As a Serial Internet entrepreneur, my experience has always been that the legal process of starting a new venture was time consuming and expensive. In addition, the corporate formation and legal documents that were created would inevitably either be improperly done, incomplete or not in line with the expected norms of experienced investors.
With Viddy, I decided to take a different approach in order to save money and to ensure that the corporate structure and legal documents were bulletproof, since I was seeking to raise capital from venture capitalists in Silicon Valley. I decided to do it myself!
My first step was to search the Internet and see if there were how-to guides and templates to launching a new Internet venture.
A quick, 5 minute search for “free Internet Startup tools, Free Internet Legal Documents, etc.” brought me to a post on one of my favorite Tech Blogs, ReadWriteWeb, that referenced a new, free, self-service tool called Founders Workbench created by Goodwin Procter to help entrepreneurs navigate the legal and organizational challenges that all startups face. The article claimed that this site offered a series of fill-in-the-blank and multiple choice questions that would provide guidance and documents to launch my business.
Of course, this sounded too good to be true, but I clicked the link anyway and went to check it out.
The website looked professional and on the homepage asked me if I wanted to: 1) Organize my Company; 2) Protect My Ideas; 3) Build My Team; 4) Incent My Team and 5) Create Legal Documents.
It sounded about right, so I clicked on the “Create Free Legal Documents” link which brought me to a Document Driver page that claimed to produce a suite of documents to form my new venture as a Delaware Corporation (Certificate of Incorporation, Stock Agreements, Confidentiality and IP Assignment Agreements, By-Laws, Stock Certificates, Founders Agreements, etc.). Still a bit skeptical, I then clicked on the “Create Documents” link and remarkably, a self-serve wizard popped up that did exactly what it claimed to do – I was asked questions, filled in forms and all the appropriate documents were created.
In starting prior companies, other law firms had charged me over $25,000 for just this process alone.
I did have a few questions specific to my company (S Corp vs. C Corp, how many shares to issue, etc.), so I sent a blind email on November 25th.
Now, here’s where things started to get weird:
Within 4 hours I got a response back. At this point, I decided to research Goodwin Procter to determine if they are even a credible law firm. It turns out that they are one of the biggest law firms in the country and that their Tech Practice alone has a team of 160 lawyers representing 500 technology companies and over 200 venture capital and private equity firms.
I am then connected to Anthony McCusker, Partner and Co-Chair of the Technology Companies Group based in Menlo Park, who agrees to an intro call over Thanksgiving weekend. Prior to the call, I did a Google search on Anthony and see him quoted in Business Week as having represented AdMob in its sale to Google and Flip Digital in its sale to Cisco.
Since Viddy was setting out to launch a Social Mobile Video Service (a next generation Flip), on our call Anthony shared his POV on the category, the types of deal structures and terms that were market for our stage company, financing strategies, etc. He also then offered to have his team expedite the formation of our business, and the company was formed and all of our corporate documents were created in 4 business days. Amazing!
In mid January, I shared with Anthony and his team at Goodwin Procter that we had a demo of our app and were ready to try to raise outside financing from Venture Capitalists. I asked him if he had any suggestions on how to structure the deal and if he had any potential investors he could introduce us to.
Now, things got even weirder.
Anthony proceeded to run through a list of all the Tier One VC Firms and Super Angel Groups in Silicon Valley, explained the pros and cons of each, shared with me who he knows and who he thinks is the appropriate partner at each firm for our deal – and he offered to send out emails to them to help set the meetings.
At this point, I had yet to receive a bill from Goodwin Procter. I asked what I owed them and when I needed to pay them, and the response was extraordinary: “After you get funded”.
So, as promised, Anthony sent out 20 emails introducing me and our company to Partners at Sequoia, Accel, Battery, Bessemer, Redpoint, Greylock, etc., in addition to a list of high profile angel investors. I figured, at best, half of the investors might agree to meet to be polite and of that group, half would cancel. As it turned out, all 20 Investors responded within 48 hours and we ended up with a series of meetings with 19 of the 20 potential investors.
Fast forward, -- we received a signed term sheet on March 21st and Anthony and his team at Goodwin Procter (Daniel Wright, the IP Attorneys, etc.) worked around the clock and negotiated and closed our $1.5 million Series Seed financing on April 1st, with firms/partners they introduced us to: Battery Ventures and Bessemer Ventures – two of the most respected venture capital firms in Silicon Valley.
Viddy officially launched in the App Store on April 11th and the response from the media and from consumers around the world has been extraordinary.
We are off and running, and I feel privileged and appreciative of the opportunity to be working with Goodwin Procter. They are a talented and passionate team, they are connected with the people who matter the most to our business (investors, partners, potential acquirers), they are champions for entrepreneurs and tech start-ups, and they are great at what they do.
CEO & Co-Founder
This post was authored by Founders Workbench.