DISQUS

sean o'malley · 4 months ago

Chris, thanks for posting.

If you're like most entrepreneurs, dealing with legal firms for issues like company formation, financing and business contracts makes you cringe because you know it's going to hurt. I'm talking about your pocketbook. Hiring big law firms these days will cost you hundreds of dollars per hour and you're often handed a junior attorney that's learning the ropes.

For entrepreneurs with zero capital these legal doc's look like a good way to get started. For other entrepreneurs who have some capital it's probably worth finding an independent attorney who worked at one of the big firms but has struck out on their own...their prices are usually significantly less but you won't give up the quality.

Barnaby · 4 months ago

Awesome!
Lawyers are not worth what they charge, and if you're choosing between a piece of paper and 3 months of Ramen to fuel product development ... just copy and paste the paper from elsewhere, and revisit it when you're profitable.

Apolinaras Sinkevicius · 4 months ago

I can't agree with the statement that lawyers are not worth it. I have been running operations "nuts and bolts" of startups for 12 years already and I know there is no substitute for a good attorney. BUT, I also have spent some time working in a law firm (no longer there, and no, I am not a lawyer) and had very good view of some of those cleanups attorneys had to do pre-investment. It was not pretty. Entrepreneurs need to invest time educating themselves on legal issues. The more you learn, the less you will have to spend on attorneys.
That all said, you should not be paying attorneys to draft documents. You can save money by getting these boiler-plate docs, just like (...gasp...) many attorneys do themselves. Scribd.com and some other sites are frequented by associated who have to draft those docs. Find a good attorney and use them for direction and final document review.

scottmunc · 4 months ago

This is a great resource for entrepreneurs. Thanks.

maryanderson · 4 months ago

Entrepreneurs aim high in order to surpass their expectations.

iPhone News Alerts · 4 months ago

It's hard to finalize a contract without your lawyer at least reviewing it...

adbirds · 4 months ago

This is a great resource. I hope you will use it too.

Texsquire · 4 months ago

Most of the time, deals can be structured in a variety of ways, and companies can be established and formed in just as many. The key to not shooting yourself in the foot as you get out the door is to make sure you have proper advice in terms of structuring. This includes everything from tax advice to buy-sell triggers embedded in partnership documents. A little advice from a good lawyer can save you many times your initial investment. I am biased, of course, because I am a lawyer, but I will tell you now, I have had to "fix" so many bad entity structures before a liquidity event arises, such as an equity or asset sale, and it makes me cringe each time because, even though I love making money as a lawyer, I hate doing it where the client is having to fix something that should have been done right in the first place. It's a waste. One example is people in c-corporations with high built-in gains because their business was wildly successful- the c-corp structure subjects them to a 55% tax rate in the event of an asset sale (which is the typical sale form for small businesses- purchasers don't want the liabilities that come with equity). If they had been in a partnership they'd be looking at typically a 15% tax rate. That's quite a sum, and it's tragic to see an entrepreneur's hard-earned money go either to (1) Uncle Sam or (2) a lawyer so that the deal can be fixed on the back end. My advice- spend a little, get some good legal advice, and know you're set up great in the beginning. If you don't go get legal advice right from the start, then at least get it before you get too big to undo whatever missteps have been taken. Best of luck to all of the entrepreneurs out there!

Doc Johnson · 1 week ago

Totally agree with the idea that legal costs should be on the low end of the priority scale when possible. Barriers are typically well established without a massive legal bill.

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