Talk about the big news from GDC with TechCrunch writers

The Game Developers Conference concludes today in San Francisco but that doesn’t mean our coverage is over.

TechCrunch writer Lucas Matney and Extra Crunch contributor Eric Peckham were at the Moscone Center and got a first-hand glimpse into what is coming up for gamers and developers alike. And at noon PT today they’ll be sharing what they saw with Extra Crunch members on a conference call.

First, there can be no discussion about gaming news this week without mentioning Google’s new game-streaming service Stadia. As Lucas wrote this week, the service will let gamers leave their hefty GPUs and expensive systems behind … and the service can be used on devices with a Chrome browser and an internet connection.

They’ll also be discussing the latest about game engines, VR and voice-based gaming.

To listen to the call and the opportunity to participate in future conference calls, become a member of Extra Crunch. Learn more and try it for free. 

Pre- and Post-Money SAFEs: Choosing the right one for your startup

With Y Combinator’s Demo Day taking place at Pier 48 in San Francisco next week, its largest batch of companies ever is getting ready to present to an audience of select investors. Having taken Atrium through Demo Day myself, I have first-hand knowledge of the process. When the founders have finished their pitches, the time to talk numbers will closely follow. Chief among the many decisions founders will face during this time is whether to opt for the Pre-Money SAFE or the new Post-Money SAFE, the two standardized legal documents that YC has introduced in recent years.

Both versions are meant to make the process fast, easy and fair for both parties in the early-stage fundraising process. But there are crucial differences between the two that founders should examine carefully.

Essentially, the Pre-Money SAFE is exceptionally favorable to founders because it gets them pre-valuation funding like a convertible note, but debt-free. The Post-Money SAFE sweetens some of the terms for investors, like locking in their percentage ownership in a priced round later on.

Overall, we expect the Post-Money version to become more common, especially if the company is raising a round above $1 million or $2 million, and the investors have more leverage to ask for it in the negotiation.

(Note: This article is aimed at giving founders a general understanding of the changes from Pre-Money SAFEs to Post-Money SAFEs. The information provided is based on my professional experience and opinions, and should not be used without careful consideration and advice by qualified advisors and legal counsel. Also, to learn more and ask questions about Pre and Post-Money SAFEs, join me on April 16th for a webinar where I’ll dive in a bit deeper.)

Two structures for raising startup investment

Today there are two general ways of structuring a startup fundraising round. The first can be called a “priced equity round,” and is characterized by the sale of preferred stock with a fixed valuation.

Verified Expert Lawyer: Mital Makadia

Mital Makadia’s legal career began on the East Coast, with Big Law firms, but she moved into early-stage startup work with long-time Silicon Valley boutique Grellas Shah nearly a decade ago. She’ll work with companies on a range of usual startup issues, but she and the firm also focus on individual founder representation (when it comes to that).

As part of the interview below, we got into a conversation about contentious terms in term sheets — and she ended up writing a guest post for us about the biggest gotchas that she sees in Series A docs. Read up on her here, then go check out What To Watch For In A VC Term Sheet.


On the founder focus:

“We approach the practice with a view to protecting the founders. So we’re not looking to please the VCs. And if that means reviewing the transaction a little bit differently then what the investors are used to, that’s fine by us. That’s pretty much our philosophy.”

On the different perspective:

“For me, I have been through enough financing rounds to know what VCs tend to push for and what’s ‘market’ at a given point in time. But just because a provision might be one my client will likely have to give on, depending on negotiating leverage, I make sure my client understands how it impacts the company and its founders. I don’t simply gloss it over as “market.” And sometimes in those conversations, I suss out legitimate concerns from clients that we can creatively address. But that requires you to have a founder hat — not a VC hat – on when you are reviewing a term sheet.”

On second looks:

“Now, we have a lot of clients who come to us, whether they’re going through an M&A or whether they’re incorporating or whether they are going through a financing round term sheet who may have a lawyer representing the company, but who wants our advice in protecting the founders.”

Below, you’ll find founder recommendations, the full interview, and more details like their pricing and fee structures.

This article is part of our ongoing series covering the early-stage startup lawyers who founders love to work with, based on this survey and our own research. The survey is open indefinitely so please fill it out if you haven’t already. If you’re trying to navigate the early-stage legal landmines, be sure to check out our growing set of in-depth articles, like this checklist of what you need to get done on the corporate side in your first years as a company.


Full Interview:

Eric Eldon: I would love to hear about how you got into working with startups, given your very different focus earlier in your career.

Mital Makadia: Actually, I didn’t start my legal career working with startups. After law school, I did general corporate work at large firms in New York and DC. That feels like a lifetime ago.

