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The Secret Sauce Audit for Startup Companies


No offense. You have ants in the kitchen. Your company’s secret sauce is nearby and it’s delicious. A few ants have already had a taste, and they are communicating with any other ants that will listen about where to find the good stuff. The colony is nearby and it is only a matter of time before this stuff is freely accessed by everyone. These first ants are building chemically illuminated pathways directly to your most treasured company assets for their friends. You haven’t had time to keep a clean kitchen in your startup, so you can continue to keep a dirty kitchen and wait for the inevitable future at your peril.

Who are these ants? The ants could be employees that tend to talk, soon to be ex-employees that will work for a competitor, hackers that can exploit vulnerabilities in your IT systems, corporate directors that aren’t good at keeping a secret, industrial spies from your favorite nation state, employee spouses that like to brag, interns that do not understand the consequences of sharing or information theft, ex-employees and vendors that still have access to your systems, or many other possibilities.

Before you can adequately protect your secret sauce, you need to figure out what it is. The basis for your secret sauce is typically something confidential, e.g., information, processes, inventions, software code, customer lists, or competitive strategy. By the time the secret sauce gets shared with the whole ant colony, it’s no longer secret and has lost its value.

You need to thoroughly look everywhere in the kitchen to get a handle on composition and location of the secret sauce. Make a log. Figure out what is core to the business and what is ancillary, as some of your treasured assets will require greater protections. Figure out which sauce is protectible legally and technologically. Understand who contributed to the creation of it and whether all of the secret sauce is properly codified in the company’s records, or if it still resides in minds of the creators who could leave the company at any time. Figure out if the company has properly documented rights to the secret sauce. Then, bring this list to your Patent/IP attorney, as this is only the start of a long process to secure your company’s assets.

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At silverlegal, we like to use everyday language to help you understand your legal risks and make better decisions. While you can do your own secret sauce audit without an attorney, silverlegal helps business owners conduct a secret sauce audit for a flat fee. Schedule a consultation today.

This is the second blogpost in a series about confidential information. The first post can be found here. If you enjoyed this content, sign up to be notified when silverlegal releases new free content or request a consultation with silverlegal to learn about the benefits of a dedicated attorney-client relationship for your startup or small business at a flat monthly fee.

This is legal advertising and is not legal advice. This content cannot take into account your specific facts and circumstances. Speak to a qualified attorney about your situation.

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