Today I will meet with A.C.'s lawyer to set up the incorporation details and begin construction of the stock option program. Then we'll prepare a negotiating plan for the upcoming term sheet. This is part of the birthing of a new enterprise. At such moments a great lawyer is as valuable as a doctor who helps deliver the baby. I learned the hard way in the past that you get what you pay for with lawyers. The amazing thing I found was that the cash for the best is less than others less able. The mistakes and errors are what are the most expensive cost of picking a poor lawyer.
Your lawyer must be experienced with venture capital closings. That is the process of getting to a term sheet and then to cash in the bank. Until it is in the bank, you have not closed on your financing. A lot can go wrong along the way. Yesterday I was told by a VC that Limelight had been raising a lot of money in a fresh round of financing. Several VCs had joined Goldman Sachs the Wall Street firm to do the deal. One day before the closing, Limelight got sued by Akamai. The VCs dropped out. Goldman decided to do the deal. It could have just stopped and the deal would have been dead. Lawyers know how to help you with bad news and good. They are able and willing to go the extra mile with you. Pick them wisely.
There are also a lot of tricks in pricing a deal. A great lawyer knows what to do and what not to do. He will keep you legal and ahead of the power curve, on the best side of the deal. And he will keep the deal rolling to conclusion.
There are also intellectual property issues and patents and trademarks and a lot more to work on with a lawyer. Many startups are incorporating overseas because businesses are immediately global. You need a skilled lawyer to do that.
BOTTOM LINE: Pick your legal counsel wisely. Search for a person familiar with VCs and their special ways. Look for wisdom and street smarts. Such a lawyer will be a real counselor, a business adviser and become your friend. Take you time and make a good choice. It's worth the effort.