Founder Fridays No. 51
Helping startup founders and operators scale smarter.
Happy Friday.
I want to let you in on a secret. I’ve been working on something behind the scenes all year. I’m super excited to share it with you today!
Meet Ace - Chat GPT for startup law.
Ace is not your lawyer, but he can help you get up to speed on common startup legal issues. Think of Ace as your own personal AI legal assistant.
I can’t wait for you to try it out. Click here to join the waitlist.
The Problem: Startup legal research is frustrating.
Getting answers to basic startup legal questions is surprisingly frustrating. Founders have have two options either hire a lawyer or turn to Google / Chat GPT.
When you hire a lawyer you can have confidence that you’re going to get an accurate answer, but it’s slow and expensive. Nobody likes getting a $2,000 bill for a long-winded email that basically says “it depends”?
The other option, doing your own research with Google or Chat GPT is fast and free. Which is great, unless you care about having an accurate result.
Do you really want to risk the future of your company on a potential AI hallucination?
With the recent advances in generative AI, there’s got to be a better way.
The Solution: AI legal research assistant.
Ace is the best of both worlds: accurate, fast, and free.
He’s trained on over 240,000 words of verified, quality legal sources. So, Ace knows a lot. But he doesn’t know everything. And certainly doesn’t understand the nuance of your specific company.
Ace shouldn’t replace legal counsel.
But, he should help startups get up to speed quickly, engage their counsel more efficiently, and save time and money in the process.
The Backstory: Built by founders for founders.
For the last 15 years I’ve served as legal counsel to hundreds of startups. I’ve also taught entrepreneurship at 2 of the best law schools in the nation – Harvard and Cornell. But before all of that, he was a startup founder. Ace is the tool I wish I had as a founder. Hopefully it will make your startup journey just a little easier.
Click below to join the waitlist for Ace.
The Speed of AI
The artificial intelligence (AI) revolution just ratcheted up the speed bar for startups. You think you’re moving fast enough. You’re not. You are living in a unique moment. A transition period. And you’re running out of time. So much of what we think of as human is going to be newly located and enabled by software and silicon. This is a transition that will sweep across software, bio and every other industry. Moments like this only come around every 14 years or so, and it’s a privilege to be here to see it. But most founders will squander it: They’ll move too damn slow. Speed is the number one advantage of a startup. But now that generative AI is here, your definition of speed has to increase 10x. NFX (12 minutes)
VanMoof Crashes
VanMoof was the Tesla of the e-bike industry. Now it’s bankrupt. VanMoof’s greatest asset — its distinctive design — was also its biggest weakness. Where most bicycle manufacturers acquire their electric and non-electric components through established supply chains, VanMoof created bikes from scratch. Everything, from the sturdy frames to the tiniest gears, was designed by the company. This direct-to-consumer approach helped VanMoof distinguish itself from its rivals (it sold more than 120,000 bikes total, according to its website), but it also generated a host of technical, logistical and financial challenges. VanMoof, whose custom-made parts, which require custom-made tools to take apart, were a complete unknown for neighborhood mechanics. VanMoof had always struggled to keep up with repairs in-house. However, the latest models, which suffered from an unexpectedly large number of bugs, including malfunctioning batteries and stuck shifters, proved too much for the company to handle. The last ditch effort to raise an emergency round fell through, and they declared bankruptcy. Fast Company (5 minutes)
The Vibe is Off
Has your team lost sight of its purpose and the goals you’re working toward together? If so, it might be time for a team reset that focuses on realignment. Or, maybe your team just doesn’t feel like a team anymore? Maybe team members feel disconnected, invalidated or frustrated, and even minor issues are creating friction? In that case, your reset must focus on revitalizing your team dynamic. This article focuses on some approaches that managers can use to address alignment gaps to jumpstart a new, healthier, happier team dynamic. Here are 20 questions to ask when your team vibe is off. Harvard Business Review (7 minutes)
Founder FAQ: Who pays the legal fees in a funding round?
Unfortunately, it has become common practice for startups to be required to pay the legal fees of their investors. It’s unjust for so many reasons. However, until the term is removed from the term sheet, founders need to deal with it. Here’s the process: (1) Strike It. In every term sheet you ever receive throughout the entire lifecycle of your company, you should always strike it on the first round. Instead, suggest that both parties pay for their own legal fees. This is a very reasonable ask, and it’s accepted way more often than you’d expect. (2) Cap It. In the event that they won’t strike it, cap the fees as low as possible. Start with $5K for a seed and $10K for a Series A. For pre-seed deals, it’s uncommon for the startup to pay investor legal expenses. Westaway (5 minutes)
Startup Funding Guides
I’ve put together a series of guides to equip founders to excel at fundraising. These guides break down the deal term by term and give you negotiation tips so that you can speak to investors with confidence.
Move Fast. Don’t Break Things.
Hi! I’m Kyle. This newsletter is my passion project. When I’m not writing, I run a law firm that helps startups move fast without breaking things. Most founders want a trusted legal partner, but they hate surprise legal bills. At Westaway, we take care of your startup’s legal needs for a flat, monthly fee so you can control your costs and focus on scaling your business. If you’re interested, let’s jump on a call to see if you’re a good fit for the firm. Click here to schedule a 1-on-1 call with me.
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