In startup hotbeds like Silicon Valley, Boston, and even New York it’s common for law firms to work out special arrangements with startups who generally have little cash (usually that’s why they need a law firm in the first place, to raise cash). These law firms are willing to defer payment until the cash is raised or even accept equity as payment.
Law firms in Indianapolis are also familiar with special arrangements for startups.
At Pocket Tales, we’ve looked to Nick Mathioudakis from Baker & Daniels for help, but I’ve also seen Barnes & Thornburg, Alerding Castor, and to a lesser extent Ice Miller (although right now they have a case study for a startup on their homepage), hanging around the Indianapolis startup scene.
This is great for the startup but obviously there’s something in it for the law firm too. Assuming they continue to survive, startups generally require a lot of legal work and a successful startup can be a big revenue source for law firms. Mint Founder Aaron Patzer estimated legal costs of $10,000 - $50,000/ month not including special events like incorporation and additional rounds of fundraising.
What if you’re not quite ready to seek professional legal advice?
Mint CEO Aaron Patzer - Presentation on Budgeting, Hiring, and Raising Capital
The following video and presentation contain actual numbers from Mint.com’s startup story. It shows how Patzer and team budgeted expenses, hired developers, and raised multiple rounds of capital from “Garage” round to exit.
And it’s all wrapped up into a succinct 20 minute presentation.
This is extremely useful information; especially, for early-stage Indiana tech startups who see few if any examples of this type locally.
Patzer’s revenue model slide is particularly ingenious.
The primary purpose of this blog is to record for prosperity the experience of starting my first company. I’m a forgetful and nostalgic person. I expect to search this blog constantly for my own advice, for quotes of inspiration, and for links to useful resources. Also, many years from now, I expect to read these posts and laugh at how much and how little has changed.
The secondary purpose of this blog is to inform and connect other early stage entrepreneurs in Indianapolis, IN. There are no shortage of people telling me that Indiana is not the place to start an emerging technology/ low-cost internet company. There is little to no capital here for pre-revenue companies and similarly, its harder to find developers and other professionals desiring to work for a startup.
Brennan Knotts is the founder of Pocket Tales and was formerly the Director of Marketing for internet video tech startup Cantaloupe.tv. He is also an alum of the Governor Bob Orr Indiana Entrepreneurial Fellowship.
“The Man in the Arena”
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the MAN who is actually IN THE ARENA, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”
-Theodore Roosevelt, CITIZENSHIP IN A REPUBLIC, “The Man in the Arena”
In startup hotbeds like Silicon Valley, Boston, and even New York it’s common for law firms to work out special arrangements with startups who generally have little cash (usually that’s why they need a law firm in the first place, to raise cash). These law firms are willing to defer payment until the cash is raised or even accept equity as payment.
