Streamlining the Seed Round: Ted Wang and Andreessen Horowitz Put Open-Source Investment Documents Online
Poster: SySAdmin
Posted on March 2, 2010 at 9:07:01 AM
Streamlining the Seed Round: Ted Wang and Andreessen Horowitz Put Open-Source Investment Documents Online
MOUNTAIN VIEW, Calif. and MENLO PARK, Calif., March 2 -- Investors and entrepreneurs will be able to dramatically reduce the costs and time involved with financing a seed round company - and move more quickly toward bringing their product or service to market - thanks to new documents created and made available online by Ted Wang of Fenwick & West. The documents were developed with input and insight from dozens of entrepreneurs, attorneys, venture capitalists and investors, including Andreessen Horowitz, Baseline, Charles River Ventures, SV Angel (Ron Conway), First Round Capital, Harrison Metal Capital, Mike Maples, Polaris Ventures, SoftTech VC and True Ventures.
The documents, located at SeriesSeed.com, have already been used to help fund several companies. Andreessen Horowitz, which was formed last year with the intention of aggressively funding innovative startups, will start using the documents to accelerate its mission of bringing cutting-edge technology to the marketplace as efficiently as possible.
"At the seed stage, the goal is to help an entrepreneur turn an idea into a product," said Ben Horowitz, General Partner of Andreessen Horowitz. "The legal documents to do a seed round should be a lot less complicated and cheaper than those for a major round of funding. We think Ted's work is a great start towards that goal."
The Series Seed documents were created because, for a number of reasons, the amount of money to launch a startup has been drastically reduced; a new category of seed investors have emerged to fund this stage of a company's growth. However, the financing documents that lawyers were using were from a past era when it took several million dollars to fund a company.
"A hundred pages of documents for a million-dollar investment doesn't make sense," noted Wang. "We wanted to create a simpler and standard set of documents that would be acceptable to both entrepreneurs and investors. They are short, so they reduce costs; we put them on the Web so that they're transparent; and they preserve essential rights and protections without favoring any one party so that entrepreneurs, Venture Capitalists and angel investors will not need to change them."
Startups Blippy.com and Civic Solar have already used the documents, and Wang said he is hearing from more Venture Capitalists and entrepreneurs every day who are using them. "We hear from our entrepreneur friends that our seed round cost half as much and took half as much time to close as theirs did," said Ashvin Kumar, CEO and Co-Founder of Blippy.com.
The participation of firms like Andreessen Horowitz and investors like Ron Conway are key to the open-sourced documents' adoption. If the documents gain widespread acceptance, Wang hopes they will "tip" and become the de facto standard for seed rounds.
The SeriesSeed.com documents consist of a Certificate of Incorporation, Stock Purchase Agreement, an Investor's Rights Agreement and a Term Sheet. The site will be open to feedback, and Wang considers them 'living documents' - if there are comments or emailed suggestions that make sense, he will incorporate those changes and users can subscribe to the site's RSS feed for updates.
A full description of the documents and their rationale can be found at http://www.SeriesSeed.com.
About Andreessen Horowitz
Andreessen Horowitz was established in June 2009 by entrepreneurs and engineers Marc Andreessen and Ben Horowitz, based on their vision for a new, modern VC firm designed to support today's entrepreneurs. Andreessen and Horowitz have a track record of investing in, building and scaling highly successful businesses. Andreessen Horowitz is based on Sand Hill Road in Menlo Park, California.
About Fenwick & West
Fenwick & West provides comprehensive legal services to venture capital firms and to technology and life sciences startup clients of national and international prominence. The firm has more than 30 years of experience crafting innovative solutions to the business challenges that arise at the intersection of technology and the law. Fenwick & West clients value our attorneys' deep industry experience and understanding of their technologies. Startup clients include Amyris Technologies, Chegg, Facebook, Linden Labs, Quantcast, Silver Spring Networks, Twitter, and U.Stream. The firm produces the quarterly Fenwick & West Venture Capital Survey which details venture financing trends during the prior quarter. Fenwick & West has been ranked by American Lawyer Media and Global Securities as one of the top 10 IPO issuer's counsel in the United States and was recently ranked by Corporate Board Member as one of the top 5 corporate law firms in the San Francisco Bay Area for publicly traded companies.
