Series Seed, everywhereBy http://profile.typepad.com/1237764140s22740 // March 21, 2013 in Legal Docs, Seed Financings
Yesterday I was critical of a template inventions assignment agreement, and suggested that state-by-state differences make standardizing employment documents difficult to pull off.
I want to circle back to Ted Wang's Series Seed Equity financing documents today, by way of being positive of the prospects for document standardization in other key areas.
The Series Seed templates are good and they're gaining traction. The AngelList Docs service offers them in a modified version, and it looks like a new, 3.0 "official" version of Series Seed takes advantage of and adopts those AngelList mods.
What's more, the Series Seed document repository has moved to GitHub. I'll bet this move will facilitate not only better dissemination, but communal iteration of the templates, too.
Docracy has posted the Series Seed 3.0 documents as well.
I use and recommend the Series Seed documents for seed financings where the parties agree to price the deal. And I'm noticing and hearing of other law firms that are using the vehicle.
For one thing, on core, corporate organizational issues, on relationships among companies, boards and shareholders, lawyers across the country can standardize against Delaware law.
Though you never bypass state anti-fraud authority, it also helps that virtually all seed financings are structured to meet the standard, federal 506 securities registration exemption.
In short, the law you are standardizing around is the same as to most (all?) of the key issues to address in an angel seed financing.
Do legal costs for a seed financing plummet - can a lawyer meet Fred Wilson's $5,000 seed financing legal challenge - using the Series Seed templates?
Yes and no.
AngelList says the Wilson Sonsini firm will that's isn't a company using the Series Seed documents in a seed financing, for free. But you have to be a client of that firm, and there is probably some fine print.
My fine print is that first time entrepreneurs can easily overlook the distinction between work to organize the company, and the financing transaction - they often blend the two efforts into the same project ("legal stuff").
In other words, if you are doing foundational things - like getting inventions assignments in place for founders! - at the same time, you won't get the seed financing done for under $5,000 in legal fees (unless you're working with one of those firms that provides start up services for free).