5/31/22 - Brian + Twos Guys advisor agreement
by Parker · 77 things on Twos
- ✓ How do you make the call between strategic advisors and early advisors when you feel like you don't know anything? Who should get equity?
- ✓ Business insurance? General liability and EPL coverage
- ✓ What do we need to have in order to raise money?
- ✓ What law work will we need for fundraising?
- Cooleygo could be good and cheap
- Cheap corporate lawyer
- Bluesky law filings
- Securities in the states where our investors are located
- 1.25 in seed, no term sheets, just a SAFE agreement, discount rate (factors in when we do a priced round, 15-30%), value cap (max value the discount applies to), new investors won't like what you gave the earlier investors
- Critical to think about next financing round
- Finwick series seed terms and investor agreement
- ✓ What law work will we need for hiring?
- In whatever state, unemployeement account in that state, tax account, withhold wadges and send to state of tax, gusto (payroll), before you hire your first employee, w-2, 1099 for consultants, offer letter, fire for any reason, at least not unlawful, pay you x, make sure in complicnce with overtime, trade secret protection provision, non moonlighting clause, IP while they are working for you, offer letter is the terms of employement, executive can be taken from other companies drafted by cooley or jones day, choice of law in the agreement, hire, give flexibility and they won't sue you
- ✓ I saw the Cash in stock consideration in the document you sent over and the in-kind. We didn't pay for ours is there anything we need to do?
- Legal structure wont make or break business
- No activeley working in day to day opening doors
- Not in your business day to day
- Corporate legal on legal side in Florida or California startup specific
- Set up par value .00001 save in taxes
- Priced round, per share price, to value shares outstanding, valuation is based on what people are going to pay for it
- Debt based investor for safe or specified amount into equity on discouned basis
- Pay your shares
- Registering your securities
- Cautious for Clerky, legal work isn't too expensive especially for a startup
- $8000 in startup lawyer
- Due dilligence: product, market, corporate records, get it fixed before or after
- Develop product and market and finding people to
- Be catious of lawyers when dealing with us
- 6-8 grand, 5500 for everything to set it up
- Unpriced round go with a SAFE. Don't walk away from money. We are in the business of fundraising. Walk away from the wrong deal. Debt instrument. Or value our company
- Walk away from a bad partner with misaligned values. Think of it as a marriage
- They will be on the board
- No voting rights if it is a SAFE
- For a priced round they will demand voting rights
- Strategic investor doing follow on. You want to maintain control on the board. Who we take money from and the direction of the company
- Two sides of the business: product and manage, financing, legal, fundraising
- Sit at the table but non voting, observational member
- Series A will be a handful of investors, 5 million, couple million each, and only
- Until we can get our own, we are living
- Financing
- California counsel group
- Florida with outside counsel
- 70% focus should be fundraising
- You can protect the code itself, hard to protect the idea, can protect the code, patent on the code that drives the business
- Has some feedback to share. Quirks he does not like
- Completed state in new thing
- When he adds a list, pretty good to manage to-dos list and track and calendar
- Likes it, has been using it
- We've talked about it and this is something we want to do and have you on our advisory board
- Build out base users
- Likes the connecting and share
- Smart play and a lot of other opportunities to charge for different surfaces, database collector, sell to third party, venmo, quasi bank
- Thinks we are on to something
- Off market terms, may be taking advantage of lack of experience
- Right place at the right time
- Ev is the man
- Law is scary but it isn't what will make your business successful
- We can fix all our legal mistakes. There is nothing you can't fix. You can still fix that
- Law is just scafolding
- All companies built while they were flying. Didn't care about the legal issues
- Ongoing daily interactions
- Friends and family or pre series a investors?
- How do we take the traction?
- Do research for who are the investors in this space at the institutional level, there are institutional investors that would investor
- Horse race works at series a, SAFE note you just want people who are going to come to the table
- Apply to same terms across the board
- Trying to figure out what our valuation is. We got an offer for x, can you come up?
- Convert into equity. Keep it low. Neither of us can value our company. Without revenue and a lot of users
- Terms to bring money in today. One big name investor will open doors
- Ask questions about them, egomaniacs, investors, ask questions about them, respond back, just engage with them over and over, they will buy in overtime, ad-hoc mentors whether they know it or not
- Give him some time, follow up, acknowledge input, acknowledge he is a rockstar without being a kissass
- Send him a handwritten letter to thank for his input as a person and a business person, appreciate you hearing our story, we think it is useful, we want to keep you egaged
- Big name will open doors
- Money, friends, people will invest in him again
- Found his purpose, play into that
- Medium may drop off
- Be cautious of Ev