Startups

A startup's R&D claim can change size quickly: a round of hiring, a new product, a pivot. A percentage fee follows the claim up, for what may be much the same adviser work, and a cap is the term that stops that. Cash matters too: a fee due on filing is paid before the benefit arrives, and a fee due on receipt is paid from it. And a startup is the kind of business where a reduced claim hurts most, because the benefit may already have been spent; who pays the repayment, the interest and any penalty is a question for your country page, and what the fee does is a question for the letter.

• What happens to the fee if the claim is reduced?
• When and how is the fee paid?, on filing or on receipt
• How are your fees calculated?, with a worked example at double the claim you expect
• Do you claim every year by default?

Uncapped success fees on a claim that could double. Automatic renewal clauses with a long notice period, signed in year one and forgotten by year three. Neither is a problem in every case: a cap changes nothing for a claim that will stay small, and a rolling engagement can suit a business that values continuity. The question is whether you know what you have signed.

Contingent success fees suit a business with little cash and an uncertain claim. Capped fees keep that and add a ceiling: on the shared example, 20% capped at $60,000 is $50,000 on a $250,000 claim and stays at $60,000 however large the claim grows, with the cap reached at $300,000. Deferred fees move payment to when the benefit arrives, at a price. Hybrid fees trade a fixed element for a lower rate. Compare each at this year's claim and at next year's, if the business grows as planned. Illustrative figures.