I eventually moved out to the West Coast when I got married and came across Grellas Shah when I started looking for a job here. I can’t say my goal was necessarily to work with startups at that point. But I loved this practice from day one.

Of course, I immediately loved working with entrepreneurs. The brilliant new ideas, enthusiasm, optimism, work ethic, and ambition is infectious.

But a huge part of what I have loved about this practice is working with and learning from our firm’s founder, George Grellas. George has been working in Silicon Valley since 1983 and has really seen the ups and downs in the tech industry. Largely due to his reputation as a sharp yet practical startup attorney, our firm has built an enviable client base, which has been an ideal platform for me to launch my own career in the startup world.

Verified Expert Lawyer: Chinh Pham

Chinh Pham got his first degree in genetics, but realized his real interest was the law as it applies to technology. Today, he combines his interests by working with a wide range of startups, including those in the life sciences, medical hardware and other industries where intellectual property defines a company from day one. As the co-chair of the emerging technology practice at international law firm Greenberg Traurig LLP, he and his team provide a range of services to companies from the ground floor up; he also spends significant time with commercialization programs at top universities.


On common startup mistakes:

“I’d say it is important to get all the founders in place and on the same page very early on. We’ve seen so many situations where there’s some internal turmoil before the company even gets off the ground, and then the whole venture falls apart. I typically suggest that each team member be responsible for specific tasks, because not everyone is good at everything.

“We are med-tech entrepreneurs who have created six companies over the past decade. Chinh has been with us since the beginning and has been one of the most significant contributors to the value we have created.” Lishan Aklog, MD, New York, NY, Chairman & CEO PAVmed Inc

“I also find that many student entrepreneurs are in the United States on an academic F1 visa. They may not realize that while they may found a startup, an F1 visa may not allow them to work or be employed by the startup. Therefore, consultation with an immigration attorney may be needed.”

On the importance of IP to many startups:

“I divide the world into wet, under which life sciences fall, and dry, under which everything else falls. Regardless of the type of client, I’ve found that most often IP is fairly critical for their success, because as they’re thinking about fundraising, they need a solid IP portfolio for investors to look at because most of these investors, as you know, aren’t going to put money into a company that really doesn’t have any innovation.”

Below, you’ll find founder recommendations, the full interview, and more details like their pricing and fee structures.

This article is part of our ongoing series covering the early-stage startup lawyers who founders love to work with, based on this survey and our own research. The survey is open indefinitely so please fill it out if you haven’t already. If you’re trying to navigate the early-stage legal landmines, be sure to check out our growing set of in-depth articles, like this checklist of what you need to get done on the corporate side in your first years as a company.


The Interview

Eric Eldon: First of all, how did you get into working with startups and within the wider world of the legal profession? I’d love to hear about your experiences working in Boston in particular as well.

Chinh Pham: My work with technology companies began while in law school in San Francisco back in the early 90s. As an intellectual property attorney, I’ve continued to work with technology companies, from startup phase to exit, throughout my entire career. Very early on in my legal career, an investor friend asked me about nanotechnology, which at that time, was a little-known but promising technology. I spent some time researching the nanotech industry and learning everything I could about the technology and its potential applications. Almost instantly, I was the nanotech expert at my firm and quickly became known as a nanotech specialist in the business world. That was an exciting time in my career, and I discovered that I loved the challenge and promise of emerging technologies, so I dedicated my practice to helping innovators develop, commercialize and protect their technologies.

Verified Expert Lawyer: Jared Verzello

TechCrunch is profiling great startup lawyers wherever they may be working — and that includes within new companies built from the ground up around tech. Today, we’re interviewing Jared Verzello of Atrium. While even the most old-line of law firms have begun integrating document automation and analysis software, Atrium started that way. Around two years old, it’s both a full-service corporate law firm, Atrium LLP, and a technology startup, Atrium Legal Technology Services, that focuses on building tech for its clients and lawyers.

For his part, Verzello joined Atrium 18 months ago from Silicon Valley law firm Cooley LLP, and heads up the seed stage practice. In the interview below, he tells us how he got into this position, how he works with startups from within Atrium, and trends he’s seeing in the market today.


On common founder mistakes:

“Having represented over 20% of Y Combinator (YC) companies for the last few batches, I come across many of the same founder mistakes. One of the more common is that a founder will choose to incorporate as an LLC because they can write off a bit of the losses on their personal tax return.

“As a very early-stage company, one can be exposed to so many vulnerabilities and even potential bullies when it comes to legality. Jared (my attorney) has been knowledgable, understanding, and adaptable and the value of that to a startup cannot be overstated.” Leslie Fong, San Francisco, founder and CEO, VENIM

“But by the time they’ve decided to work with YC, they usually have raised money — often in the form of a convertible note — and they end up having to flip their LLC to a Delaware corporate (YC only invests in Delaware C-corps). What founders don’t realize is there are partnership tax issues for converting with debt outstanding in the business. We end up having to do conversions with $25,000 or $30,000 in legal fees and bring in tax and accounting specialists because a founder got some misguided advice at the very beginning.

