Education has evolved beyond the traditional classroom. Technology has impacted education to facilitate more creativity and imagination, which is where edtech startups come in.
Today, it’s easier than ever to complete online courses to achieve your goals, too.
With such a strong and rapidly growing market, it’s not uncommon for entrepreneurs to want to enter it. If you’ve got an idea for edtech, here are some tips for launching your own edtech startup.
What Is Edtech?
The term edtech has been engineered by combining the terms education and technology, which is exactly what edtech is. It is a startup education business that uses technological innovations to provide its customers with a modern and efficient learning experience.
The edtech market covers a broad range of services. You have probably come across apps that teach languages or maths, online courses, interactive simulations, plagiarism detectors and remote tutors – all of these and more arel part of the edtech industry.
How To Start An Edtech Startup
The edtech industry has a large and growing presence in the market. If you’re thinking of joining it, then great! However, there are a couple of matters you need to consider as you begin to launch your startup – we’ve compiled a list of some key ones below.
Edtech Startup Business Plan
One of the most important parts of starting any kind of business is the planning and research. It’s better to put all of that work in one place, usually known as a business plan.
A business plan contains any information you have on the market, competitors as well as your product or services. Business goals, financial plans and objectives are also often placed into the business plan.
A good way to characterise a business plan is a blueprint for your business journey moving forward. It makes it a lot easier for startup founders to track their progress and see whether it is realistic to achieve their goals.
If you plan on inviting investors to raise capital, they will likely want to see your business plan, so it’s great to make this as detailed and well researched as possible. This means you may also wish to attach a Business Plan Non-Disclosure Agreement to protect your inside information from unauthorised third parties.
Your business plan will usually contain some of your biggest trade secrets or keys to your intended success – you don’t want that secret recipe falling into the wrong hands!
Register Your Edtech Startup
Once you have your plan in place, you’ll need to register your business.
While all businesses need to have an Australian Business Number (ABN), other aspects of the registration process might look different depending on which business structure you choose.
The taxes you need to register for will also differ slightly.
How Edtech Startups Get Funding
Like any other startup, you should consider how you will finance your venture. We mentioned investors earlier, which can be a big help in the early stages of your business.
You might also consider bootstrapping, taking out loans or applying for grants. There are a number of different options when it comes to funding your startup. Carefully research each one and see what will work best for your business.
Managing Edtech Startup Competition
Naturally, the market will be filled with competition. In order to manage this, you will need to assess what your competitors’ strengths and weaknesses are, then see how you can develop your products, services and business model to combat this.
It’s common business practice to have certain legal documents to minimise your competition, as well. For example, startups may insert Non-Compete Clauses in their employees’ agreements to ensure they do not work for your competitors shortly after their employment with you, as this could compromise your inside information and other trade secrets.
However, Non-Compete Clauses need to be drafted fairly (in other words, they cannot breach the law of unfair contract terms).
You may also wish to have Non-Disclosure Agreements (NDAs) to protect your business.
Legal Documents For An Edtech Startup
At times, startups make the mistake of getting caught up in the business development side of things and they forget about their legal obligations.
It’s important to remember there are a number of legal agreements you will need to legitimise your business operations and help protect your startup.
Let’s go through some key legal documents below.
If you’re hiring staff to help you run your edtech startup’s activities, you’ll need to have an agreement in place that sets out the details of their employment. This is known as an Employment Contract.
For example, it should detail how much they will be paid, their leave entitlements and other key aspects of their employment with you. It should generally set out their minimum entitlements in compliance with the National Employment Standards or their modern award.
Alternatively, startups may choose to engage contractors rather than employees. Contractors are not entitled to the same things as employees, such as minimum wage under the National Employment Standards.
Contractors are also responsible for their own insurance and tax. As such, these details should be set out in a Contractor Agreement.
Working With Developers
If you’re building an app for your edtech startup, you may be engaging software developers. If this is the case, you need to have a Developer Agreement to set out the details of your arrangement.
