Posted by KipMcC on 2009-08-28
The next time you talk to your law firm, let them know they should pioneer (be the first, take credit) the following concept:
Early-stage, cash-efficient start-ups increasingly require an equally efficient supply chain in order to make it work. Take for example Capital Factory, Y-combinator or even micro-style investments from more traditional VCs. A start-up raising $20k – $250k simply cant afford traditional legal costs associated with:
* equity and option plans,
* option grants,
* convertible debt agreements,
* all docs associated with being INITIALLY funded (term sheets, standardized series-A docs),
* separation agreements and release paperwork,
* contractor agreements, and so on.
I propose the following: forward-thinking law firms should create a FREE legal library that includes AT LEAST the items listed above. The should GIVE this library to start-ups that agree to become clients after a funding event of a particular size…maybe $250k or more. To be clear: I’m suggesting that law firms loss-lead with this free legal library and win clients that may become the next Google (or, realistically, may also go out of business). It’s time for the supply chain to evolve. we're starting to see some standardization of termsheets...now let's continue the thought.