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If everyone is up-front about the legal fees, what does it matter? The legal fees are paid after receiving the investment. If you negotiate for a pre-money val
by fragsworth 13y ago
If everyone is up-front about the legal fees, what does it matter?
The legal fees are paid after receiving the investment. If you negotiate for a pre-money valuation, and the terms require you to pay the legal fees, you simply take it out of the valuation.
The VCs can offer slightly more money and have the company pay the legal fees, or offer slightly less and the VC can pay the legal fees. There is no difference between these two things.
- shimms 13y ago"The legal fees are paid after receiving the investment" May be the case, but unless you can negotiate a deal with your law firm that the fees are contingent on closing, if the deal falls apart you've still got the legal fees to pay, and no investment cash to pay them with.
- fragsworth 13y agoThat's only true for your own legal fees. If the deal falls apart, you don't have to pay the VC's legal fees.