Last year, early-stage venture firm Y Combinator “open sourced” the legal documents they provide to their startups to use with investors after Y Combinator’s seed funding. The documents can be found here. TechStars followed by releasing the legal documents they use as a starting point for seed-stage financing for their companies. Those documents can be found here. In both cases, the goal is to help young startups avoid at least some of the legal costs associated with first-round financing by simplifying, and hopefully standardizing, the negotiating process.
A client now points me to this TechCrunch article on The Funded’s release of its Ideal First Round Term Sheet for venture rounds (available here). Like Y Combinator and TechStart, the goal is to reduce legal fees (which average $50,000 or more for a venture round) but also to protect founders by providing them with standard, founder-friendly deal terms for venture rounds.
–Matt