“What I advise is that founders should not cut small short-term corners like incorporating as an LLC vs Delaware C-corp if they know they want to be venture-backed.”

On his approach:

“My goal, and Atrium’s goal, is to provide both legal and business advice so that our founders can worry about finding product-market fit or keeping money in the bank versus worrying about legal. My objective is for our clients to be protected but to spend little or no time thinking about legal.

“I always advise my clients that they should not be interested in being innovative in their legal structure. In order for startups to move quickly, the legal should be simple to administer, simple to understand, simple for investors to get on board with, so they can focus all of their brain power into the products and competitive advantage of the business.”

On Atrium:

“When engaging with Atrium, our clients are first and foremost engaging with a law firm but to know if it’s the right fit, I usually try to gauge what type of firm and relationship they want. For example: do you want a firm that’s doing business the same way they’ve always done business, for decades, or do you want a firm that thinks innovatively, like you, and has a key objective to improve their services and operational efficiency over time?”

Below, you’ll find founder recommendations, the full interview, and more details like their pricing and fee structures.

This article is part of our ongoing series covering the early-stage startup lawyers who founders love to work with, based on this survey and our own research — the survey is open indefinitely so please fill it out if you haven’t already. If you’re trying to navigate the early-stage legal landmines, be sure to check out our growing set of in-depth articles, like this checklist of what you need to get done on the corporate side in your first years as a company.


The Interview

Eric Eldon: You’ve ended up in a pretty unique place, in terms of a legal career. Tell me more about how that happened.

Jared Verzello: I’m not a Silicon Valley insider. I’m not from this area. I grew up in Georgia and Connecticut, and I knew nothing about technology companies or any of that stuff when I chose to go to law school. I had an independent reason for going to law school, which is I thought I wanted to do courtroom and trial work, and a lot of the things that you would see lawyers portrayed as in the media, and that’s a whole other can of worms about making long-term education decisions early in life, when you have limited life experience.

But suffice it to say that, once I was in law school, I quickly found out that I was not interested in those more formulaic areas of law. I found them very constraining and not very interesting or creative. Every year students go out and they find the best internships and placement programs that they can get into, they build their resume, as do we all in our schooling, and I found that I wasn’t interested in anything that was available to first-year law students.

I went to Brigham Young University. I was in Utah. I was not in Silicon Valley exposed to all this stuff. But all of my peers were going to go work for judges or volunteer at one institute or another, and I just could not find anything that was interesting to me. But I had a friend who had come out to Silicon Valley several years earlier and ended up raising some money, and they actually raised a decent Series A. This was back in 2011. They were a super lean team and suddenly the biggest blocker for them was hiring. They needed to hire engineers. So long story short, I spent my entire summer here working in Palo Alto, helping them recruit engineers and we recruited over a dozen engineers in four months, which was pretty phenomenal.

Verified Expert Lawyer: Sam Angus

Sam Angus has been a lawyer in Silicon Valley since the 1990s. Today, he represents some of the biggest names in the startup world, from their earliest days through acquisitions and IPOs, and including four acquisitions last year: TSheets, GitHub, Glint and HelloSign.

But his startup experience actually goes back to the 1980s, when he and some friends built a booming calendar publishing business out of their dorm room during college. In the interview below, he tells us about the ups and downs of the tech industry over the decades, how he helps clients through the good times and bad, and how he works within Fenwick & West, one of the leading tech law firms in tech. We also discuss long-term trends, like the shift towards founder-friendly terms in this era versus past decades in the Valley.


On early-stage problems:

“I’ve represented hundreds of early-stage companies. It is not uncommon for companies to have some existing legal issue that needs to be addressed, such as capitalization, documentation and/or employee/IP issues. It is unfortunate, but these issues will frequently — especially with early stage companies — lie dormant and be discovered when the company is contemplating its first financing or a significant transaction, and can take investors or buyers by surprise.

“Sam is one of the most trusted partners that I have ever had and one of the most important people to [the company’s] history.” — A cofounder and CEO of a large unicorn company

“A common mistake is for a company to think that a given issue will not be a concern to an investor or buyers. In my experience, issues that arise on the eve of a financing or other transaction can create risk in the transaction and can be expensive to address quickly. For example, one client I worked with had been operating for years with virtually no documentation and not surprisingly had significant deficiencies in terms of corporate approvals. Very few things are fatal, but the result for this client was a bumpy and more expensive financing process — which required several rounds of explanation to the investors and their counsel.”

