This Week in Startups
Legal must-haves before raising capital with Becki DeGraw | Wilson Sonsini Startup Legal Basics
Aug 22, 2024
Becki DeGraw, a partner at Wilson Sonsini, specializes in guiding startups through legal intricacies essential for successful fundraising. In this conversation, she highlights critical legal oversights like cap tables and intellectual property assignments that founders often miss. Becki warns against the risks of DIY legal documents, emphasizing the value of professional advice. She also discusses employee stock option plans and the complex landscape of mergers and acquisitions, providing invaluable insights for early-stage founders.
21:21
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Quick takeaways
- Early involvement of legal counsel is essential for startups to navigate complex financing stages and avoid costly delays.
- Accurate cap tables and understanding financing structures are critical for startups to secure investment and manage ownership effectively.
Deep dives
Engaging Legal Counsel Early
Involving legal counsel early is crucial for startups reaching significant revenue milestones. Founders often underestimate the importance of having legal representation during key financing stages, which can lead to delays when issues arise. If counsel is only brought in after obtaining a term sheet, startups may face weeks of delays due to necessary cleanups of documents and structures. Planning ahead with legal support enables startups to be organized and prepared, which is essential as they transition into more mature phases of growth.
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