For example, who owns the IP created? What happens if the work isn’t complete to the expected standard? When should the software be completed?
Depending on what you’re building, there could be more ground to cover. Chat to an expert lawyer today to learn more.
Employer Obligations In An Edtech Startup
When you become an employer, there is a certain standard of care as well as a number of legal obligations that are owed to your employees.
Firstly, it’s your duty to ensure that you employees are receiving the entitlements, pay, leave and breaks they are legally entitled to. If you are not sure about what these are, you can always check out the Fair Work Australia website for more information.
Alternatively, you can chat to one of our Sprintlaw lawyers about which modern award applies to your workers.
You also need to be aware of your workplace health and safety (WHS) obligations. Safe Work Australia sets out what is expected of employers when providing an environment that is free of harm for their employees.
Whether your employees work remotely or in an office space, it’s important their physical and mental wellbeing is being protected.
Protecting Your IP In An Edtech Startup
Protecting your intellectual property (IP) is essential when running any kind of business.
Your edtech startup may have a trade mark, patent, trade secret or copyrighted materials that are key to the business’ identity and success. The best way to protect these is through legal agreements such as Non-Disclosure Agreements or registering trade marks and patents with IP Australia.
Talk to our team of IP legal experts for more information.
Licences And Qualifications
Prior to launching your startup, it’s important to find out whether you will need any licences or qualifications. For example, if your edtech startup focuses and teaches educational courses, you may need to attain a particular qualification first.
The same applies for licences – the undertaking of particular activities may require permission from an authority. Be sure to attain this first so you can avoid trouble for your business down the track.
Running An Online Edtech Startup?
If your startup is going to be online, either partially or entirely, then there are certain legal documents you will need that are catered for the online presence of business. We’ve listed some of the most common ones here.
Online Business Terms And Conditions
Website Terms and Conditions give the owner of the website more control over how they can operate that space. Terms and conditions can be seen as a legally binding agreement that all users agree to when they enter your website.
They dictate the conduct that is acceptable on the site and your authority over the website, allowing you to remove anything inappropriate or make adjustments where necessary.
Terms and conditions can also limit your liability for anything that goes wrong on the site.
Do I Need Disclaimers In An Edtech Startup?
There is no strict legal obligation on your part to have a disclaimer. However, some businesses still like to get one to increase their protection and minimise their liabilities.
A disclaimer can be used to deny legal responsibility for something (however, this has to be reasonable). Disclaimers can also act as warning for the consumers using the product, providing them with caution regarding a particular risk.
An edtech startup produces an educational tablet that has smaller sized bits, such as a stylus pen and eraser. They’ve placed a disclaimer on the box of the product warning others of the hazards with small products and denying their legal responsibility for this.
Limit Your Liability
We’ve discussed a few legal documents such as disclaimers and touched on how they can aid in limiting your liability. There are also a number of other ways you can work to limit your liability. First, it’s important to understand where the risk of liability is the highest.
Liability is your legal responsibility and duty to keep another party free from harm. Business owners usually have a duty towards their employees, customers and the general public that can be impacted by their business activities.
The most important factor when it comes to liability is cultivating safe business practices. The second is legal documentation. Limitation of liability clauses and exclusion clauses work to place a cap on the amount of damages payable, the time in which a claim can be brought forwards as well as the types of instances which can constitute a liability.
You may want to look into getting insurance in case something does go wrong-. This way, you will be covered financially.
Launching an edtech startup can be a worthwhile business venture, so it’s important that you do your research and get the right legal documentation in place first!
To summarise what we’ve discussed:
- Edtech is the combination of technology and education
- When starting an edtech business, register it and ensure you have a business plan
- Make sure you research how you will fund this venture
- Have all your legals sorted including employer obligations and documentation
- Get any relevant licences or qualification and start the process of protecting your IP
- Be sure to plan and prepare for your potential liabilities
If you would like a consultation on launching an edtech startup, you can reach us at 1800 730 617 or email@example.com for a free, no-obligations chat.
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