On being a startup lawyer:

“What I’ve learned is that the best lawyers for startups bring more than competent legal advice to the relationship – they act like business owners themselves, thinking strategically about the business. The best lawyers have significant experience and a knack for pattern recognition, the combination of which helps identify issues and opportunities in advance of when they become apparent.”

On risk-taking:

“There are some legal risks that early-stage companies will need to take. In my view, my role with earlier stage clients is to position them for success by being practical and focusing them on the issues that are material for a company at their stage of development. Overall, I want to empower clients to push the bounds of what they think is possible, while making wise business and legal decisions that won’t handicap them in the future.

“I would also point out that being able to scale with clients is extremely important. As clients grow, my role evolves to fit their needs – what works for a startup company is different from what a unicorn/growth company will need from their lawyer. With early-stage companies I tend to be more closely involved with the founders and the company’s business, while with later stage companies the relationship becomes more strategic and we tend to support internal legal teams and boards of directors.

Below, you’ll find the rest of the founder reviews, the full interview, and more details like their pricing and fee structures.

This article is part of our ongoing series covering the early-stage startup lawyers who founders love to work with, based on this survey (which we’re keeping open for more recommendations) and our own research. If you’re a founder trying to navigate the early-stage legal landmines, be sure to check out our growing set of in-depth articles, like this checklist of what you need to get done on the corporate side in your first years as a company.


The Interview

Eric Eldon: To begin with, tell me about Fenwick & West. It’s one of the original law firms that started in Silicon Valley and focused on tech companies, and you’ve been there for years through the various cycles.

Sam Angus: Launching my career in Silicon Valley has provided me with a unique skillset and perspective that now enables me to thoughtfully advise clients who want to scale quickly, no matter where they are located. Working with fast-growing innovators, like those I’ve served since the tech boom of the 1990s, is in my view different from traditional approaches to practicing law. Providing clients with excellent legal advice is table stakes for any advisor to startups. What I’ve learned is that the best lawyers for startups bring more than competent legal advice to the relationship — they act like business owners themselves, thinking strategically about the business. The best lawyers have significant experience and a knack for pattern recognition, the combination of which helps identify issues and opportunities in advance of when they become apparent. Great startup lawyers also have extensive networks of investors, founders and partners and can leverage these networks to help their clients, address material operational issues, fundraise or complete a strategic transaction. They are efficient/cost-effective and move as quickly as their clients, and, most importantly, provide judgment. This entire skill-set is rare for lawyers, but when it comes in one package it is incredibly valuable to emerging companies. That’s one of the reasons why I love working at Fenwick: this approach to advising startups is simply how we practice.

Eldon: The legal industry is seeing real competition from online services and automation — how are you competing?

Angus: It is true that automation is impacting the practice of law, like other sectors of the economy. Because Fenwick works closely with innovative companies across the globe and sees how technology is changing things, we are among the firms leading the way to embrace this change.

For example, Fenwick has an in-house data and technology innovation team. Our innovation team has developed various automation tools and software products to augment and enhance the services we provide our clients. These include automated forms, client portals where clients can access all the data about their companies (i.e. key corporate documents, cap table, contact information for their Fenwick team, etc.), and use of tools such as Kira, an AI platform that automates aspects of document review in M&A deals, allowing us to close deals at a rapid pace while helping control costs.

Another innovation is our budgeting capability. Fenwick’s budgeting team provides our clients with timely and accurate cost estimates for projects and transactions, such as M&A or IPOs. Leveraging our proprietary deal data about hundreds of similar transactions, we are able to more accurately predict legal costs for our clients.

Eldon: Let’s go back to how you got into working with technology companies and startups.

Angus: In the early 1980s, after a short stint playing professional tennis, I was recruited to play tennis at UC Santa Barbara on a tennis scholarship. While at UCSB, I entered the entrepreneur world, starting UCSB’s first entrepreneur club with two friends in 1984. We also launched our own business, a publishing company that produced and distributed wall calendars.

Our growth was rapid: In our first year we did one calendar title, the next year we expanded to five calendar titles, the year after that 25 calendar titles, the year after that 75 titles, as well as a number of posters and other printed products. As our business grew, we started licensing popular culture content, which was something the calendar industry hadn’t really seen before. We were the first to produce the Michael Jackson calendar and the first Madonna calendar.

Eldon: You did all of this while you were in college?

Angus: Yes, though I ended up taking a break from college in 1987, one quarter shy of completing my degree, to pursue the business full time. By 1989, the company had grown to about 150 US salespeople, ten international distributors, and was doing roughly $50 million annually in gross revenue.

In the end, I ended up selling my interest in the company to the lead investor following resolution of various claims with the investor. Through that experience, I learned firsthand what it’s like to be a founder who had bootstrapped and had scaled the company with complex supply chain … and navigated investor issues.

