> The financing docs don’t costs hundreds of kilobucks, more like an outrageous 20K or so (with the investors’ lawyers’ bill coming out of proceeds — scandalous, as that’s what the 2% management fee is for!). An acquisition can cost a lot more.
One distinction I should have mentioned - the vast majority of my deals use LLCs to raise capital. That increases the number of points that need to be negotiated by probably two orders of magnitude compared to an investment in a Delaware corp. Way more efficient to rely on the corporate code, fiduciary duties and non-waivable duties of care than to re-invent virtually every component of economics, governance and control on every deal. Yet here I am…
But of course, another part of the reason the bill is so high is because we’re not just copying and pasting disparate provisions - we’re making sure the doc matches up with the commercial deal. But yeah, you could half-ass an LLC agreement in an afternoon, and it’d be good enough 90% of the time probably.
You shouldn't need a partner for this kind of deal. In fact, startups should never have to pay for partner time and I never have at a company with less than about $50MM in revenue (even with firms like Gunder, Cooley, Wilmer, MoFo etc).
One distinction I should have mentioned - the vast majority of my deals use LLCs to raise capital. That increases the number of points that need to be negotiated by probably two orders of magnitude compared to an investment in a Delaware corp. Way more efficient to rely on the corporate code, fiduciary duties and non-waivable duties of care than to re-invent virtually every component of economics, governance and control on every deal. Yet here I am…
But of course, another part of the reason the bill is so high is because we’re not just copying and pasting disparate provisions - we’re making sure the doc matches up with the commercial deal. But yeah, you could half-ass an LLC agreement in an afternoon, and it’d be good enough 90% of the time probably.