Seedlegals is a LawTech Solution for Funding Rounds #2
This week on Startups of London, we visited a LawTech company: Seedlegals. We got the chance to meet and talk with Anthony Rose, the CEO and the founder; to talk about the company values, the challenges they have confronted and overcame, tech tools they use, the company culture and much more. It was a delightful and informative interview which we are very excited to share with you.
The Idea Generation Process
After building a startup, and selling it, then building another one and selling that too, Anthony says he experienced the difficulty and complication with the legal dimension of the whole process firsthand. This lead him to think about creating a better, faster and more reliable solution for startups in their funding rounds. That’s how Seedlegals came to life; a one-stop platform for all the legal help startups need during their investment processes.
Watch the inspiring interview & office visit below.
Watch the documentary
Listen to the podcast (uncut interview)
Value to the customer
If you are a startup founder; you know you have to build the product, hire team members, build a culture and be “lean” in the process. But there is also a dark pit of legal stuff to do such as IP assignments, NDAs, details with investing and funding rounds, SEIS & EIS tax deductions and so on… You could search and search to find the best answers to all these questions… or you can go to Seedlegals, says Anthony.
What fascinating is that, although all startup ideas are different, the structure (and the problems with) all funding rounds are remarkably similar. Most companies spend tons of money on legal fees to find a solution. SeedLegals’ goal is to show you market data, access to key knowledge, tutorials and articles, and a Legal Tech platform. Aside from solving the problem, they also aim to educate both parties to get the best deal for both sides.
Smooth funding process
Legal processes to find funding are time-consuming and difficult most of the time. When companies go to law firms, it takes 3 months to find investors, and then another 3 months to close the deal. Then, you have to get traction to raise money for your next round which means you have to wait for 6 more months to get to the point. The total process would take around 12-18 months.
In the meantime, you are raising money at today’s evaluation to last you till tomorrow’s evaluation. You are giving away too much equity and you are spending months for the campaign trail. Wouldn’t it be great to raise continuously with SeedLegals: Agile Money!
There are always a number of key problems in each business but people often start by solving the easy ones instead of trying to solve the hard ones. People generally perceive that the difficulties will be with building the product but the difficult part is having people to buy it.
It was a little unusual to bring the MVP out for SeedLegals. Because they knew the problem very well, they did not go through any iterations or pivots to find the best product-market fit for them.
The way they launched was they did all the frantic paddling behind the scenes. The website was launched and people started logging in, creating their documents and entering their data. The Chief Legal Officer and the business partner worked to understand the key things people are looking for in a round and then tried to automate the solutions to these use cases by using the pattern of their data. It wasn’t only the startups that liked the platform, which they thought would be the case, but also they quickly figured out that investors loved it as well.
Working in London
Besides the amazing view and wonderful people in London, there are also great benefits for startups. There are fabulous sets of government tax incentives for entrepreneurial relief. So the founders only pay 10% capital gains tax. They provide SEIS and EIS deductions for the investors, and R&D relief – so you can get the money you spent on your business development. In the UK legal system, you can incorporate a business within half an hour for 12 pounds. All these together make it very easy to build a business.
Funding to move forward
Funding rounds start with the idea of one, two or sometimes three founders. Yet, no one invests in an idea because ideas are cheap, and what is expensive is the implementation. Data indicates that the first investment comes from the founders themselves until they build the prototype or the MVP to get investors’ attention.
Most companies on a steep growth curve raise money at least 3 times; the goal being not the five away more than 15% of the company. In each round raising 3-5 times seems to be the golden ratio. By the 3rd round, either the company will not need a raise again, or it is the perfect time to be acquired and have a great exit. The reason for the magic 15% is because even if you do that 3 times, the founders will still have more than 50% equity.
Everything you do is not to just make the consumer love you but also to get to the next step. Because if you don’t think about the next step, there is no future. Your business might have started off with the support of friends and family, and then angel investors, and later funding. But now, your goal is to raise enough money to make your next milestone. This is one of the areas Seedlegals is working on a solution for.
Key decision: Do you want to grow your company organically?
There are two paths to growth: Either you can generate revenue and bootstrap your way to the top, or focus on investments and grow more aggressively. Both are risky in their own ways, but the collapse is more spectacular with the second one.
The most challenging but also the wonderful thing about being a founder is nobody is going to hand you over the answer and you need to work it out yourself. At times like these, it is great to have a co-founder who sees the opposite sides of most cases so you can bounce ideas and hopefully increase your quality of decisions.
The team players at SeedLegals are aspirational entrepreneurs themselves. People who can take initiative and solve problems. The ability to independently identify and solve problems is an important signal for great employees for Seedlegals. They are now a team of 35 and looking to grow further soon.
In addition to the entrepreneurial approach, Seedlegals looks for a great fit in terms of know-how and suitability to the role.
Roles at SeedLegals fall into three groups within the business;
- Software developers – You are not just another startup, you are also building the factory to power all the startups.
- Legal team – You studied law and have great knowledge but don’t want to work for a law firm.
- Sales and marketing team – In addition to key role in growth the role also encompasses talking to accelerators, investor, and startups to support SeedLegals growth.
Tech tools they depend on
Building a business nowadays is about bringing the right components together. Even though people are probably the biggest dimension of it, another huge part is understanding which tools work for your business. Though not discussed much the key component to the growth of a tech business is other tech tools they use, such as SaaS products.
SeedLegals is using Email and slack for communication, hubspot
for CRM purposes, but the most important tool that changed the game for them and improved their business is Intercom. People are not just searching around the website by themselves anymore, now it is a conversation.
They are using this amazing real-time chatting tool to get in touch with the
customer and understand their problems in under 1 min 48 seconds!
Everyone in the company interacts with the customer. It is the team that is the biggest part of the product and the team listens to the customers and builds together. This leads the entire company to be customer driven, listening to customers constantly. It turns the drive-by customer visiting your site into leads in a conversation.
SeedLegals’ goal is to help companies transform the way they grow by taking care of the whole legals side of things.
- Phase 1: Help the startups do their rounding sooner, faster, better.
- Phase 2: As the companies grow on Seedlegals, grow with them.
- Phase 3: Grow to other territories.
- Phase 4: Evolve the platform for both startups and investors to close the deals through the platform.