Contact:
For Fenwick & West
Merredith Branscombe
303.327.5478
MBranscombe@Hoffman.com
For Andreessen Horowitz
Margit Wennmachers
415.392.8282
Margit@outcastpr.com
Source: Fenwick & West
CONTACT: Merredith Branscombe, +1-303-327-5478, MBranscombe@Hoffman.com
for Fenwick & West; or Margit Wennmachers, +1-415-392-8282,
Margit@outcastpr.com for Andreessen Horowitz
Web Site: http://www.seriesseed.com/
http://fenwick.com/
MOUNTAIN VIEW, Calif. and MENLO PARK, Calif., March 2 -- Investors and entrepreneurs will be able to dramatically reduce the costs and time involved with financing a seed round company - and move more quickly toward bringing their product or service to market - thanks to new documents created and made available online by Ted Wang of Fenwick & West. The documents were developed with input and insight from dozens of entrepreneurs, attorneys, venture capitalists and investors, including Andreessen Horowitz, Baseline, Charles River Ventures, SV Angel (Ron Conway), First Round Capital, Harrison Metal Capital, Mike Maples, Polaris Ventures, SoftTech VC and True Ventures.
The documents, located at SeriesSeed.com, have already been used to help fund several companies. Andreessen Horowitz, which was formed last year with the intention of aggressively funding innovative startups, will start using the documents to accelerate its mission of bringing cutting-edge technology to the marketplace as efficiently as possible.
"At the seed stage, the goal is to help an entrepreneur turn an idea into a product," said Ben Horowitz, General Partner of Andreessen Horowitz. "The legal documents to do a seed round should be a lot less complicated and cheaper than those for a major round of funding. We think Ted's work is a great start towards that goal."
The Series Seed documents were created because, for a number of reasons, the amount of money to launch a startup has been drastically reduced; a new category of seed investors have emerged to fund this stage of a company's growth. However, the financing documents that lawyers were using were from a past era when it took several million dollars to fund a company.
"A hundred pages of documents for a million-dollar investment doesn't make sense," noted Wang. "We wanted to create a simpler and standard set of documents that would be acceptable to both entrepreneurs and investors. They are short, so they reduce costs; we put them on the Web so that they're transparent; and they preserve essential rights and protections without favoring any one party so that entrepreneurs, Venture Capitalists and angel investors will not need to change them."
Startups Blippy.com and Civic Solar have already used the documents, and Wang said he is hearing from more Venture Capitalists and entrepreneurs every day who are using them. "We hear from our entrepreneur friends that our seed round cost half as much and took half as much time to close as theirs did," said Ashvin Kumar, CEO and Co-Founder of Blippy.com.
The participation of firms like Andreessen Horowitz and investors like Ron Conway are key to the open-sourced documents' adoption. If the documents gain widespread acceptance, Wang hopes they will "tip" and become the de facto standard for seed rounds.
The SeriesSeed.com documents consist of a Certificate of Incorporation, Stock Purchase Agreement, an Investor's Rights Agreement and a Term Sheet. The site will be open to feedback, and Wang considers them 'living documents' - if there are comments or emailed suggestions that make sense, he will incorporate those changes and users can subscribe to the site's RSS feed for updates.
A full description of the documents and their rationale can be found at http://www.SeriesSeed.com.
About Andreessen Horowitz
Andreessen Horowitz was established in June 2009 by entrepreneurs and engineers Marc Andreessen and Ben Horowitz, based on their vision for a new, modern VC firm designed to support today's entrepreneurs. Andreessen and Horowitz have a track record of investing in, building and scaling highly successful businesses. Andreessen Horowitz is based on Sand Hill Road in Menlo Park, California.
About Fenwick & West
Fenwick & West provides comprehensive legal services to venture capital firms and to technology and life sciences startup clients of national and international prominence. The firm has more than 30 years of experience crafting innovative solutions to the business challenges that arise at the intersection of technology and the law. Fenwick & West clients value our attorneys' deep industry experience and understanding of their technologies. Startup clients include Amyris Technologies, Chegg, Facebook, Linden Labs, Quantcast, Silver Spring Networks, Twitter, and U.Stream. The firm produces the quarterly Fenwick & West Venture Capital Survey which details venture financing trends during the prior quarter. Fenwick & West has been ranked by American Lawyer Media and Global Securities as one of the top 10 IPO issuer's counsel in the United States and was recently ranked by Corporate Board Member as one of the top 5 corporate law firms in the San Francisco Bay Area for publicly traded companies.
Contact:
For Fenwick & West
Merredith Branscombe
303.327.5478
MBranscombe@Hoffman.com
For Andreessen Horowitz
Margit Wennmachers
415.392.8282
Margit@outcastpr.com
Source: Fenwick & West
CONTACT: Merredith Branscombe, +1-303-327-5478, MBranscombe@Hoffman.com
for Fenwick & West; or Margit Wennmachers, +1-415-392-8282,
Margit@outcastpr.com for Andreessen Horowitz
Web Site: http://www.seriesseed.com/
http://fenwick.com/