Read on Twitter
I see lots of tweets seeking legal deal counsel either for a startup or VC fund. Here’s how to find the right one and avoid a costly disaster down the line 
1/X
1/X
2/20 VC and startup law is a specialized practice. Lot of lawyers and non-lawyers alike think that since it’s so early stage, can’t be that hard to figure out. And skills learned in one area easily transfer to another.
Yes and no.
Yes and no.
3/20 Litigators, IP (negotiate tech licensing deals, file patents and trademarks, etc.), labor, bankruptcy, M&A, IPO/Capital Markets, etc. lawyers are NOT venture capital/startup lawyers
4/20 skills learned in M&A, bankruptcy, cap markets are largely transferable. The top SV law firms take in many talented but jaded M&A lawyers from the top Wall Street law firms, but still take a few years to retrain them to this field.
5/20 intellectually, VC/startup law is easier than M&A.
Makes sense: billion dollar LBOs will be way more complex than a $30m Series A financing.
Makes sense: billion dollar LBOs will be way more complex than a $30m Series A financing.
6/20 but difference is experience: M&A doesn’t teach the “why” of what we do.
Why incorporate in Delaware?
Why C-corps?
What’s a management rights letter?
Why grant restricted stock instead of options?
When do you switch over?
When do you switch again to RSUs?
Why incorporate in Delaware?
Why C-corps?
What’s a management rights letter?
Why grant restricted stock instead of options?
When do you switch over?
When do you switch again to RSUs?
7/20 should founders/employees xfer IP to co?
How to manage cap table?
How to model financing round dilution? Option pool dilution?
How to model conversion of SAFEs/Notes?
What’s shadow liq pref?
How to price options?
How much equity to give advisor?
Many moar Qs
How to manage cap table?
How to model financing round dilution? Option pool dilution?
How to model conversion of SAFEs/Notes?
What’s shadow liq pref?
How to price options?
How much equity to give advisor?
Many moar Qs
8/20 if your lawyer doesnt know the answers to ALL of these questions, move on ASAP.
Guesswork on these Qs will CRIPPLE your co. You will pay for their time AND to undo their damage (if it can be undone).
And VCs won’t look kindly on you if your legal house isnt in order
Guesswork on these Qs will CRIPPLE your co. You will pay for their time AND to undo their damage (if it can be undone).
And VCs won’t look kindly on you if your legal house isnt in order
9/20 lots of attys out there. great VC/startup practices: fenwick, gunderson, wsgr, mofo, cooley, goodwin. cant go wrong with them generally.
expensive but $$$ now saves you $$$ in future. they also defer bill under you raise a round.
They WANT your biz and play the long game
expensive but $$$ now saves you $$$ in future. they also defer bill under you raise a round.
They WANT your biz and play the long game
10/20 best to avoid the most prestigious firms like skadden, cravath, etc. excellent firms, but don’t know how to do start-up, VC. Will cost you A LOT (if they take you as a client), but won’t know what they’re doing. Some exceptions (like Latham’s startup group), but few.
11/20 there are solos and boutiques out there. some excellent. Some so-so-. Some terrible and committing borderline malpractice.
12/20 OK so you’re looking for a lawyer. What do you focus on? EXPERIENCE. Prestigious law schools, clients you know, prestigious law firms, general legal experience are all signals, but not that helpful
13/20 
Focus on WHAT work they did for WHICH clients and for HOW long.
Do they represent Apple? Great. For IP work? Doesn’t count.
Are they claiming to have 10 yrs experience, but spent 9 yrs of it doing patent law? Not your lawyer.
Focus on WHAT work they did for WHICH clients and for HOW long.Do they represent Apple? Great. For IP work? Doesn’t count.
Are they claiming to have 10 yrs experience, but spent 9 yrs of it doing patent law? Not your lawyer.
14/20 you’ll want someone who had done this for at least 4-5 years or so, with MANY reps. How many financings have they done? For whom? Which startups? Which VCs?
15/20 Check references, both officially and unofficially. Warning: one negative ref isn’t nec bad if there are lots of positives.
Check references, both officially and unofficially. Warning: one negative ref isn’t nec bad if there are lots of positives.
16/20 How do you feel when you talk to them? Are they condescending? Talk in too much legalese? Do they interrupt you all the time? Do they commit egregious social faux pas?
How do you feel when you talk to them? Are they condescending? Talk in too much legalese? Do they interrupt you all the time? Do they commit egregious social faux pas?
17/20 Your lawyer will eventually attend your board meetings and liaise with your investors. If they rub you the wrong way, odds are they will spoil your relationships with others in a way that’ll hurt you.
18/20 for lawyer referrals, please, please, please DM me. I have many recommendations. What’s my angle? I’m an atty with Flourish Ventures. We’re an early stage venture fund investing in startups that help people improve their financial health. we tend to do series A, late-seed
19/20 when we invest, if a co's legal house isn’t in good shape, it adds time and creates cost on both sides. I want to reduce both as much as possible. and even if we don’t invest, generally good for ecosystem if companies are well prepared for financing with little friction.
20/20 old mentor used to say “time and money are the death of deals.” I practice that mantra to this day. /fin
