1/ Optimising legal execution of startup docs should be easy. Here goes:
2/ Make sure your term-sheet is a detailed as possible. It’s THE reference.
Have clear execution outline - which docs required by when, is there legal DD?, do investors need to call capital?
Roles well defined upfront - notably: is company counsel drafting or investors’?
Have clear execution outline - which docs required by when, is there legal DD?, do investors need to call capital?
Roles well defined upfront - notably: is company counsel drafting or investors’?
3/ Flow of transaction documents:
A// Full first drafts sent out
B// Complete list of comments and issues on all docs returned to other party
C// Formal written response to whittle down list of open issues
D// Stop the emails and hop on a all-hands call to hammer out the list
A// Full first drafts sent out
B// Complete list of comments and issues on all docs returned to other party
C// Formal written response to whittle down list of open issues
D// Stop the emails and hop on a all-hands call to hammer out the list
4/ your objective should be to nail all docs in 2 weeks max.
Disclosure letters usually trip companies up - take time to produce.
Reps and Warranties tend to be overly negotiated, usually by company counsel (pro tip- they never get used).
Disclosure letters usually trip companies up - take time to produce.
Reps and Warranties tend to be overly negotiated, usually by company counsel (pro tip- they never get used).
5/ two easy fixes to many issues here:
A/ don’t let lawyers run away with the process — their job is to protect you against risk but also to avoid liability - so take more risk than counsel tells you to (I do all the time)
B/ produce agreed and brain dead simple cap table early
A/ don’t let lawyers run away with the process — their job is to protect you against risk but also to avoid liability - so take more risk than counsel tells you to (I do all the time)
B/ produce agreed and brain dead simple cap table early
6/ on that last note - I’m always amazed by how freaking complicated people male cap tables and how much time this wasted.
You need an EXACT registry that allows everyone to easily see names, legal entities, shares types and exact allocations.
But cap tables are trivial.
You need an EXACT registry that allows everyone to easily see names, legal entities, shares types and exact allocations.
But cap tables are trivial.
