Startups need to consider a lot of risks when thinking about financial technology. In a recent interview with Legaltech News, Erin Fonte, an attorney at Dykema Gossett, explained that many tech companies—located in places like Silicon Valley; Austin, Texas; or North Carolina’s Research Triangle—often will try to build new products out as quickly as possible. It is known as covering the basics of their “minimum viable product” (MVP) roadmap, she said.
“Companies think that they will come back later and fix some of the legal niceties once the product has legs and a user base,” according to Fonte. “However, we caution startups that if you are getting into the world of financial technology, understand you are entering a highly regulated space where … federal and state regulators are focused on the underlying activity that you are engaged in. Failure to make your products compliant by design and address these issues on the front-end can have serious consequences on the back-end.”
