Venture Capital?

[SofaGeorge]

ScrappyI think SofaGeorge overstated the lawyer side of things. The lawyer only comes into play when you are drawing up the contract, which means someone has agreed to fund you.
Matt

I can't disagree with this more. He is inexperienced and unschooled. He needs an attorney from the beginning.

You and I can fly by the seat of our pants because we've done it a few times. Having a novice trying to take things out the door without proper legal guidance is a losing proposition. If his idea is sound, many attorneys will work with him for small points on the project. That keeps him from having to go into the hole upfront... and it covers his ass.

I've been through numerous litigation suits. I only came out on top because I had good lawyers, good contracts, and I've always followed my attorneys' advice all the way.

 

[HappyScrappy]

out of curiosity - to show how little I know - what type of lawyer does this sort of thing. I have family that is in patent law and intellectual property sorts of things - but that doesn't sound quite the same as this.
contract law?
just curious, I have a lot of potential contact in the law field, but not much money

 

[MattTheSkywalker]

You and I can fly by the seat of our pants because we've done it a few times. Having a novice trying to take things out the door without proper legal guidance is a losing proposition. If his idea is sound, many attorneys will work with him for small points on the project. That keeps him from having to go into the hole upfront... and it covers his ass.

I think we're arguing different sides of the same coin. I am warning him to control his attorneys...and I am saying they don't really need to be there as he meets with various funds or VC groups.

Once a potential investor has shown real interest, then yes, have an attorney nearby. Sound idea...I just prefer to avoid needless bill-able hours. I suppose getting started, it;s better to be safe than sorry.

I also know that atty's often have their own interest (billing hours) above yours (a fair deal).

PM me if you have some time.


Scrappy,

VC's throw the phrase "IP" around a lot, as in intellectual property. So an IP lawyer would be helpful, particualry if they have a background in contracts.

There are dozens of atty's that do this. Most of them are in NYC or Silicon Valley, (as are many VC's).

 

[SofaGeorge]

I also know that atty's often have their own interest (billing hours) above yours (a fair deal).
.

Can't agree with this strongly enough. I had one very cool litigation attorney (long time friend) representing one case. It got combined with a sister suit that I had another firm working on. The cool attorney gave me the full skinny as to what my own attorneys were doing to secure THEIR best interests... not mine. On the first day of court when it came to settlement talks... he didn't just have to beat the crap out of the opposition... he ahd to beat the crap out of my own attorneys.

After the settlements were in, he and I were smoking cigars on his back porch and he was giving me the blow by blow. He was a master of psychological manipulation and slight of hand. He said, "I knew I was going to get the money I was asking... not when I saw the opposition counsel shaking their heads... but when I saw your own attorneys shaking their heads and saying 'This guy really is insane.'

 

[MattTheSkywalker]

On the first day of court when it came to settlement talks... he didn't just have to beat the crap out of the opposition... he ahd to beat the crap out of my own attorneys.

Good story. if you are well informed, you can often leverage your own attorneys' interests to force settlement of issues pre-litigation.

Of course, it very much depends on the type of suit, but most lawsuits are settled in mediations or pre-trial hearings, so negotiating is generally how these things are won.

People err when they let their attorney be their mouthpiece and don't add to it. Depending on the fee structure for your lawyer (contingency or hourly), you may have similarly aligned, but fundamentally different, interests in the outcome of the hearing or mediation.

In any negotiation, you can leverage these varying interests against opposing parties, and at the very least, while negotiating, you can make each of your concessions to the opposing party, painful to them.

Well, we're on a tangent and I apologize. However, a lot of the getting funded process comes down to negotiation. VCs will use all their leverage (mainly, your need for capital) to get you to acquiesce in negotiations, and give them a deal which overwhelmingly favors them in most conditions.

One common trick is to make an offer with a 1 or 3 hour window. They don't want you to shop the offer to other funds. They aklso throw in all kinds of exclusions and conditions to get money back even if it fails, to control apportionment of options, first right of investment, (second round) etc.

Your principal strategy in these events is *balls*, and patience.

We'll talk more.

SG thanks for teh input

 

[HappyScrappy]

well, I just spoke with my family that is in this law field and they are going to help me out on that side, so this is good.

thanks for the advice guys - feel free to add more or to email me if you like.