All these essentials will help your cause, so it is important that you have them all-not just one or two of them. A good presentation and product demo along with a detailed progress report on the goals for the next 6 months to 1 year would give you more than just a good chance of getting funded, but also help your product reach more customers.

The world of investing is one that most people know nothing about. You might be inclined to think that if you’re an entrepreneur or CEO, then this doesn’t apply; however, without knowledge of how things work, investors will likely pass on your idea because they don’t want any part of it!

But here we are with some good news for all those entrepreneurs out there who are looking at raising money from individuals as opposed to institutions like banks and other finance companies – pitching them successfully isn’t nearly impossible when armed with the right information (and maybe even a little trial-and-error). 

Understand what investors are looking for.

What they want to see: how you plan on acquiring and maintaining clients (if it’s a business or product), an analysis of the competition, what strategies you will use for marketing purposes; everything that can help them understand if this investment is worth their time.

And finally…they are looking to see if YOU as the CEO, entrepreneur or business owner will be around for a long time. If you’ve already failed with other ideas and companies, then this is going to stick out like a sore thumb. 

They’ll likely pass on investing in your company because it would just be too much of a risk (and we know first-hand that most investors are looking for the safest possible place to put their money).

Create a pitch deck that is clear and concise

Your pitch deck should be clear and concise, with an attention-grabbing elevator speech that can convince potential clients.

The first thing you need is a great idea for your product or service – this will set expectations of both quality and price range in the minds of those listening to hear more about what you have got going on! 

Next up: The visuals… think big; use colour schemes whether they suit the design aesthetic better than black text over white imagery etc. Finally, don’t forget about including some numbers – this will show that you have done your homework.

If you’re presenting to more than one person, limit yourself only to the most important points! For example: “The benefits of joining our company are too long to list”.

Research the investor 

Find out their interests and where they’re from because this will help determine how best to approach them about the available investment opportunity. .

If an investor seems hesitant to invest, then it is probably not a good idea to keep pushing them towards this decision – it’s important to pick up on these things early so don’t lose hope if someone isn’t quick to jump. Onboard! Remember, they are in the business of making money, and sometimes that means not taking a risk.

It’s important to research investors before you reach out to them and conclude whether or not it is worth reaching out at all. For example: if an investor only works with companies focused on video games, then your company should not waste their time or yours.

Send your pitch to potential investors 

Once you’ve done your research and got to the point where you are happy with what is being said in your pitch deck, it’s time to send out those emails! You should contact people who have invested in things similar to whatever industry or product/service you are pitching. 

Send them an email introducing yourself along with a summary of what you are offering and why they should be interested. It’s important to remember that investors get a lot of pitches, so don’t expect them to respond right away! If you have a great idea, it’s time to get out there and make your pitch. Send the perfect email introducing how investing will benefit from this opportunity for years into the future!


To sum up, everything we’ve covered, you want to make sure that when pitching your product/service – the information is concise and understandable while giving enough detail for someone to get excited about what it does or how it works without overwhelming them with too many technical words etc. Remember that many, many factors go into making a successful pitch – but through following the golden rule—practice makes perfect!

Who are venture capitalists? 

And what do they want from startups?

The first question is easy – venture capitalists are investors who invest in private companies. They take a percentage of ownership in the company and help it grow by providing money, experience, and resources needed by growing startups.

Most early-stage investments are made through funds run by professional VCs. These people usually have at least ten years of experience working with startups, so when you’re talking to one of them (in the context of funding round), remember that you’re talking to someone who has a decade or two worth of advice they can share with you about how to succeed as a startup.

That should be motivating enough to impress VCs – if any of this sounds like “a challenge,” remember that VCs see thousands of startups a year, and they’re not just going to throw money at everyone.

If you impress them enough with your team, product, traction, and overall potential, it should be obvious why they would want to support your business. 

What Are The Things Venture Capitalists Look For In Startups?

Here are the most common points they consider:

1) Market Size and Growth Potential 

Venture capitalists want to invest in your idea only if they know there will be many people using the product. They need to see how much potential for growth you have and its size as well.

2) Business Model 

When starting a business, there are two types of models you can work with. You could start an online or offline business, and the choice is up to personal preference! However, investors might ask what you plan to do with their money once they provide funding for your company.

3) Team 

Having a good team is the most important thing for VCs. Teams that can execute what they intend to do are attractive to them, and those who can’t will have difficulty raising funds with their business plans. 

A track record of past successes is also an attractive factor for venture capitalists, but it doesn’t mean that you cannot get investments from VCs if you don’t have any success in your background. 

Rather, some investors take great interest in startups led by experienced entrepreneurs because they already have ideas about building a startup into a great company even without prior success records.

4) Competitive Advantage 

What makes your product different from others? Competitive advantage could be identified in various aspects such as business model, technology, or market factors.

5) Investor Track Record 

Investors with a good track record in the past are more attractive to VCs than new ones without any portfolio successes. New investors can still raise funds, but it is much more difficult because they don’t have an established reputation or know what makes these companies successful.

Last Thoughts

You should not be intimidated by the idea of competition because it is good for you. Investors will ultimately give more attention to companies with competitors, and if there are more startups, they’ll have higher valuations on average.

Therefore, do not spend too much time worrying about other startups because you will not delay the inevitable. Instead, build something great, focus on your product and show it to investors. 

Venture Capitalists are looking for opportunities to have that “big idea” breakthrough; however, it is sometimes better to solve a smaller problem with wider appeal. Chances of success might be slim, but the reward can also be great – and more likely than not, you’ll make your investors happy in return!.