From your question, I assume there would be no big haggling over deal points. In that scenario, if you as a founder are pretty familiar with the pluses and minu

From your question, I assume there would be no big haggling over deal points. In that scenario, if you as a founder are pretty familiar with the pluses and minuses associated with the various early-stage startup investment options (bridge notes, common stock sales, and preferred stock sales), and if you understand securities laws and basic tax issues connected with the various options, the templates might be used in order to save costs. Even then, however, it is not wise, in my judgment, not to at least consult with a knowledgeable lawyer as a double-check on what you are doing. I think founders get a far better deal on price from lawyers than they used to, and this is in part owing to the prevalence of templates freely available on the web. But, unless you want to fly blind in some pretty complex areas, I wouldn't recommend dispensing with formal legal help altogether. Specific pitfalls will vary with the type of funding you may be doing but usually they involve securities law and tax issues or just not understanding the range of things that can happen (e.g., with a convertible note, if the note converts automatically into preferred stock at a pricing discount and subject to a valuation cap, all well and good, but what happens if the startup never does such a funding and gets acquired at a premium with the notes never having converted? does your dad or other family member then get his money back with a couple percent interest while others get a 10x return even though he took the biggest risk of all in being early in the game with hard cash needed by the company - this is just one item that founders often fail to consider in structuring the seemingly simple convertible bridge notes - and the issues and contingencies get much more complex when preferred stock is involved). My advice: even in simple cases, double-check with a lawyer but make sure it is one who will approach the simple funding in the spirit of a simple funding and keep the costs in line accordingly. BTW, if by "open a company," you mean do the initial company set-up itself on their own, of course founders can but here too they can easily get into trouble by not understanding the range of issues they need to deal with (see, e.g., my comment to a post entitled "how I incorporated myself" from a few weeks ago: http://news.ycombinator.com/item?id=1924719 http://news.ycombinator.com/item?id=1924719).