Verified Expert Lawyer: Sam Angus

Sam Angus has been a lawyer in Silicon Valley since the 1990s. Today, he represents some of the biggest names in the startup world, from their earliest days through acquisitions and IPOs, and including four acquisitions last year: TSheets, GitHub, Glint and HelloSign.

But his startup experience actually goes back to the 1980s, when he and some friends built a booming calendar publishing business out of their dorm room during college. In the interview below, he tells us about the ups and downs of the tech industry over the decades, how he helps clients through the good times and bad, and how he works within Fenwick & West, one of the leading tech law firms in tech. We also discuss long-term trends, like the shift towards founder-friendly terms in this era versus past decades in the Valley.


On early-stage problems:

“I’ve represented hundreds of early-stage companies. It is not uncommon for companies to have some existing legal issue that needs to be addressed, such as capitalization, documentation and/or employee/IP issues. It is unfortunate, but these issues will frequently — especially with early stage companies — lie dormant and be discovered when the company is contemplating its first financing or a significant transaction, and can take investors or buyers by surprise.

“Sam is one of the most trusted partners that I have ever had and one of the most important people to [the company’s] history.” — A cofounder and CEO of a large unicorn company

“A common mistake is for a company to think that a given issue will not be a concern to an investor or buyers. In my experience, issues that arise on the eve of a financing or other transaction can create risk in the transaction and can be expensive to address quickly. For example, one client I worked with had been operating for years with virtually no documentation and not surprisingly had significant deficiencies in terms of corporate approvals. Very few things are fatal, but the result for this client was a bumpy and more expensive financing process — which required several rounds of explanation to the investors and their counsel.”

On being a startup lawyer:

“What I’ve learned is that the best lawyers for startups bring more than competent legal advice to the relationship – they act like business owners themselves, thinking strategically about the business. The best lawyers have significant experience and a knack for pattern recognition, the combination of which helps identify issues and opportunities in advance of when they become apparent.”

On risk-taking:

“There are some legal risks that early-stage companies will need to take. In my view, my role with earlier stage clients is to position them for success by being practical and focusing them on the issues that are material for a company at their stage of development. Overall, I want to empower clients to push the bounds of what they think is possible, while making wise business and legal decisions that won’t handicap them in the future.

“I would also point out that being able to scale with clients is extremely important. As clients grow, my role evolves to fit their needs – what works for a startup company is different from what a unicorn/growth company will need from their lawyer. With early-stage companies I tend to be more closely involved with the founders and the company’s business, while with later stage companies the relationship becomes more strategic and we tend to support internal legal teams and boards of directors.

Below, you’ll find the rest of the founder reviews, the full interview, and more details like their pricing and fee structures.

This article is part of our ongoing series covering the early-stage startup lawyers who founders love to work with, based on this survey (which we’re keeping open for more recommendations) and our own research. If you’re a founder trying to navigate the early-stage legal landmines, be sure to check out our growing set of in-depth articles, like this checklist of what you need to get done on the corporate side in your first years as a company.


The Interview

Eric Eldon: To begin with, tell me about Fenwick & West. It’s one of the original law firms that started in Silicon Valley and focused on tech companies, and you’ve been there for years through the various cycles.

Sam Angus: Launching my career in Silicon Valley has provided me with a unique skillset and perspective that now enables me to thoughtfully advise clients who want to scale quickly, no matter where they are located. Working with fast-growing innovators, like those I’ve served since the tech boom of the 1990s, is in my view different from traditional approaches to practicing law. Providing clients with excellent legal advice is table stakes for any advisor to startups. What I’ve learned is that the best lawyers for startups bring more than competent legal advice to the relationship — they act like business owners themselves, thinking strategically about the business. The best lawyers have significant experience and a knack for pattern recognition, the combination of which helps identify issues and opportunities in advance of when they become apparent. Great startup lawyers also have extensive networks of investors, founders and partners and can leverage these networks to help their clients, address material operational issues, fundraise or complete a strategic transaction. They are efficient/cost-effective and move as quickly as their clients, and, most importantly, provide judgment. This entire skill-set is rare for lawyers, but when it comes in one package it is incredibly valuable to emerging companies. That’s one of the reasons why I love working at Fenwick: this approach to advising startups is simply how we practice.

Eldon: The legal industry is seeing real competition from online services and automation — how are you competing?

Angus: It is true that automation is impacting the practice of law, like other sectors of the economy. Because Fenwick works closely with innovative companies across the globe and sees how technology is changing things, we are among the firms leading the way to embrace this change.

