I've been on a mission to dramatically reduce the legal costs of a venture financing. Our firm is doing our part. On many of our recent transactions, we've gone without counsel and have signed documents without negotiation. That takes out the investor counsel costs. And we've been pushing company counsel to reduce their costs. But we are still seeing company counsel costs of $15k or more on venture financings even with our "no negotiation" approach. I'd like to see venture financing legal fees get to $5k or less. I don't know why raising a venture round can't be like signing a lease on an apartment with standardized docs and a one page rider for any changes.
As we dig into the costs on the company counsel side, there are areas we feel can be improved and areas that cannot. The entrepreneur still needs an experienced counsel to explain the deal to them. That time and money is valuable to everyone involved. I'm hopeful that Brad and Jason's upcoming book will help reduce the time and money spent educating entrpreneurs on venture financings, but realisitcally the company counsel is still going to have to do some hand holding.
To read the full, original article click on this link: A VC: Paperless Financing Docs
Author:Fred Wilson
