Simpler Is Better

Published: 9/25/2007 7:33:06 AM

There's an idea floating around the VC world these days - the need to simplify legal documentation for angel rounds or smaller series A rounds of $1 million or less.

I would be a big fan of this idea, and I believe other angel investors as well as entrepreneurs would be supporters as well.

First, from the angel investor standpoint: no one likes having to go through several turns (versions) of a stack of documents.  Angel investors usually don't do this sort of thing for a living, they want to get down to the business of helping the company, or having a passive role.  So, they have little patience for this type of work.

As for entrepreneurs, most of them passionately dislike the idea of having to PAY for the stack of documents, since that is typically what happens.  The dislike it because here they are going hat in hand to get financing from VCs or wealthy individuals, and its the poor entrepreneur that must pay for the documents?  If a deal doesn't happen, they're stuck with the bill and no financing.

I can't speak for anyone else, but I bet there will be more frequent calls for simpler documentation, especially as the prevalence of web 2.0 type companies persists.

Don Jones



Don Jones
CEO, VentureDeal

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