Tag Archives: lawyer

Model Series Seed Docs

“The Series Seed Documents are a standardized set of documents that can be quickly and easily deployed for a seed investment: to help get a company financed properly, legally, quickly, and intelligently.”

The drafters, Fenwick & West and Andreessen Horowitz, imply these docs should be used for $500,000 to $1,500,000 investments. The drafters are “open sourcing” the documents so that they may be continually improved by the startup community.

The Series Seed Documents include:

(1) Amended and Restated Certificate of Incorporation

The Amended and Restated Certificate of Incorporation includes the typical provisions you might find in a VC deal, less (i) preferential dividends, (ii) redemption rights, and (iii) price based anti-dilution.

The board is set up to consist of 3 directors: 1 director elected by the common (founders); 1 directors elected by the preferred (investors); 1 “independent” director (i.e., the CEO) elected by the common via fiat in the Investors Rights Agreement.

(2) Series Seed Stock Preferred Stock Purchase Agreement

The requirements of various closing conditions, an officer’s certificate, a secretary’s certificate, and a legal opinion (from company counsel) have been dropped. The drafters also anticipate a management rights letter will be included in order to ensure “Venture Capital Operating Company” compliance for the VC investor(s).

(3) Investors’ Rights Agreement

The IRA does not provide for any registration rights. It also scales back the right of first refusal and jettisons the co-sale right. Lastly, the IRA contains a provision that the Series Seed investors should get whatever rights the investors in the next round of financing get.

(4) Term Sheet

The term sheet summarizes the provision found in the documents 1-3 above, but also includes a $10,000 legal fee reimbursement (cap) for investor counsel and a 4 year vesting schedule with double trigger acceleration for the founders.

Check out the docs here.

Going All In

I see a lot of entrepreneurs struggle with the decision to go all in and make their startup a full-time job (i.e. quitting your “Office Space” job). I had a similar decision when I decided to go out on my own.

3 years ago, I walked into Fidelity, cashed out all of my retirement funds (complete with penalties, taxes and crazy looks from the Fidelity employee) and started my law firm. Ironically, my new law office is located right next door to the Fidelity.

It wasn’t an easy decision at the time. I had a new mortgage and a 3-month old. But I figured there would never be that “better time” to start a new firm/company.

In retrospect, it was probably pretty stupid to launch a law firm without any clients or local contacts. But the back-against-the-wall nature forced me to work hard and give everything I had to my company.

I’d say about half of the startups I work for have founders with day jobs. And I don’t find anything wrong with that. We each have our own reasons, pressures, and risk tolerances. I respect decisions either way.

But there are 100 reasons why a startup can fail. And if you aren’t working full-time at your startup, there’s now 101.

Coworking Confidential

Last Thursday, I became the first lawyer to spend a day working from a startup coworking environment. (Well, I’ll make the claim until someone tells me otherwise.)

Coworking is a collaboration space for developers, writers, and independents. My coworking application was approved a few weeks ago, after I made the argument that a lawyer with a blog qualified as a writer and independent. Therefore, I re-arranged my schedule so that I could spend September 18th coworking. And I’m glad I did.

Here is the description about coworking provided by the Big In Japan Coworking wiki, which hosts the Dallas coworking space:

The Big in Japan Coworking space is an experiment and as a result we are not planning to charge tenants, instead we are attempting build an interesting ecosystem that is beneficial to our businesses as well as the businesses of the coworking tenents. We are attempting to help local startups that we believe have promise. The Big in Japan Coworking space is the first of its kind in Dallas, feel free to stop by to check it out!

Early Start

My coworking day started at 6 a.m. with a non-working breakfast with one of the three Big in Japan co-founders, Jason Hudgins. Jason and I ate at Denny’s on the other side of Stemmons Freeway (aka, “The 35E” for those from California like myself) from the coworking space. After settling our Denny’s debt, we arrived at the coworking space ready to cowork. Jason pointed me to a desk where I was to set up shop.

The Scene

The Big In Japan Coworking space is phenomenal. Think Chuck E. Cheese, but you are at work…and you don’t have to wear a rat costume. The open, collaborative layout complete with cable drops from the ceiling, includes about 16 coworking style desks (more on this below), conference room, bullpen area, foosball table, Wii (with rockband), conference room, and a scooter.

Why Lawyers Should Never Mess with WiresStartup lawyer at coworking

I must have spent the first half hour of my coworking experience just trying to plug everything in. And of course I did manage to unplug a few things, including Jason’s laptop, both of our work lamps, and presumably the VOIP phones. Somewhere in this catastrophe, I managed to break the AC adaptor to my VAIO laptop so I had to make a quick trip to get my MacBook. It was going to take more than a broken AC adaptor to deprive me of the coworking experience.

Fellow Coworkers

The desks at the Big in Japan coworking space are set up in quads. Two desks side-by-side and then put ‘cop-style’ against two other side-by-side desks. I sat diagonally across from Jason. Rylan Barnes, another 1/3 of the Big in Japan trio, showed up about a half hour later and sat across from me.

Creativity Abounds

The one thing I absolutely loved about the coworking environment is the creativity. The people and surroundings combine to create this “we will change the world” mentality. OK, that may be over the top, but remember that I am a lawyer and that colors, fun, and creativity are pretty much outlawed in the legal world.

And I didn’t let the creative environment go to waste when I asked Rylan and Jason an Android-inspired question: What if mobile phones could operate on 2 different operating systems, similar to how a Mac can run Windows? (Be sure to file that one between “Gore/Internet” and “McCain/Blackberry”)

What I Worked On

I spent my lawyering time reviewing and drafting documents for a couple client transactions. I obviously had to keep the client phone conversations virtually non-existent or find a secluded corner in the coworking space.

The Unanticipated 2-hour Lunch

Since we ate breakfast early at 6.a.m., the lunch place decision seemed a bit more important this day than most. My 2 fellow co-workers and I decided to head downstairs and eat lunch in one of the building’s two eating establishments. We were also joined by Brad Merritt, CEO of Whitebox. We all ate as fast as we could and made it back upstairs to the office 2 hours later. (Be sure to call ahead and place your order if you plan to eat lunch at the High Tech Bar at the Infomart.) Thankfully, Brad had a couple great startup stories to tell which made the wait time pass quicker.

The Rest of the DayBig In Japan Call
After lunch, I returned to more document drafting and review. I also managed to write a blog post about how I started my law firm. The post had been sitting in my blog as a draft for about 2 months and I finally cranked it out at the coworking space. Later in the afternoon, I got to sit in on a Big In Japan conference call (pictured to the right). I left that evening a true believer in coworking.