Closing a deal can be extremely expensive. And how do you know if the terms you are looking at are actually on par with what everyone else is using? It doesn’t help that recently we were contacted by entrepreneurs who had been given some pretty unfavorable term sheets. Thankfully they were not from investors part of the VC4Africa network, but nonetheless.
We were pleased to discover a social repository of contracts, agreements and other legal documents. Because really, why aren’t these freely available to the public, easy to find and customizable? There are many services out there, but often times you don’t know what you are getting and you run the risk you end up with shady templates only after you pay the fees. Meet Docracy, a team that wants to take the mystery and fear out of legal agreements. They offer a pretty useful service and a powerful point of reference.
Docracy was started at a TechCrunch hackathon as a reaction to the problems the team had finding reasonable documents when running their previous business. After finding out that lots of other people had the same problem, they began working on it full time with the backing of First Round Capital, Vaizra Seed Fund, Quotidian Ventures and Rick Webb.
Here is an interview with the founders:
We hope this resource can be useful to the members of VC4Africa. Just remember, these are only tools for reference and you need to do your own homework before signing anything. And many of these templates don’t take into consideration some of the unique challenges entrepreneurs and investors face building businesses in different African countries. As you make adaptions and find ways to improve some of these templates, please share them with the rest of the community!