From Click to Contract: Why Reviewing Standard Terms Matters

I came across a thoughtful essay by José Ancer partner and CTO at Optimal [The Problem with “Standard” Term Sheets (including YC’s] - a bit old (2019) but still highly relevant. He makes some great points using YC's Series A Term Sheet as an example. (the bullets

Master Service Agreement (MSA) : Key Terms for B2B Companies Selling to Larger Enterprises

When you're a smaller company (vendor or supplier) about to work with a big company, you'll likely run into something called a Master Service Agreement (MSA). 📜 It's basically the rulebook that sets out how you'll work together. Signing this document is usually

🌟Starter Plan is now available : Free Trial for You 🌟

Hello there! We're thrilled to share some fantastic updates from JIGO, your go-to contract analytics platform for B2B companies. 🚀 At JIGO, we’re all about simplifying the complex – and our latest enhancements are designed to do just that, ensuring you spend less time on paperwork and more on

[Influencer Agreements] Payment Systems - Flat rate & Commission based

You've built a following, and now you have a possible Influencer contract with the brand. What is the payment method you should push for? Flat Rate? Monthly? Fee per post? Travel coverage? There is no RIGHT system, but what is the most common system based on data? Flat

Startup Accelerators (US) Participation Fee : No

Accelerator asking for fees to participate in their program. Is it a red flag? Maybe or may be not. Is it market? No, its not. NO There seems to be different perspectives around Accelerators charging startups a participation fee. There are some good arguments from both sides. * LinkedIn Post (and

YC Post money SAFE = Full Rachet Anti-Dilution?

There is an interesting point regarding YC SAFES (post money). It (discreetly) has an anti-dilution clause that is not market at all : Full Rachet Anti-dilution First of all... What is an Anti-Dilution clause? a provision which protects an equity holder from dilution due to subsequent equity issuances (issued either directly

[Survey] Insights on Korean Startups Seeking US Investment

Published Date : May 16, 2024 We've recently seen organic increase in usage from startups outside the United States. This trend makes sense, since even seasoned entrepreneurs can find US business norms and market expectations confusing without the right information and knowledge. So naturally, we conducted a data analysis

Co-founder equity split : close to even

Super common question startup founders have. “How should I split equity with my cofounder?” There are conflicting advice on how equity should be split between co-founders. Y Combinator famously advocates for equal split, and others provide calculators to split the equity "fairly". What does the data say about

[Startup Investment] Pay-to-play : No

You see a 'play to play' provision in an investment offer from an investor. What is it and is it market? Pay to play : no What is 'play to play'? As the name suggests, “pay-to-play” provisions require existing investors to pay (i.e., invest) in order

[Startup Investment] Drag Along Rights - Yes

'Drag along rights' actually sounds scary. But based on statistics you'll probably see this in your early investment contracts for your startup. But is it common / market? Yes Prevalence of Drag-Along Rights The Venture Beacon report by Aumni, a comprehensive analysis of investment contracts up to

US startup accelerator investment : $$ of %

You got accepted to an startup accelerator. Congrats! Now you need to read and the evaluated the actual terms before you accept the offer. Evaluation of the investment terms is going to be very subjective and nuanced. But let's compare the 'investment dollar to equity' exchange

[Funding] (pre)Seed Round instrument - Post Money Cap only SAFE

If you're going to raise capital for your startup, you need to define the instrument. Priced round vs non-priced. SAFE vs Convertible Note. So forth. There is no right answer but what's the most common (market) financial instrument for (pre)Seed rounds? According to data its.

Building Your first startup Business Stack: A Playbook for Maximizing Benefits Programs from the beginning

TL;DR How to setup and run your business stack with little to no cost (for the first few months) Many products have 'perks/benefits' that are essentially referral partners that provide discounts or credits if you signup through their link. You chain together these referrals to building

[NDA] Non-compete : Depends

Legality around 'non-compete' is complex, in that every state in the US has different approaches, and some states outright declare them unenforceable in certain situation. So talk to a legal professional. <sefarth.com> Are Non-compete clauses common (market standard) in NDAs? Depends on the context, it

[NDA] Indemnification - No

You final got Big Corp to listen to your sales pitch, and now they want you to sign an NDA. No problem. You see 'indemnification' in the NDA. Is this market? including 'Indemnification' in NDAs is NOT market Indemnification is an explicit covenant to pay compensation

[NDA]'Non-Solicit' Clause : No

You get an NDA to sign from Big Corp. You see a 'non-solicit' which prevents you from poaching employees from them. Is this clause standard in NDAs? There may be circumstances that a non-solicit clause may be needed, but just purely based on data, most NDAs do not

[Funding] Company Covers Investor Legal fees : Yes - capped at $30K

The startup covering (a portion of) legal fees of the investor. 🤷🏼‍♂️🚩 When I received my first ever investment term sheet this was a section that raised red flags in my mind. But turned out be totally industry norm. Its one of those things that look weird coming from the outside

Advisor Share Vesting : 2 year vesting with no to 6 month cliff

You want to bring on a great advisor, you agreed on the amount of equity (see this post on what's market for Advisor Equity). But what about vesting schedule? Should there be a vesting schedule and if so what would that look like? Based on what's

NDA Term - 2 years

You're trying to sell to BIG CORP. They ask you to sign an NDA prior to discussions. BIG CORP sends you an NDA that says the duration is 7 years. What's standard though? 2 years (24 months) Based on a survey done by Business Law Center

SAFE discount : 20%

updated 7/23/2024 What's the most common Discount for SAFE investment? 20% Quick note : there is a distinction between Discount and Discount Rate, where Discount Rate = 100% - Discount. Typically conversations would be about Discounts. (e.g. We'll invest with a SAFE with a 20%

Dividends : 7-12% non-cumulative

Dividends are not the focal point in startup investments. I've even heard an investor say she has never seen a startup actually pay dividends. But its there nonetheless in startup investment contracts. So what is market? It seems to be... 7-12% Non-Cumulative Rates Was unable to find a

Lose Board control : Series B

A 'Board of Directors' is required for corporations in the US. And the board will grow and evolve as a company progresses (and as investors ask for board seats). But when can founder expect to lose control of the board? Series B Let's look at the

Thank you 2023, Hello 2024

Thinking about the ups and down of 2023, and I realized I had so many things to be grateful for. And thinking about 2024, I realized there was so much things I was look forward to. Looking back at 2023, I'm grateful for..... * Everyone on the team, now

Jigo AI : Version Alpha is now live!

Hello Startup Founders! We're thrilled to share some exciting news with you! After months of hard work and dedication, our team is ready to unveil our first (alpha) version of Jigo AI : a Copilot for contract analysis. The automated diligence AI tool for your contracts and agreements. 🚀What

Option Pool : 10-20%

What's market for Option Pool size for US startups? It seems to be.... 10%-20% Though there are some variance on the recommended % of shares that should be allocated to the Option Pool, the general consensus seems fairly consistent. The best and latest source of data is, again,