Nivi · June 16th, 2011
Go read Elad Gil’s You Should Read Every Word of Every Legal Doc.
Some docs are too long and boilerplate to read, so this is how I read financing docs:
- Read and understand everything in the term sheet. But when it comes to the closing docs, ask your lawyer to explain all the terms that he has seen written, or could have been written, more favorably to the startup. The closing docs are too long and boilerplate to read.
- Get a good lawyer because you probably don’t have one. You really won’t know what a good lawyer is until you’ve fired a few. I regularly run into lawyers at big firms who give bad advice alongside good advice. Don’t assume your lawyer is good just because he works at a big Silicon Valley law firm.
- You probably can’t tell the difference between good legal advice and bad legal advice. So you will need a great advisor like Elad.
You should subscribe to Elad’s blog. It is consistently great.