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02/24/2010

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bob dolan

It would great to have a short FAQ that covered some of the most common terms that were included or omitted and why. You've obviously done a lot of thought about what was essential and what not and this would give confidence to users without having an attorney reanalyze, but rather contribute as to whether these documents will fit the bill for the specific situation.

I would be interested to see the names of companies that adopt these documents.

We've all spent numerous weeks and dollars on setting up companies. This is a great contribution to accelerating (early) success. Thanks.

Jonathan Hirshon

This is truly a wonderful service to the community - I salute you and will recommend it to ALL my startup clients for their perusal and use! :)

Cheers, JH

Mike Hassett

Efficient and economical for angels and entrepeneurs, kudos! Two questions:1. Antitrust -just posting open source forms and encouraging use as a starting point would be a non-issue. Encouraging a no-negotiation, just fill in the blanks approach, then enlisting an honor roll of angels to use the forms might be problematic. Consider the entrepeneur who, for whatever unique reason, can't live with one of the standard terms in the form. Will he or she be turned away by every angel on your list because all are committed to the economy of using the "pure" form? Sounds a little like a group boycott. Even if the forms are "fair" (is there an objective "fair", or is just today's "market"), it's not an antitrust defense. Your firm knows far more than I about antitrust, what do you say to a client with this concern? 2)any thoughts or news on form packages for L3Cs or other not-for-profit/profit hybrids?

Wyatt

This is quite useful, at the very least as a flexible guide. BY contrast, to quote a Venture Hack; "GET A LAWYER". Thank you for this generous service!

Matrix2007

Excellent tools !
Thank you very much !
Connect me by any means.
All right ?
Jg

NicolasVDB

This is great!
It should have been created a long time ago, it now seems so obvious, thank you Ted for this great service to the Tech world!

I'm in the process of raising a seed round, I'll do my best to convince the investors to use these docs.

Actually, as next step, it would be great if you could provide open source docs for all the other usual suspects: stock option plan, stock option agreement, NDA, employment letter, etc

Any chance for that?

Roman

I wholly agree that simpler documents need to be used in smaller rounds. The portrayal of such docs as easy that only require to "fill in the line", however, gives the entrepreneur a false sense of security. And unfortunately, many will be enticed to use these docs without the help of an attorney, while the investors will have attorneys on their side making sure the terms are favorable to them.

As an attorney to tech start-ups I fixed quite a number of broken self-handled financing rounds at a significant cost in both $ and terms. In numerous instances, however, the founders dealt themselves a lethal blow (to the delight of later stage investors) from which recovery was impossible.


Roman

Yegg

Ted, not sure the best way to contact you, so I'll leave a comment here. I just closed an angel round (that I led on the angel side) using the series seed docs in pretty much verbatim form. Super helpful, thx. Upon review, we noticed a few minor things you might want to take a second look at it.

--On the COI, 1.3.2 you reference a non-existent Merger Agreement. We changed to "agreement or plan of merger or consolidation for such transaction"

--On 2.3(b) I like your language but "of Common Stock or Preferred Stock (or any series thereof);" However, it does not match with the term sheet language "; (ii) change the authorized number of shares of Preferred Stock; (iii) authorize any new class of series of Preferred Stock having rights senior to or on parity with Preferred Stock; (iv) ". Can you reconcile?

--Is there a reason you left out boiler plate stockholder and director consents? Those would have been useful.

--Finally, on the term sheet I'd consider adding (optional) binding Exclusivity and Confidentially clauses, which we did.

Thx again,

Gabriel, http://ye.gg/

Ted Wang

Thanks for your helpful comments! Glad you found these useful. I am working on a bug fix release and will review all of these changes (I've got a handful of other nits). Board and SH consents are a good idea and are on my roadmap.

Good luck with your company.

Bert

Actually, as next step, it would be great if you could provide open source docs for all the other usual suspects: stock option plan, stock option agreement, NDA, employment letter, etc http://www.rapidskunk.com

Dennis Meharchand

So that's how its done in Silicon Valley. Great for investors and perhaps fair for entrepreneurs. As an Entrepreneur I have a much better appreciation for our lawyers who drew up a set of documents where our investors have absolutely no rights whatsoever. I especially liked the Voting Trust and Power of Attorney giving Company Management right to vote for all shareholders in any matter. "Investors will sign this?" I asked. - Lawyers - "You don'twant to be running around asking for permission on anything especially at an IPO or Acquisition event."

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