There are 600,000 new companies created in the UK each year. Of those, around 100,000 are growth startups, meaning that they plan to build a team, and develop & launch a product or service. In the past people went to a bank to borrow money to fund their startup, today many of those growth startups are funded by equity investment – in other words by friends & family, investors and funds investing in the company for a stake in the company.
Every one of those deals needs complex legal agreements (Term Sheet, Shareholders Agreement, Articles and more) to provide all parties with the documentation they need to recoup their investment later, participate in the value created by a sale of the company, and get tax deductions for their investments.
Until now, the parties needed to use a law firm, which meant every deal was slow, expensive, error-prone, and done without any means of using data to inform founders of the deal terms they should and shouldn’t agree to. We spoke to Anthony Rose, Founder of SeedLegals, to find out how they are transforming this process.
Please can you start by describing in your words what your company is and what it does?
SeedLegals is a new website and platform that connects startups and investors, dramatically reducing the time, cost and effort for a UK startup to complete a funding round. SeedLegals transforms a process that used to take months and cost £5000 or more in legal fees into a step-by-step process that takes hours, with the cost to do all the legals for a complete funding round starting at just £700.
More importantly, the SeedLegals platform provides tutorials, all the needed documents, deal data and assistance from the SeedLegals team of legal and funding experts to help founders get investment ready, value their company, work out how much equity to give away, and understand every aspect of the funding round process.
What do you think makes it distinct to any other companies – what’s its USP?
SeedLegals is the only platform that’s a one-stop destination for doing a complete funding round. If you have investors lined up, there is just one place, SeedLegals, that you can reliably go to, that will let you complete every step of your funding round instantly and reliably.
The secret sauce is a combination of the deal data and VC knowledge that has been engineered into the SeedLegals platform and the documents coded on the platform, together with advanced document generation technology and workflow. SeedLegals transforms the current process of endlessly emailing redlined Word documents back and forward, with instantly updated agreements that can be built, negotiated, agreed and e-signed online.
What inspired you to start the company?
I used to head up BBC iPlayer. After I left the BBC I built a startup. Sold it. Built another startup. Sold it. Invested in a few startups. I got tired of paying law firms to do all the legals and decided it was time to change that. I met my business partner, Laurent Laffy, a genius VC and angel investor who does funding deals like a chess grand master plays chess. We worked to codify his deal knowledge and combine it with a brilliant user interface and document generation engine to create our platform that is now rapidly changing the way UK funding rounds are done.
What is the story of the company from launch until now? How big is the company now?
SeedLegals launched in May 2017. There are already over 1500 companies on the platform, and we’re doing two funding rounds per day, making us the largest closer of funding rounds in the UK, all in just 6 months since launch.
We’re now a team of 10 people based just behind the OXO Tower in Southbank, London.
What is the biggest challenge you’ve faced so far in your company?
Choosing what to focus on next! One of the great joys of having a product that users love is you quickly create a huge list of things to add to the product. Expand to the US! Support initial coin offerings (ICOs)! Add blockchain support! Launch in France! We speak to a lot of startups every day, and one of the biggest issues I see is founders not picking a goal, not staying focussed on that goal, and not getting diverted by adjacent opportunities. And ditto for me, it’s always tough to pick the best thing to focus on next – small incremental improvements, a giant new feature, a grand vision, or the next thing our customers are asking for.
What’s your biggest milestone/ which are you most proud of?
Every day I demo SeedLegals to founders looking to grow their business. I completely love those calls because I see how our platform suddenly turns a task where a founder doesn’t even know where to start, into a process that suddenly becomes clear, that they find inspiring and empowering. It’s an honour and a privilege to be in a position where you’re able to help people realise their dream and vision just that bit faster.
What is your business model? How have you monetised your product?
We have a range of packages starting at £700 for a Friends & Family Funding round, to £1500 for a Seed Round that includes everything you need to close your round.
Separately, there’s a £19/month plan that gives you everything you need to build your team, hire people, protect your intellectual property (IP), get investment ready, and manage your investors and shareholders.
What’s the next step for growth – is the intention to grow the business independently, or look for an exit via acquisition or similar?
Anyone who says they’re planning to exit via an acquisition is, in my view, saying that they’re unable or unwilling to build a great team, and a growing and profitable business. If your planned way out is a sale, then that’s a dangerous strategy that leads to short-term focus on hype rather than a long-term focus on growth. And so, of course our goal is to keep growing the business, we’d love to get to the point that the majority of all UK funding rounds are done on SeedLegals.
Will you be looking for more funding?
We’re thinking about a Series A round in Q2 2018.