The legal procedures necessary for establishing a startup are considered the first and most important steps entrepreneurs have to take. However, when it comes to law firms specializing in the needs of companies taking their first steps, there is a dearth of help available.
To tackle the issue, Sherif Hefni, founder of the legal services company Levari, decided to devote part of his company to the entrepreneurial sector, offering legal advice and help with procedures that go with establishing their companies.
After working in the UK for five years as a lawyer, then with the UN’s International Labour Organization in Geneva, Hefni moved to Egypt with international firm Crowell & Moring.
Time spent working within the Egyptian market soon alerted Hefni to the obvious lack in the lquality of legal services offered to startups in the country. To bridge this gap Levari’s services were launched in November 2012, in partnership with Pitmans, an international law firm specializing in providing services for companies.
This partnership provided Levari with the opportunity to serve Egyptian entrepreneurship, both locally and internationally (through its British partner), promising entrepreneurs a safer future for their companies if they decide to scale their products or services globally.
A much needed service
As a lawyer specialized in mergers and drafting of investment agreements, Hefni’s firm makes it easier for entrepreneurs to network with international investors. In cases of foreign partnership, Levari provides partnership contracts governed by the British law, which Hefni deems "more capable of protecting the rights of all contractual parties than the Egyptian law."
Hefni also shows entrepreneurs global success and failure stories, and enables them to network with those who’ve lived these experiences, in order to widen their horizons and expand their knowledge and experience.
The young lawyer realizes that the entrepreneurship journey is one for which the connotation of poor financial resources beleaguers the beginners, but his firm offers services to educate people starting out, as to what is available. During an hour’s session “I discuss with them ways to gain radical solutions to their problems, and support them in their implementation on the ground,” Hefni told Wamda.
And the support doesn’t end there. The entrepreneur can get any legal advice over the phone, or over email. Past clients of Levari include social network content management company El Masna3; Offerna, a website for online group discounts; and Enodos, the management consultancy firm analyzing business data.
Ahmed Arif, founder of Opportuun, noted that Levari’s legal services contributed to the successful conclusion of commercial contracts for his product, Fresh Buzz. For his part, Abdallah Asal, founder of Offerna, noted that there are international business models at Levari that may contribute to his company’s expansion plans in the future.
Engaging with the entrepreneurial community
In order to ensure engagement with the entrepreneurship community in Egypt, Levari has representative at the headquarters of business incubator Flat6Labs in Cairo for four days a week to support entrepreneurs free of charge.
Meanwhile, Hefni is still careful about the number of startups he responds to each month. "I give a lot of attention to the quality of service and the value of time. Therefore, in order to efficiently support entrepreneurs, I believe that focusing and succeeding with a limited number of startups is better for everyone.”
Mistakes entrepreneurs are making
Based on his experience with entrepreneurs in the past two years, Hefni noticed some common mistakes:
- Do not assume what the requests of the potential investor are and start working on them before the investor actually exists, because every investor has different plans, visions, and aspirations.
- Do not start your project with more than you can afford, because it may take longer than you expect to find the anticipated funder.
- In order to establish a startup, you should get the help of an auditor and a lawyer so that you do not face paperwork problems in the future.
Henfi confirms that based on his direct work with investors both in Egypt and abroad, he does not advise his clients to fund projects that are legally or financially incomplete. Hefni blames some law offices and firms in Egypt for their "failure to clarify the legal points of view enough to entrepreneurs."
For those reasons, Levari relies on its conventional legal activities in Egypt and abroad to achieve returns, since the line of services in the entrepreneurship sector is not based on profit.
Hefni calls on major law firms in Egypt to join the entrepreneurship sector in a strong manner, in order to fulfil its needs and support entrepreneurs, describing startups as "the safe exit that will save the Egyptian economy from its current distress."