You may have heard about the recent announcement from AngelList that, with the help of Wilson Sonsini, they’re now going to offer a platform startups can use to generate seed financing documents for free. Yes, you read that right. Companies can go to this site, fill in some information, get some legal input if needed, and generate documents that can be signed electronically and completed without the usual headaches (and legal fees) that go with them.
This is a pretty neat idea as far as we’re concerned, and seems like a natural extension of the push several years ago to standardized Series A financing documents by the NVCA. This does beg the question, though, as to whether seed financing, and early stage company law in particular, are being pushed into a direction of more standardized (and therefore, less lawyer involvement and lower revenue for firms).
In a thoughtful blog post by Jose Ancer, a startup lawyer in Austin, he talks about how startup law might change over the coming years, and how changes like the AngelList platform might play a role in that. He sees the future of startup law being more like a freemium software model, with larger firms pushing to provide these services to startup clients and using larger deals to subsidize this work. He says there are several themes that are moving this kind of practice in that direction – contractual (the documents themselves), technical (products like Brightleaf and electronic signature software), and operational.
It’s clear that firms are moving in this direction – many offer to defer fees for startup clients – largely because they can afford to do so because the other groups do complex deals and costly litigation that provides room on the balance sheet for these “lottery ticket” clients. We’re certainly big fans of technology helping to advance this trend. And from the response to the AngelList announcement, it sounds like companies are pretty happy too.