For example, Fenwick has an in-house data and technology innovation team. Our innovation team has developed various automation tools and software products to augment and enhance the services we provide our clients. These include automated forms, client portals where clients can access all the data about their companies (i.e. key corporate documents, cap table, contact information for their Fenwick team, etc.), and use of tools such as Kira, an AI platform that automates aspects of document review in M&A deals, allowing us to close deals at a rapid pace while helping control costs.

Another innovation is our budgeting capability. Fenwick’s budgeting team provides our clients with timely and accurate cost estimates for projects and transactions, such as M&A or IPOs. Leveraging our proprietary deal data about hundreds of similar transactions, we are able to more accurately predict legal costs for our clients.

Eldon: Let’s go back to how you got into working with technology companies and startups.

Angus: In the early 1980s, after a short stint playing professional tennis, I was recruited to play tennis at UC Santa Barbara on a tennis scholarship. While at UCSB, I entered the entrepreneur world, starting UCSB’s first entrepreneur club with two friends in 1984. We also launched our own business, a publishing company that produced and distributed wall calendars.

Our growth was rapid: In our first year we did one calendar title, the next year we expanded to five calendar titles, the year after that 25 calendar titles, the year after that 75 titles, as well as a number of posters and other printed products. As our business grew, we started licensing popular culture content, which was something the calendar industry hadn’t really seen before. We were the first to produce the Michael Jackson calendar and the first Madonna calendar.

Eldon: You did all of this while you were in college?

Angus: Yes, though I ended up taking a break from college in 1987, one quarter shy of completing my degree, to pursue the business full time. By 1989, the company had grown to about 150 US salespeople, ten international distributors, and was doing roughly $50 million annually in gross revenue.

In the end, I ended up selling my interest in the company to the lead investor following resolution of various claims with the investor. Through that experience, I learned firsthand what it’s like to be a founder who had bootstrapped and had scaled the company with complex supply chain … and navigated investor issues.

Verified Expert Lawyer: Andrew Erskine

Andrew Erskine has developed his legal career along with the rise of the tech startup scene in Los Angeles. Today, as a partner at Orrick in its Santa Monica office, he works with companies large and small in the area and beyond.

 


His approach:

“The way that I practice and the philosophy I have is that clients aren’t really coming to me with legal problems. They’re coming with business problems and we need to solve them with that context. It’s almost never an answer of, ‘This is the law, now go do what it is that the law says exactly what you need to do.’ It’s more of ‘this is the way that your business works and how I understand it, and these are the rules that are set out for you to follow and you need to think about how to follow them.’”

On LA’s startup scene:

“Andrew provides the same level of effort, expertise and professionalism when I was a pre-seed company with no capital as he did when we had raised $100 million.” Brian Thomas, Los Angeles, cofounder, Clutter
“The LA community has gotten to a point where it’s sophisticated and it’s significant. It’s one of the largest communities in the world, but we still need to be doing what we can to protect it and support it and help it grow further. It’s because we touch so many early-stage companies and, obviously, we have a lot of communication with early stage investors and as you go up the chain, mid-late stage as well, a lot of it is also just trying to make sure that people are being connected the way that they need to be.

“I spend a lot of time just trying to put people in touch with each other, including a lot of people that are not my clients — I don’t do any work for them. They’re just people that I know in the community and we’ve become friends and I’m trying to make sure that what they’re trying to do is growing at the same rate.”

On early-stage problems:

“We’ve had acquisitions in the ten figures in recent years where people were coming out of the woodwork at the very last minute saying, ‘Hey, I own a piece of this company.’ And it was just something that founders never really thought to raise and then of course you’re dealing with the huge issue at the most critical point in the company’s history. So, things like that will happen.

A lot of that is just trying to get that out of founders that you start working with, the stuff that you see in your experience can come back to really bite people, you just ask them day one, right away. ‘Hey, are there skeletons in the closet? Because if there are….’”

Below, you’ll find the rest of the founder reviews, the full interview, and more details like their pricing and fee structures.

This article is part of our ongoing series covering the early-stage startup lawyers who founders love to work with, based on this survey (which we’re keeping open for more recommendations) and our own research. If you’re a founder trying to navigate the early-stage legal landmines, be sure to check out our growing set of in-depth articles, like this checklist of what you need to get done on the corporate side in your first years as a company.


The Interview

Eric Eldon: How did you get involved with tech companies and startups?

Andrew Erskine: I was a summer associate over here in LA and a bunch of outside groups would come talk about what they do. There was like one guy in the city working with startups and he came in and explained what he did and that was it. I heard him and I was like, “That’s what I want to do. Period.” Just the way that he described what he was doing, the level of contact that he had with the people that are making decisions at these companies, the actual founders and lead investors, and the ability to not just be providing purely legal advice, but really trying to help these companies grow and build a vessel around them, giving them business advice, personal advice, whatever it is. It just sounded so much more fascinating than the idea of being one out of 100 on a deal and I just decided that I had to do it and it turned out really exactly how I hoped it would.

