SeriesSeed.fi is perhaps one of the greatest startup related initiatives Finland has seen in a while. The site, put together by passionate individuals, gives away free of charge basic, standardized legal documents for startups. The documents cover the share holders agreement, term sheet and an investment agreement. Finland is a pioneer on this front as similar documents have been made available for the public only in a few startup hubs, such as Y-Combinator and TechStars. One of the key influencers of the SeriesSeed.fi documents are the SeriesSeed.com documents from the US.
ArcticStartup is proud to support these documents, but the real work has been put together by Kallio Law's Jukka Kallio, Lifeline Venture's Petteri Koponen and Antti Kokkinen of BlueRun Ventures. The Helsinki based Aalto Entrepreneurship Society has also been pulling strings to get these documents in place.
Legal documents such as these are among the most important any founder has to sign (in an investment event of course). They lay the foundation for the co-operation between the startup and the investor.
Y-Combinator and TechStars, perhaps the leading centers for fast paced growth company development, have realised the importance of distributing this knowledge early on and have come up with their own early stage legal documents. The advantages are clear as Petteri Koponen from Lifeline Ventures puts it, "spending a lot of time and money on finalising pretty simple seed rounds is just silly." And we agree. According to Petteri Koponen, they saw one company spend approximately 30 000 euros in seed round legal documents. This money is naturally away from the development of the company itself.
These, seriesseed.fi documents have been designed especially for the investment rounds where a foreign investor would want to join. These are usually among the most expensive, according to Petteri Koponen.
Jukka Kallio, from Kallio Law believes "founders need these documents to give them knowledge and understanding on how seed rounds work. As they might not have earlier experiences from other startups, it might be hard to know what is usual or what matters are to be dealt with in the documents."
Jukka Kallio also states that one of the functions of these documents are to educate entrepreneurs on what terms and issues are agreed on in seed round investments, especially with foreign investors. He continues, "in many cases founders don't have a clue on the so called 'normal' terms and with these documents, they should be able to think more thoroughly of their own and other co-founders' objectives and commitments."
There's also a secondary function for these documents - it enables companies with existing investments to benchmark their agreements to the standardized ones and see what kind of an agreement they have signed themselves into.
The documents are available fully free of charge and are licensed under the Creative Commons attribution license, which means that all documents built on top of these must acknowledge the source - seriesseed.fi. Entrepreneurs are also able to either download the documents from the site itself, or view them in Google Docs or perhaps best of all for the technical ones - fork them on GitHub.
I'm sure ArcticStartup isn't the only one happy to see such documents out there for startups to use and leverage. Now go about it - create that startup, get it funded and agree on the terms with these documents!
ps. You might want to read about series seed investments from the following sources:
Fred Wilson of Union Square Ventures: The Ideal First Round Term Sheet
Chris Dixon: The Ideal First Round Funding Terms