DO’S AND DON’TS• DON’T use Legal Zoom or DIY (except maybe Clerky, with some assistance)
• DON’T go for the fancy stuff you saw online (blogs, etc.)
• DON’T ‘delegate and forget’
• DON’T pay everything up front
• DO engage experienced startup lawyers, someone you feel comfortable with
• DO understand how law firms staff your account
• DO shop around, compare quotes [and negotiate rates before engaging]
• DO learn how best to interact with your lawyers to minimize ‘fee creep’
• DO use electronic signature platforms whenever possible
• DO get and review invoices monthly, even if on fee deferral
• DO learn how to read and understand term sheets and cap tables
WHAT SHOULD STANDARD STUFF COST?• Incorporation
• $2.5k - $5k
• Conversions from foreign structures are NOT STANDARD and cost more $$
• Note Financing
• $5k - $15k
• Seed Financing
• $10k - $20k
• Series A Financing
• $15k - $25k +
• Will often depend on what fee cap investor counsel negotiates
QUESTIONS TO ASK BEFORE ENGAGING!• Startup experience? Get a list of clients/references.
• Industry experience? Represent VCs as well? Can make connections?
• Full list of services that will be charged?
• Rates for lawyers and other staff members?
• Full service or specialty?
• Who will be your main point of contact?
LAW FIRM HIERARCHY; YOUR GO-TO PERSON• Partner
• Negotiate term sheets
• Strategy decisions
• Introductions
• Associate
• Most everything else• Paralegal/Legal Assistant
• Records and paperwork
• Cap table maintenance
• Logistics questions
• Secretary
• Scheduling
WHAT WILL COST MORE BUT MAY BE NEEDED?• Cleanup of previously screwed up work (big one!!)
• Deviations from standard documents
• International work (can be time consuming and expensive)
• Converting corporate structures (really varies by country)
• Intellectual Property work
• Employment work
• Other custom work (e.g., fancy vesting schedules)
THE MORE CUSTOM WORK, THE MORE EXPENSES!
STUFF TO NEGOTIATE NOT PAYING FOR!• Internal conferences or discussions
• Copies and general office services
• Standard postal services
• Records maintenance
• Standard geographic area travel expenses for meetings
• Training of junior associates
FREE 500 FORM FINANCING DOCS (THE KISS)• 500.co/KISS
• Two forms:
• Convertible Equity (no interest, not callable on maturity). Similar to YC SAFE.
• Convertible Note (interest and repayment features)
• Designed to be used as a “series” so you can raise a round on same terms
• Designed to be a bit more balanced from an investor/company standpoint
• Available on Clerky, CooleyGO and Shake, but you should complete with your lawyer