4 ms·
> Is a lawyer even the right person to look for? It's very tricky. If you find a lawyer that sees many deals, then he/she likely knows many VCs and knows who
by jpdoctor 15y ago
> Is a lawyer even the right person to look for?
It's very tricky.
If you find a lawyer that sees many deals, then he/she likely knows many VCs and knows who butters his bread.
If you find a lawyer that doesn't know many VCs, then they likely don't know as well the in's and out's of term sheet tricks.
More fundamentally, the problem is that founders are technical (by and large), and they are up against people who do term sheets for a living. It is a very asymmetrical-knowledge situation.
- chernevik 15y agoI would expect a banker / financial advisor to pick up on value and risk points. A really good, experienced lawyer should, but it isn't entirely in their expertise. (BTW, if the lawyer does see a lot of deals, I would wonder how much of their business is representing investors, and how that colors their thinking. Their duty is to their client, but it's just human nature to see things in the same terms as your client base.) These negotiate for a living, but investors shouldn't be intimidated. Take your time, think the thing through. DO NOT BE AFRAID TO SAY NO. Always have a plan to walk away, and never get committed beyond your comfort with the terms of the deal. Always have some plan to bootstrap, if only to prevent psychological commitment to _this_ funding deal. I'm sure the fundraising process is a pain, but a lot of the preparation and strategizing is stuff that management should be doing anyway.