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Has my lawyer gone overboard with my Terms of Service and Privacy Policy?
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I recently launched my SaaS as a solo founder. I hired a lawyer to draft up a terms of service and privacy policy for my company because this is far from my area of expertise. However, what she sent me was many pages of legal jargon. She even sent me three totally separate Privacy Policy documents (Standard, GDPR, and CCPA).
As an example, here's an excerpt from my terms of service
If you access the Services through a mobile device, you agree that information about your use of the Services through your mobile device and carrier may be communicated to us, including but not limited to your mobile carrier, your mobile device, or your physical location. In addition, use of the Services through a mobile device may cause data to be displayed on and through your mobile device. By accessing the Services using a mobile device, you represent that to the extent you import any of your data to your mobile device that you have authority to share the transferred data with your mobile carrier or other access provider. In the event you change or deactivate your mobile account, you must promptly update your account information to ensure that your messages are not sent to the person that acquires your old number and failure to do so is your responsibility. You acknowledge You are responsible for all charges and necessary permissions related to accessing the Services through your mobile access provider. Therefore, you should check with your provider to find out if the Services are available and the terms for these services for your specific mobile devices. Company is not responsible for the Website or services not displaying or working correctly on mobile services. By using any downloadable application to enable your use of the Services, you are explicitly confirming your acceptance of the terms of the End User License Agreement associated with the Application provided at download or installation, or as may be updated from time to time.
My web platform doesn't even ask for people's phone numbers.
I hate this lengthy legal jargon. But who am I to go against a lawyer's advice. Should I push back or just use what she sent me and move on?
Top Comment: I’m a lawyer who works at a startup. I have gotten assistance from other attorneys from time to time and it’s interesting to see what other attorneys give me. I once asked for a certain contract and I received a document over 30-pages long full of legal jargon. Being an attorney myself and not wanting to send such a long contract, I took the time to cut large parts of it out. I would research if I actually needed sections for my specific purpose and would cut it out if not. The contract ended up being 8 pages long and a lot more readable. Attorneys aren’t normally going to take the time to craft something too specific for you, they’ll give you the whole kitchen sink so they can be sure you’re covered. I don’t really blame them for that since it’s the faster and cheaper way. In your case, it is a bit disappointing that you received three different privacy policies rather than having them combined, which I believe is possible. If it were me in your case, I would not remove anything without knowing exactly why it was there in the first place. Sometimes sections seem unnecessary when they actually are. NOT LEGAL ADVICE.
How did you find a startup lawyer initially?
Main Post: How did you find a startup lawyer initially?
I'm interested in start up law
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Im a recently admitted attorney. I am interested in working with start ups. Does anyone have recommendations on how to break into start up law?
Top Comment: Most start ups need very experienced attorneys. Unless you mean just filing LLCs and Corps for people but that has been taken over by big online sites.
Should I hire a law firm as a pre-funding startup?
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Hi everyone, my startup is finally building some momentum with customers and team-building (yay!). But now I need to handle the legal side of things, and I'm not sure which direction is best. I'd been using NDAs from rocket lawyer and I just don't know if they're really legally solid.
I'm looking for documents like legal employee agreements, stock option agreements, and NDAs. Is it better to hire a law firm with some kind of bundled package, or are folks okay using tools like rocketlawyer? We're pre-funding fyi. Also, how much should I expect to pay for decent legal documents?
Top Comment: I'm an attorney in this space and here are my thoughts: The most cost effective move is to use Clerky or Stripe Atlas to start. They'll handle your incorporation docs and initial share issuances for less than $1,000. My firm is pretty specialized and efficient with this work but it'll still be around $1,500 to $2,500, so I direct early founders to start with the online platforms. A year ago I would've said you might be able to do a Safe raise without help, but with states cracking down on securities offerings, I lean the other direction. For almost anything beyond initial issuances--engage a startup firm. Not just any law firm, but ones that specialize in this space. I've billed many hours cleaning up founder mistakes who held off on hiring a firm, but I've also found plenty of mistakes from general corporate or M&A lawyers who just don't understand the nuances to stock pricing and related tax implications, and general C Corp governance laws. Examples of recent clean-up items: Share transfer from founder to new employees/co-founders (loses QSBS status for recipient) Large redemption from a departing co-founder (can ruin QSBS status for everyone) Under/over payment of stock for later co-founders (income recognition event) Option plan with no valuation of common stock (need internal valuation or 409A) Basing option strike price off recent Safe valuation (terrible result for optionee) Board never duly appointed by incorporator S-election (not eligible for QSBS; limited amount of time to fix) Rescission of purchase agreement in different year than the purchase (improper recission under the Internal Revenue Code) Option issuance in the middle of a raise (can be considered a material event and exposes option holder to 409A underpayment penalty) Founders issuing themselves preferred Voting and non-voting common Super voting rights for founders on BOD Founders issuing themselves Safes due to additional capital contributions (founders generally don't own preferred) Blown securities offering exemptions
Dealing with expensive lawyers as a startup?
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Hi all,
Our startup is going through a difficult situation, we're considering firing our lawyers due to them being expensive & negligent.
We were accepted into a tier 1 accelerator, even though there was money, it's still misery seeing our legal team bill $200-500 a month even if we don't speak to them.
Meanwhile, the crippling anxiety deciding whether to email our legal team, knowing it will result in a $3000-5000 bill at the end of the month has made us hesitant to reach out at all.
