This content was created by GHION.AI . This content was uploaded by GHION.AI . This is a YouTube talk titled "The Role of Lawyers in the Startup Ecosystem" (created 2017-12-13). It is a single-speaker presentation in English in which an experienced lawyer discusses how lawyers help startups: practical introductions to mentors/investors/advisors and service providers, incorporation and company structuring, advising on founder equity splits, negotiating technology licenses (example: Mosaic/Netscape and university OTLs), venture financings, customer contracts, public offerings, mergers, board attendance and business advice drawn from roughly 30 years of experience.
Chapters
So the question was what role do lawyers play in this ecosystem. I touched on a few things so far. One is just helping companies get off the ground. How do you do it? And that's less legal at the beginning than it is practical. One of the things that we do is we make introductions to founders of a startup company to other mentors, to angels, to just advisors to venture capitalists to accountants to bankers to search firms to, you know, whatever resources, you know, real estate brokers, whatever services somebody needs just to get them off the ground. We certainly do the legal work. We do the incorporation. We advise on, you know, how the company ought to be structured. An example is I had a startup company 3 or 4 years ago. 11 students from MIT. They all quit MIT in their senior year without graduating to start this company. They moved out to the West Coast, and they got venture capital, and they decided— I know Fern Mandelbaum talked about this if you were here last week— they decided that they were all 11 equal in value to the company, and they would all have equal financial stakes in the company forever. And when I heard that, when they were all in the conference room, I said, you know, this isn't the right answer. I don't know what the right answer is, but I tell you, this one's not the right answer. You're not going to have 11 equal contributions here. And you're going to have to figure out what the hierarchy of ownership is before the venture capitalists figure it out for you. And then they went to see the venture capitalists. And the venture capitalists said the same thing. This isn't right. Go figure it out. And they asked the venture capitalists. And the venture capitalists said, I don't know yet. Figure it out. Came back and, you know, I certainly didn't know, but I sort of forced them to think it through. And we sat down at a whiteboard and so on talked about what the roles were and told them what I thought were kind of relative norms of how the equity would be divided up. And, you know, they came to a conclusion and juggled it and came up with something that was acceptable to the investors. And then, of course, there's all the normal legal work, you know, doing the contracts. You know, we helped Netscape negotiate the license for Mosaic from the University of Illinois. We helped negotiate licenses from the Office of Technology licensing here at Stanford. We do the legal work for venture capital financings, do customer contracts, do public offerings, do mergers, whatever. And go to board meetings and give advice. People say, you know, this is a problem that's perplexing us. We've often seen it before. I've been doing this for 30 years, and there's some accumulated wisdom there that you can give some business advice from time to time. Obviously, you know, we aren't venture capitalists, we are business people because we're kind of like Forrest Gump, we're off to the side there, but we can help in a subtle way, I think.