Eric Eldon: Can you just tell me more about how you see a lawyer playing a role in developing a tech startup ecosystem? 

Verified Expert Lawyer: Leslee Cohen

Leslee Cohen has been practicing law for decades in her hometown of Chicago. She’s been working with more and more startups over the last ten years, after co-founding her own firm (Hershman Cohen) and expanding along with the city’s tech scene.


On her approach:

“I have one partner and we have now hired two other women to join us. We are extremely conscious of the fact that startups and small businesses have a lot of important uses for their dollars other than legal fees. We are all senior-level attorneys and we never double bill. What that means to our clients is that if one of us does the work and needs a second set of eyes in a particularly complex contract, those additional hours are not billed.

“Leslee’s ability to make even the most complicated issues simple and easy to understand has been invaluable to our company!” Larry Bellack, Chicago, President, Mobile Doorman
“The pressure at the big firms is: how many hours have you billed? If someone called me with a quick question in my prior days as a big firm attorney, my thought was ‘I get to put .2 on my billing sheet.’ And that’s just the complete opposite of what our practice is about; it’s about forming those relationships with startups and continuing to serve in that general counsel role for as far down the road as possible. Having our clients go tell everyone how great we are is so much more important to me than an extra .5 on a timesheet.”

On founder-investor relations:

“I feel that maintaining the founder’s relationship with its investors is of great importance, even through sometimes difficult negotiations, and make every effort to be the lawyer that fosters that relationship rather than hindering it in any way. I recently worked on a Series A offering and the founder-investor relationship was extraordinarily positive until one particular issue arose — the founder’s first gut reaction was fury and ‘how could she say that to me and how could she do that to me and I’m gonna call her and tell her what I think.’ My response was ‘write out an email with everything you want to say and send it to me and then we’re gonna delete it. Two weeks ago you loved each other and you’re going to again. She’s a strategic investor, she knows what she’s doing and she’s bringing so much credibility to your business — this is not the way you want the relationship to go.’

“So the founder wrote that email, and it was vicious, and then he called me back two hours later to thank me profusely. Sure enough they sat down, talked it out, and their relationship is strong again.”

Below, you’ll find the rest of the founder reviews, the full interview, and more details like their pricing and fee structures.

This article is part of our ongoing series covering the early-stage startup lawyers who founders love to work with, based on this survey (which we’re keeping open for more recommendations) and our own research. If you’re a founder trying to navigate the early-stage legal landmines, be sure to check out our growing set of in-depth articles, like this checklist of what you need to get done on the corporate side in your first years as a company.


The Interview:

Eric Eldon: How does your practice work, given that you’ve struck out from a big law firm to cofound a boutique firm? What are you focused on with early-stage companies?

Leslee Cohen: One is startup formation and I do work with those ‘I have an idea’ kind of companies. I’ll talk for an hour for free to anybody who is at that point, but usually other than entity formation — which a paralegal can do — you probably should focus on developing your idea a little more before you spend money on a lawyer. Once someone is ready to actually start a company, I’ll do it all at that stage, even pre-funding, and help with entity selection and formation, organizational documents, bylaws and what-have-you.

And then co-founder agreements, a lot of co-founder agreements. I think that’s really important, I understand if someone comes to me and says I’m starting a company with my sister or with my best friend from kindergarten that’s not your first thing you want to spend money on in terms of legal fees. But, with those few exceptions, I’ve seen so many co-founder breakups that it’s really important to me.

The more common way that companies come to me is when they’re raising their seed round. I will work with them on SAFE and convertible note rounds. I will work with them on the disclosure part of the round, the SEC filings, any state filings necessary, structuring the round, what it’s going to look like. And then the companies have money and start hiring their first employees, so I draft employment agreements, handle HR issues and structure equity grants to advisors and restricted stock agreements. I also provide a privacy policy, terms of use, NDAs, and then once they start doing business, day-to-day contracts with customers and on the other side with vendors and suppliers. Determining employee versus independent contractors, cap tables, incentive stock plans — those are all right in my wheelhouse.

The furthest I’ll go into real estate is the first lease.

Eldon: How does this compare versus what you used to do in BigLaw?

Cohen: I was in that world, so I understand what goes on — the fees, and really the pressure to bill hours — and that’s my number one pet peeve that we really focus on here.

I have one partner and we have now hired two other women to join us. We are extremely conscious of the fact that startups and small businesses have a lot of important uses for their dollars other than legal fees. We are all senior-level attorneys and we never double bill. What that means to our clients is that if one of us does the work and needs a second set of eyes in a particularly complex contract, those additional hours are not billed.