They are one of the top legal firms for startups, but we quickly burned through the 10k of deferred payments. They didn't even update our Carta after raising from investors, despite multiple reminders, overall they did a terrible job. We still owe them ~15k which I am not looking forward to paying.
Any advice for finding legal counsel that doesn't break the bank as a startup founder? What is a reasonable hourly rate for quality while not paying $600+ an hour? Any advice?
Top Comment: due to them being [...] negligent. Don't work with people, especially specialists, that you don't respect. Doesn't matter if it's them or you that's the problem, you simply can't work well with people that you don't respect.
Should we get a lawyer?
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We have a pretty solid MVP. We're tightening up our pitch based on feedback from some VCs. We're closing in on an actionable fundraising strategy. My co-founder has an MBA and has some startup experience . I'm the technical founder and I have pretty deep technical knowledge in the domain but other than being a technical lead I have very little business experience.
I tend to think we're at a stage where having a lawyer makes sense. I don't want to be shopping for a lawyer after a term sheet lands in our lap. My partner is very conservative with money and seems at best ambivalent to the idea. We have a backlog of legal related action items (founders agreement, trademarks, reforming as a Delaware C Corp, and regulator research related to privacy and transportation) that are not resolved.
I feel like it makes sense to build a relationship now ahead of a fund raise so that we can have an advisor in our corner if we end up with a term sheet / due diligence. What do you guys think? Is it overkill at this stage or worth shelling out some dough?
Top Comment: Depends on your bankroll. Cash is King, and spending cash on nonessentials is waste unless you have lots of cash. I would interview lawyers and get someone lined up. Find someone who does startups. Then wait until you really need them. You can handle a lot of the organization docs yourself with help from Nolo or similar sites. Regarding contracts: A contract is a lot like a simple program, with a definitions section, an actions section, and an errors section. And like a program, focus on what you do when things go wrong. Only novice programmers and novice business owners assume everything will go right.
Hey /r/entrepreneur, I'm a startup lawyer and will be happy to answer your questions!
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I do early-stage through Series B financing for all kinds of clients, typically on the sell side (e.g. the startup), but also on the fund/investor side. I have ~15 years of experience and will be happy to answer any general legal questions you have.
I am not your attorney. This is not legal advice. You should not trust advice from anonymous posters on the internet. You should hire your own attorney.
Apologies if this violates any rules. Mods please advise or delete.
I'll keep checking this post throughout the day as my schedule allows.
Top Comment: I'm building a Saas product, very early stages and launching an MVP soon. Am wondering what would be the best way to cheaply make terms of service, and privacy policy documents ?
Did you hire a lawyer to help you incorporate?
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I recently joined a small (three person) tech startup as a cofounder. We're all in our mid twenties and none of us have any legal experience, startup related or not.
I bought a book on startup law and have been reading it to try and get a better grasp on things. Early on in the book, the author makes a compelling case for why individuals who have never incorporated before should hire a lawyer to do it for them, because the risk of making an error that'll be costly and difficult to fix down the line is high. I wanted to see what this community thinks before taking the author's words as gospel, though.
When you incorporated, did you do it on your own or did you hire a lawyer? If you did it on your own, how did you ensure the paperwork was done correctly? Are there instances where you think founders really should rely on a lawyer? None of us are in a position financially to spend a few thousand dollars on legal fees, although I do have connections to various lawyers through friends and family that I could explore. Whether or not anyone would be willing to assist either as a personal favor or in exchange for equity, I have no idea (I'm under no delusion that this would be remotely feasible with a complete stranger).
Any advice would be much appreciated. Thanks!
Top Comment: (Disclosure: not a lawyer!) I set up an LLC in Virginia a few years ago for my one-man part-time consulting practice. I didn't hire a lawyer but I recall I did by an incorporation package with standard required documents, mainly an "operating agreement." And of course I registered with the State Corp Commission and the County business license folks and the IRS for a EIN. But what I was doing was simpler than what you are describing. In particular, I am the sole "Member" of my LLC with 100% equity ownership. You have two control issues since you have partners (co-founders) : (1) how to divide and also manage vesting of equity in the corporation; and (2) how to divide authority for making corporate decisions. Apparently the default rules on LLCs is that major decisions have to be made by unanimous consent of all "Members" of the LLC, unless there's something in the Operating Agreement that lets you make certain decisions without unanimous agreement. Seems to me that could be the cause of a lot of problems. So, I'd consider getting some real legal advice on this point, at least. (BTW-- I'm not even mentioning whether organizing a an LLC is appropriate, vs. S-Corp or C-Corp; also whether it's worth it to incorporate in Delaware vs your home State. ) Best of luck to you! (And others please correct my errors!)
Startups?
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Looking to exit big law after 8 years. Still like being a lawyer just can’t manage the schedule with my kids. Seeing a fair amount of counsel opportunities at startups. Anyone have thoughts on the culture at startups? Would it be the same or different as big law in terms of insane schedule and expectations around availability? I know management can be hit or miss anywhere, just trying to get a general sense around startup culture. A usual day to day when advising at a startup would be awesome. Thanks!
Top Comment: This is a Career Advice Thread. This is for lawyers only. If you are a non-lawyer asking about becoming a lawyer, this is the wrong subreddit for this question. Please delete your post and repost it in one of the legal advice subreddits such as (but not limited to) r/lawschool , r/legaladvice , or r/Ask_Lawyers . Thank you for your understanding. I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
Dealing with legal costs as a startup SUCKS..
Main Post: Dealing with legal costs as a startup SUCKS..