Startup Law Wisdom from a Hacker News Secret Asset

In response to my post on hiring a startup lawyer, Hacker News commenter Jacquesm plugged startup lawyer George Grellas:

I’d like to plug George Grellas in case you’re not aware of him, just reading his comment history should give you a lot of food for thought. He’s one of HN’s secret assets.

I was not aware of him, so I read his comment history. His “comments” are often essays. These essays, written by a veteran Silicon Valley attorney, are too valuable to remain “secret assets.” So here are the Grellas essays that are, in my opinion, the most useful for tech startups. 1


Seed Capital and SAFE

  • Bad Notes on Venture Capital. 9/2014. Seed funding goals: (1) raise money as a bridge to Series A to reduce dilution; (2) keep equity incentives priced relatively low to assemble quality team without tax grief; (3) reasonable transaction costs; (4) close quickly. Original post by Mark Suster.

  • Announcing the SAFE, a Replacement for Convertible Notes. 12/2013. “It is at once simple and subtle and it covers a lot of nuanced legal technicalities that must have required some pretty careful thought to get right.” Original post by Paul Graham. Note any comments by “clevy” – that’s Carolyn Levy, YCombinator Attorney and author of SAFE.

  • Kima15: $150K for 15% in 15 days. 12/2013. How does a Kima seed round compare with YC?

  • A Founder-Friendly Term Sheet. 6/2013. “I have rarely seen a significant VC deal in which the option pool is not brought in as a back-door way of lowering valuation for the founders. Removing that bit of legerdemain from the valuation equation is really quite stunning.” Original post by Sam Altman.

  • Startup Economics 101, or, How Long Until We’re Dead? 3/2011. “Be cautious about deferred fees in dealing with lawyers. These have their legitimate role in the world of startups but, as with any other form of “easy credit,” they can wind up costing you far more in the long run than if you simply negotiate good rates or fixed fee amounts for work you have at hand.”

  • Ways That Startup Lawyers Overcharge . 11/2013. “Watch out for padded bills that have vague descriptions of what was done, beware getting billed for substantial amounts of lawyer learning time, scrutinize all cases where double billing might be involved, make sure billing rates match your needs as a company (big firm vs. small firm), try always to get estimates in advance, negotiate fixed fees or caps where appropriate…”

  • “Fucking Sue Me” by Philip Kaplan hit Hacker News in 2011 and again in 2013. Grellas wrote two different responses, topping the comments in both 2011 and 2013.

  • Show HN: Incorporate Your Startup Online with YC’s Forms (built by two lawyers). 2012. The Clerky founders have “toiled at length in their field, identified key pain points bedeviling the user, and developed a service that deals with them not only effectively but, one might even say, brilliantly.”

  • SimpleLegal (YC S13) Reduces Legal Bills With Machine Learning. 8/2013. A history of legal Billing practices.

Employee Stock Incentives

Employee Non-Compete, Non-Disparagement, and Sexual Harassment

Intellectual Property

  • Why First Round Capital funded a lawsuit (against Best Buy). 12/2012. “A wanton malefactor such as Best Buy here had better watch out if it meets a determined adversary who is willing to play out the fight and expose its wrongs. I call this ‘slamming it to them’ and it works more often than not if the process plays out in full.”

  • Judge Posner: Why There Are Too Many Patents. 7/2012. “It is a mistake, in my view, then, to swing too broadly in trying to fix things (as by advocating abolition of all patents) or to be so timid about the issues that reform is marginal at best and ineffective in dealing with the current crisis of an over-abundance of essentially worthless patents.” Original post by Hon. Richard Posner.

  • Ask HN: Would you Trademark Your Startup?. 9/2010. “If you have a truly great name, and you are at an early stage, you can easily have the name poached. Since a trademark registration can prevent that risk, it can be helpful.”

Forming a Company for Your Startup

  • Why Incorporating My Startup Was My Worst Mistake. 4/2011. “Corporations are not particularly hard or expensive to start, maintain, or dissolve - but you need to be at a stage of life where a thousand dollars here or there is not a major burden.”

  • If I Launched a Startup. 8/2011. Some observations on a sharp, concise checklist.

  • What’s Wrong with an LLC. 4/2010. “The biggest practical advantage of an LLC is also its biggest practical limitation, and that is that it is like the siren song tempting founders to do quickie, online setups for their startups ‘just to get started.’”

  1. Caveat: These links are worth reading, but they may not be the right advice for your particular company. I am not associated with George Grellas, he does not endorse this post, and his views may have changed in the years since some of his essays were written.