Question 1

What legal documents do I need for a Pre-Seed round?

Accepted Answer

The documents depend on the jurisdiction, company structure, and instrument selected. They may include founder agreements with vesting, an updated cap table, investment documents, an NDA, and intellectual-property assignments.

Question 2

What's the difference between a SAFE and a convertible note?

Accepted Answer

A SAFE and a convertible note are different instruments, and their legal, tax, and accounting treatment depends on the jurisdiction and terms. Compare conversion, maturity, interest, discount, valuation cap, and investor rights with qualified support.

Question 3

How much does it cost to hire a lawyer for a Seed round?

Accepted Answer

Legal fees for a Seed round in Europe range from €5,000-€25,000. AI tools like Outlex can reduce these costs by 50-70%.

Question 4

What is the 'option pool shuffle'?

Accepted Answer

It happens when investors require the option pool to be created from the pre-money valuation, diluting founders. Always negotiate the pool size and whether it's pre or post-money.

Question 5

Do I need a lawyer to review a term sheet?

Accepted Answer

Yes, highly recommended. Term sheets contain critical clauses on liquidation preferences, anti-dilution, and board composition that impact your control and upside.

Question 6

What's the typical timeline to close a funding round?

Accepted Answer

A typical round takes 3-6 months: 1-2 months of preparation, 1-2 months of pitching and due diligence, 2-4 weeks for negotiation and closing.

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