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You need good advisors who are experienced entrepreneurs. I had an experienced and well-recommended startup lawyer completely overlook a bullshit clause in a t
by nikcub 15y ago
You need good advisors who are experienced entrepreneurs.
I had an experienced and well-recommended startup lawyer completely overlook a bullshit clause in a term sheet which he said was 'complete standard'.
it was a friend of mine who had experience with similar who pointed out everything the lawyer missed
- arethuza 15y agoWe had pretty good lawyers, but we got the best advice from a couple of guys who had founded and sold their own companies years before and who still had the scars. In my experience, I thought the lawyers sometimes played the whole exercise like an intellectual tennis match - whereas the guys who had been the same process with their own skin in the game could give much more directly useful advice. For example, a couple of days before our first round of investment one of these guys told us "you do know you'll be expected to sign personal warranties to the investors" - something our own lawyers had managed to forget to mention (and strictly speaking they might have been right as they were, of course, the company lawyers). NB Personal warranties seem to be (were) a common thing required in the UK - I believe they aren't used in the US. [Edit: I suspect we were made to do quite a few things that would look crazy to folks from the US - our first round of investment was in '97, hopefully things have got a lot easier in the UK for startups.]
- arethuza 15y agoJust to clarify - I was talking about a pretty standard VC investment, not PE. Serves me right for not reading the article :-)