087. Why You Need A Startup Lawyer

This is Rich Maloy with SpringTime Ventures,bringing you the VC Minute,quick advice to help startup founders fundraise better.A few things have come up recently that have reminded me of the importance of having a great startup lawyer in your fundraise.To name a few,I've seen overly complicated term sheets provisions in term sheets that have cost founders dearly and messed up cap tables.Oh,man,the cap tables don't even get me started about how many cap tables are so completely screwed up.Cap tables are just one of the areas where an amazing startup lawyer can make a huge difference in the long run.It is incredibly important that you work with a startup lawyer,but there's more to it than just the law.So this week I invited our lawyer to share his insights.Carlos Cruz Abrams is the Founder,Principal and Managing Attorney of Cruz-Abrams Seigel,a corporate law boutique based in Boulder,Colorado with offices in Denver,New York City,Nashville and Miami serving early stage high growth and mature companies at every point in the business life cycle.He's also a great guy and we've learned a ton from him.

Thanks,Rich.First I gotta prove that I'm a lawyer,so everything that I say is not legal advice.I am not anyone's lawyer.I just wanna be able to share some of the insights that I've gotten over20many years of practice.I think that one of the things that we've been really focused on is why do startup founder in particular need lawyers.And I think that for a lot of startup founders,lawyers seem like a lot of expense and they don't really understand the expense.A lot of them say things like,well,if I could just get it online,why wouldn't I just get it online?And I think that part of the expense of a lawyer isn't that you're spending X dollars for30minutes.It's that you're spending X dollars for the many,many years of experience that go into the advice that you're getting in those30minutes.And for startup founders who might be amazing,and most of them are,they're incredible at what they do,they don't really understand the legal landscape.They don't understand the places where they could run into problems,whether that's setting their company up for the future success.And that doesn't mean future success of just raising money,it's how am I gonna go and have intellectual property protection that I need.How am I gonna go and exit when the time is ready and not run into all of the problems that I could have avoided had I set up correctly from the beginning.