Verified Expert Lawyer: José Ancer

José Ancer is first of all a startup lawyer, with a client portfolio of startups of various stages based around Texas and other similar ecosystems outside of Silicon Valley. He’s also the CTO of Egan Nelson LLP, a boutique firm, where he actively is also building automation software to help the firm compete against larger firms. He also writes on his blog “Silicon Hills Lawyer” publicly and pointedly about his profession — and often takes shots at certain practices common among startup law firms, including Silicon Valley firms. You can get a sense of what’s in the full interview via these excerpts.


On not being “owned” by VCs and repeat players

“José has a depth of expertise in startup/company formation/funding issues and is very founder-friendly. He was able to guide us through our seed stage while staying efficient and keeping the billing reasonable.” Mary Haskett, Austin, Texas, CEO, Blink Identity
“I believe, and our clients would confirm, that independence from the VC/repeat player community, combined with deep knowledge of startup financing and high-stakes corporate governance (board issues), allows us to say things, do things, and even write things (on my blog) that the startup community absolutely needs to see and hear, but that “captive” lawyers have been unwilling to offer because of the very real risk of retaliation from influential money players who refer them business. I’ve become a bit of a bête noire of lawyers who’ve built their practices by flouting conflicts of interest and working as company counsel despite being “owned” by VCs across the table.”

On early-stage and being “right-sized”

“I wrote a blog post called ‘The Problem With Chasing Whales.’ It talks about this problem of entrepreneurs hiring law firms that are overkill for what they’re building. We’ve had a lot of clients switch to us from the marquee law firm names, and while the largest complaint is cost — our rates are hundreds of dollars an hour lower because we keep our overhead very lean, while still having top-tier lawyers and lean infrastructure for scalability — another common complaint is responsiveness. You’ve got a million dollar convertible note deal that you need to get done, and to you and your employees, that deal is the world, but the BigLaw lawyer you’re working with has IPOs and unicorn deals pushing your deal to the back of the line. It’s a real problem. Our target profile client exits under $300M in a private deal; which is a type of startup that we think has been very underserved by the traditional hyper-growth oriented law firms in the market.”

On legal technology and automation

“I spend a lot of time talking to legal tech entrepreneurs, because efficiency via legal tech has always been a core value proposition of our firm. As I’ve reviewed and contemplated various tools, one thing I’ve always come back to is this unavoidable tension between flexibility and automation. Software, even cutting edge machine learning, can only handle a minimal level of variation before it breaks down and becomes more hassle (and cost) than it’s worth… Some firms have opted to lean very heavily on the fast automation and standardization side, and accept the rigidity that it inevitably introduces into their workflows… We’ve consciously gone a different direction… Our clients tend to think that constraining the advice startups get by boxing it into inflexible software (and pricing) is not only a penny-wise, pound-foolish confusion of priorities; it’s also exactly the kind of approach that benefits investors at the expense of one-shot common stockholders.”

Below, you’ll find the rest of the founder reviews, the full interview, and more details like their pricing and fee structures.

This article is part of our ongoing series covering the early-stage startup lawyers who founders love to work with, based on this survey we have open and our own research. If you’re a founder trying to navigate the early-stage legal landmines, be sure to check out our ongoing series lawyer interviews, plus in-depth articles like this checklist of what you need to get done on the corporate side in your first years as a company.


The Interview

Eric Eldon: You’re pretty outspoken about the state of startup law these days. Break it down for me: what is Egan Nelson doing differently from the other law firms out there?

José Ancer: If you look at the startup legal market, everyone knows the marquee, high priced firms. They represent Facebook, Uber, Palantir, Apple, etc. But when you pay those firms $700 an hour, as an example, 25% ballpark is going to compensation for the lawyers doing the main work. 75% is paying for other stuff. So then the question obviously becomes, how much of that other stuff is really necessary?

Our view is that there’s this segment of the startup market, and I call them non-unicorns, that is far more serious and scaled than what a tiny firm or solo lawyer can handle, but for whom BigLaw is completely overkill. We see these companies a lot more in places like Austin, Denver, Seattle, New York, etc., and it’s why our focus is on those markets. 

If you look at our lawyers’ credentials, you’ll see a whole lot of Stanford, Yale, Harvard, etc., as well as marquee firm alumni. What you won’t find at our firm is ludicrously expensive office space, cute events that have nothing to do with legal counsel, or armies of staff that don’t deliver real value to the end-service for clients.

Our legal talent is paid very well, but our overhead infrastructure is designed for companies that sell as a private company for under $300 million, or perhaps operate indefinitely as profitable companies. These are “startups” that might be derisively labeled as “doubles” or “singles” in parts of Silicon Valley, but we think have been substantially underserved by the market.