A seed round is usually the first inflow of money into a startup company. With a seed round many companies obtain the financial means to go beyond proof of concept and onboard their first employees. This initial capital is great news because it means you are doing something right. But seed money comes with strings attached that should not be accepted outright. Keeping a cool mind and properly assessing the risk/benefit of the proposed terms under the guidance of a skilled attorney is of vital importance.

Importantly, seed rounds come in multiple flavors. They could be structured as convertible debt, convertible equity, seed round preferred stock, or even a sale of common stock. Although convertible debt has become pervasive at the seed stage, they are far from ideal for founders, especially if the round is capped. In addition to the structure of the round, the terms vary widely within a particular financial instrument, depending on whose law firm drafted the seed documents. What is common to all these financing documents though is that their terms are complex with profound commercial and securities law implications.

Startups often have a good amount of leverage in deciding how to structure their seed round. Needless to say, convertible debt is not always in the founders’ best interests.

Flat Fee Packages Helping You Make Decisions From a Place of Knowledge

Buchwald & Associates offers affordable flat fee packages at the seed stage. We represent companies receiving seed funding from VC firms, seed funds, and high net worth individuals. We advise startups choose the most advantageous financial instrument, answers due diligence requests and negotiate the terms of the deal.

We Simplify and Demystify the Seed Process

We know that the legal jargon used in series seed is hard to fathom and that it often feels like learning a new language. We are here to simplify and demystify the seed process so that you can make decisions from a place of knowledge. We hate to see founders get their ownership wiped out by deals they did not fully understand or jump on the convertible debt bandwagon simply because some non-lawyer suggested it.

Our flat fee packages are affordable and include one-on-one time to make sure you understand what your seed round options are, the pros and cons of each financing document, where there is room for negotiation and where there is not.

Call us at 212-729-8505 to speak with a startup lawyer today