VC Deal Lawyer

Wow!  How much press can this thing get in the venture community?  Lots – and I think that was the whole point.

Of course, I am talking about WSGR’s term sheet generator which was launched publicly a few weeks ago.  If you read WSGR’s web site, you get the impression that this tool is only part of a larger quiver of tools used internally on deals.  Most impressive.

Given that I am a lawyer practicing in the venture community, you might ask why in the world my first post would spotlight another law firm’s services in the same field.  First, I think that lawyers can always be more entreprenurial.  WSGR deserves credit for their creativity with this term sheet generator and I believe it takes being an entreprenurial law firm to a whole new level.  Second, I believe in recognizing a job well done – competitor or not.  For those of you who haven’t tested it out, you need to.  I spent about an hour running it through its paces and I was left very impressed.  Putting aside its great functionality, the generator also has tremendous depth in the variety of deal terms it can add to a term sheet (the generator accounted for almost every term sheet curve ball I could throw at it).  

Now, does the generator replace “smarts” or a level of understanding of these types of deal terms that can only be learned through experience?  My answer is no.  On the other hand, does it provide an additional tool to help VCs and angels round out their term sheets – absolutely. 

Some VCs have asked me – why in the world would WSGR put this on the Internet for free?  In my opinion, solid, well-vetted term sheets have become so prevalent and accessible to the masses that the value provided by lawyers at the term sheet stage isn’t so much novel drafting (although this is certainly required in some deals to the extent the deal has a unique structure or terms), but in making sure that the provisions in the term sheet actually jive with the deal that the parties think they’ve agreed to.  The other legal value-add at the term sheet stage is making sure that the term sheet doesn’t omit a necessary provision. 

Either way, as lawyers, you try not to re-invent the wheel at the term sheet stage.  As WSGR’s free term sheet generator indicates, the real value-add by lawyers in a venture deal is their ability, crafted through experience, to document, negotiate and actually close the deal.