1) The document provides 7 legal hacks for startups to cut legal fees in half, including using vesting to incentivize founders to stay, using equity instead of cash, understanding important terms in a term sheet like valuation and veto rights, ensuring proper intellectual property ownership, making the startup investable, choosing the right startup lawyer with a fixed price, and embracing potential conflicts. 2) Vesting structures shares so they are earned over time, creating an incentive for founders to stay, while also establishing a fair price if a founder leaves early. 3) A term sheet outlines key investment terms like valuation, veto rights, board seats, and whether to use a SAFE or convertible note.

1. #7 legal hacks for start-
ups
Kristian Holte, start-up lawyer

3. mission
cut start-up legal fees
in half

7. hack #1
vesting

8. 3 co-founders own ⅓ each

9. 1 co-founder decides to leave

10. what happens?

11. without vesting
you silently cry inside

12. with vesting
you continue building

13. with vesting
shares must be sold back

14. vesting creates an incentive
to stay and work

15. vesting is good for everybody
… almost

16. how does vesting work?

17. #1
each founder owns 100%
up front

18. #2
shares are “earned” over
time, say 5 years

19. #3
if founder leaves early,
shares must be sold back

20. #4
price depends on how
founder leaves

21. founder decides to leave
=
lower price

22. founder is forced to leave
=
higher price

23. #5
vesting is placed in
founders’ agreement

24. hack #2
use equity

25. start-ups don’t have cash

26. start-ups have equity

27. use equity instead of cash

28. how to use equity?

29. #1
options & warrants

30. #2
time or performance

31. #3
exit or control

32. #4
leaver scenarios

33. #5
tax

34. hack #3
know your term sheet

35. what is a term sheet?

36. most important terms
for an investment

37. top 5 terms for start-ups

38. #1: valuation

39. the price investor pays

40. pre-money vs. post-money

41. how to set the valuation?

42. #2: veto rights

43. investor’s right
to block decisions

44. investor’s right
to block decisions

45. #3: board seats

46. some investors want to
control the board

47. #4: anti-dilution

48. dilution of value
vs.
dilution of ownership %

49. #5: use the edison SAFE
or
a convertible note

50. old way
=
slow, expensive, painful

51. new way
=
better, cheaper, faster

52. hack #4
think about ip

53. intellectual property rights
=
product rights

54. software, design, hardware

55. does your start-up own its
own ip?

56. consultants vs. employees

57. ip before you incorporate

58. patents, trademark &
copyright

59. hack #5
be investable

60. #1: minimize “dead” equity

61. #2: don’t give vc terms to
angels

62. #3: start an aps not an ivs

63. #4: have contracts with
everybody

64. #5: everything in english

65. #6: avoid funding brokers

66. hack #6
choose the right lawyer

67. the 5 commandments

68. #1: fixed price

69. #2: no juniors

70. #3: start-up lawyer

71. #4: get your own lawyer

72. #5: talk to 3 lawyers & get 3
quotes

73. hack #7
embrace conflict

74. “war is the father of all”
Heraclitus

75. relationsips hurt, also in
business

76. decide & execute quickly

77. fully accept the
consequences

78. What would you do if you
knew you couldn’t fail?

79. Kristian Holte, start-up lawyer