When SeedLegals launched in 2017 in the U.K., I’d say many of us thought, “why has that not been done before?” After all, two things have happened that make this an obvious idea for a startup: startup funding rounds are now so common that there is no reason large amounts of automation could not be done. If you can buy a divorce online, surely you can organise funding rounds?
The second trend is the sheer level of automation happening in legal software today. After all, we now have “Uber for Lawyers” (Lexoo, Linkilaw, Lawbite) and AI-driven legaltech (KIRA, Luminance, ThoughtRiver). (Eventually, we will have blockchain smart contracts do ALL the work, but that’s for another time…).
So it’s not surprising that today SeedLegals announces it has closed a $4 million Series A led by venture capital firm Index Ventures (London/SF/etc.) with participation from Kima Ventures (Paris/TelAviv), The Family (Paris) and existing investor Seedcamp (London).
SeedLegals says it now has 7,000 startups — capturing, it claims, 8% of all early-stage U.K. funding rounds — using its platform to manage the entire fundraising process and all related legal documents. The platform helps companies build and negotiate term sheets, shareholder agreements, cap tables, stock option allocations, EIS approvals, hiring agreements, NDAs and more.
It also has two new products: SeedFAST and Instant Investment, which enable startups to quickly top up investment between funding rounds.
If U.K. companies created more than 27,000 contracts on SeedLegals last year, the start-up reckons that saved them an estimated £4.5 million in legal costs. Normally, lawyers create custom documents for each transaction. That means 18 weeks, on average, to complete a funding round, with legal fees starting at £3,000 for a simple seed round to £20,000 and up for each side for later-stage rounds.
The platform replaces spreadsheets and Word docs with a database-driven platform. You enter data once and the system uses pre-built knowledge, deal data and document automation to dynamically build all the outputs.
Anthony Rose, co-founder and CEO at SeedLegals, says they have removed the “complexity, unnecessary middlemen, standardized and automated the processes, and that has really resonated with both founders and investors.”
Hannah Seal from Index Ventures, who joins the board with this round, commented: “SeedLegals
is making the complex process of fundraising straightforward for everyone involved.
“We closed this round on SeedLegals and have been impressed with the speed and ease of use. For startups who spend thousands on legal fees on agreements that vary little from company to company, this is an absolute no-brainer.”
SeedLegals was created by serial entrepreneur Anthony Rose, known in the tech industry for his work launching BBC iPlayer, and VC and angel investor Laurent Laffy, whose own portfolio includes consumer brands such as Graze and Secret Escapes .
Read more: https://techcrunch.com/2019/05/28/seedlegals-closes-4m-series-a-led-by-index-ventures-to-automate-startup-fundraisings/