Bootstrapper.com - Confessions of Serial Entrepreneurs

One of the most important things for an entrepreneur to consider and probably the last thing on the list of what an entrepreneur actually considers is lawyers. Why? Entrepreneurs (my old self included) always think they can write their own contracts and that they are legal beagles. Now let me ask you a question my fellow entrepreneur. Say you had a beagle, they are very cute doggies btw, would you lick your dog clean so he doesn’t have to? Now, if you said, yes, PLEASE DON’T tell me you do, but if you are normal, the answer is no.

So why would you want to do your own legal work? It’s not your specialty. NOw finding a great lawyer is tough and they are expensive. That’s why you should try to become friends with a great lawyer and get him or her to believe in your ideas and then give you discounted legal services for equity.

Now you’re probably saying “give my lawyer equity!!!!” you’re an idiot. Well, while I may very well be an idiot, there are very specific reasons why you’d want to give your lawyer equity.

1) You are a tiny client of his, this is a motivator to get him to do extra specially hard work for you. None of his big clients offers him equity.

2) Now he’s a shareholder and actually cares.

3) The most important thing you’ll ever do if you are looking for an exit is paperwork. Whether it’s a term sheet or a sale agreement or filing for an IPO. There are a million ways in these agreements for an entrepreneur to get fucked. You want a lawyer that will rip the other side in half with a smile. An entrepreneur negotiating hard may piss off an investor and get an investor to think “he’s being a greedy bastard” and walk away. A lawyer negotiating hard is expected and the investor or buyer may come to you, to try to “settle this thing” and get it over with. Then the investor or buyer is playing into your hands. You just turned a weakness (having to negotiate) into a strength (getting them to come to you to negotiate with you). All because you had a shark of a lawyer. Also, if you 10 entrepreneur, I guarantee you’ll find at least 5 who hated their VC’s and feel like they’ve gotten fucked. Ask those people if they feel they had good lawyers. Case Closed.

PS. How do you find a good lawyer? Networking, or ask me!

I am often asked to sign NDA’s by entrepreneurs that are asking me to help. They don’t want to share their idea without
“protection”.

Of course I say NO. I see as many plans as VC’s and if you find a sophisticated VC offering to sign an NDA - the odds are he aint that sophisticated. 99.9% of investors won’t sign them because they cause harm if you do well and are generally useless.

I will go a step further and day entrepreneur NDA’s are worthless for the entrepreneur. I have a simple rule. If you give your idea to your neighbor and you aren’t confident enough that you can execute your own idea better than him - then you shouldn’t be building that idea. Wait until you find an idea you can do better than anyone else. If you are the right person to run the ship - the NDA is useless because you can tell a million people the idea, 100,000 can try to copy it but you will succeed because you’re the man.

In fact I often tell me my greatest ideas, if they still it, that’s nice. I don’t care. If i get serious about that idea and want to build it myself - i aint building it until im dam fucking sure that me and my team can do it better than anyone else. Otherwise, why bother doing it in the first place?