When we raised our Series B in 2015 our legal bill was $25K. At the time I was appalled at how much it cost to close my round. And the worst part was when I looked at the bill, almost all of the costs were for administrative work: building the pro forma cap table, updating the financing math, sending documents to investors, getting signatures, confirming wires, and preparing the closing volume. Only about $5K was true legal work like negotiating the terms, drafting language (which is all templated anyway), and advising me.
Since then legal costs have skyrocketed. Today, Seed Rounds, which are the easiest to negotiate and close, cost between $50K — $75K for company counsel. It is crazy to think that a company raises their first $2M Seed Round and 2–4% goes out the door immediately just to close it.
That money is better used building the company.
Introducing Carta Deal Concierge
The good news is that 80% of the cost of closing a Seed Round is administrative. So today we are launching our new service called Carta Deal Concierge to reduce the cost of closing Seed and Series A rounds. For a fixed fee ($15K for Seed rounds, $25K for Series A rounds) we will take care of all the administrative parts of closing your round. Pay your lawyer for the strategic legal work your lawyer does for you. And then use Carta for everything else.
Carta Deal Concierge will:
- Compare your termsheet to industry standards
- Build your proforma
- Draft initial documents
- Help your lawyer negotiate deal terms
- Create and track signature packs
- Coordinate and confirm wires on closing day
- Issue the post-close securities
- Create and distribute all finalized docs to your investors
And last, answer your questions! For many early stage founders this is the first time they’ve closed a round. But we see it every day. We are happy to walk you through the process.
See where I talk about this with other founders at 44:31 here.
If you want help on closing your round, email us at email@example.com or talk to your friendly Carta account manager. We will work with you and your lawyer to take the low value administrative burden off your law firm’s shoulders and let you and your lawyer just focus on the high value billable legal work. We should be able to save you $30K-$50K in unnecessary billable hours for a fixed fee of $15K.