Document service aims to make early fundraising rounds less expensive for entrepreneursBy Michael Liedtke, AP
Monday, March 1, 2010
New document service aims to lower startup costs
SAN FRANCISCO — Raising money shouldn’t cost startups so much money.
At least that’s the theory underlying the latest idea backed by former entrepreneurs-turned-venture capitalists Marc Andreessen and Ben Horowitz.
They worked with Silicon Valley lawyer Ted Wang and a few other investors to set up a system that is supposed to help startups work out the terms of their initial financing without running up big legal bills.
The service, called Series Seed Documents, became available this week.
It provides a template covering the basic issues that typically arise when entrepreneurs are trying to raise less than $1 million.
The goal is to minimize the need for legal advice so startups will have more money to spend on developing new products and services.
To get the ball rolling, the venture capital firm that Andreessen and Horowitz started last summer will bankroll startups relying on the Series Seed documents.
Andreessen, 38, has always delighted in shaking up the status quo. He is best known as a co-founder of Netscape Communications, whose graphical Web browser and initial public offering of stock ignited the dot-com boom in the mid-1990s.
Other investors endorsing the Series Seed template include Ron Conway, an early backer of Google, Facebook and Twitter, and the venture capital firm Charles River Ventures.
Horowitz, who has worked closely with Andreessen for more than a decade, predicts more venture capitalists will embrace Series Seed once they figure out startups can cut their legal bills in half by using the service’s template.
After all, as Horowitz is quick to point out, those fees are drawn from the money that investors pour into the startups.
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Tags: Careers, Documents, Entrepreneurship, North America, San Francisco, United States