
Launch HN: Axdraft (YC W19) - Legal documents for startups in minutes - yuriy_zaremba
Hi HN! We are Yuriy and Oleg, founders of Axdraft (<a href="https:&#x2F;&#x2F;business.axdraft.com&#x2F;en&#x2F;business" rel="nofollow">https:&#x2F;&#x2F;business.axdraft.com&#x2F;en&#x2F;business</a>). Axdraft offers free legal documents for startups.<p>We have built Axdraft, because we believe that sometimes founders don’t need 20-page ironclad contract, 2 weeks of negotiations and detailed explanation of all risks. On early stages you just want to have a good, balanced agreement fast to move the deal forward while it&#x27;s hot. The biggest difficulty here is that lawyers push us to perceive contracts as unique and, therefore, not possible to automate. Usually, by saying unique, they mean that there are 20-50 possible variations of a clause in the contract.<p>We are a team of brothers, who combine legal and tech expertise, Yuriy was a lawyer for almost 8 years at one of top law firms in Europe and when he started noticing that even the most complex legal transactions have many patterns, he reached out to his brother Oleg, who at that time was Senior Software Engineer at Booking.com in Amsterdam.<p>We teamed up to try to figure out and automate most common variations and allow any young startup, as ourselves to draft a document, which they need now. We spoke to about 100 founders and came up with a list of top-6 contracts startups use, including: (1) NDA; (2) Pilot agreement; (3) Services agreement; (4) SaaS agreement; (5) SAFE; and (6) Employee onboarding. We are already working on Terms of Service, Privacy Policy, Founders Agreement and LoI, which are top-4 documents requested by users. We will be more than happy to add other documents upon your request.<p>Our main differences compared to Clerky, LegalZoom, RocketLawyer and similar solutions are:<p>1.     we focus on startups, which makes the content more tailored;
2.     we offer documents for free, because I see little value in the legal document itself. The main value of a lawyer, in our view, is in counseling, sharing the liability and providing you assurances;
3.     we offer plain English description of the implications for each choice you are offered when drafting a document;
4.     to use Axdraft you don’t have to register, because we want to create flawless and super-fast experience for founders to create legal documents;
5.     we are happy to customize documents of registered users with their logos, company details and some custom language upon request.<p>We intend to monetize Axdraft by giving an option for startups to submit any document drafted with Axdraft or a document they received from third party for approval or review by a lawyer for a small fixed fee, which would still be much more affordable than engaging a law firm.<p>Currently, we offer founder to founder review, which is not a legal review at all, but more a business advice from a fellow founder, who is eager to share his experience with similar contracts.<p>We estimate the market for this product to be less than 1 bln USD at the moment, but we expect it to grow as the number of startups founded each year increases and as we expand into a larger 7 bln USD market of small businesses (under 20 employees) in the US.<p>We are really excited to hear your feedback about Axdraft. Please try it out at <a href="https:&#x2F;&#x2F;business.axdraft.com" rel="nofollow">https:&#x2F;&#x2F;business.axdraft.com</a> (registration is not required) and let us know what you think.
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jedberg
Just tried it out to make a Privacy Policy. Pretty neat! Only took a couple
minutes to answer the questions.

One point of feedback: What you gave me was a Word Doc. I know Word Docs are
the bread and butter of the legal profession, but I want to use this privacy
policy on a website. That means I'll have to convert it to HTML, which means
either getting really ugly HTML after I ask word to save it out, or having to
copy/paste it and then reformat it.

It would be great if you could output a more convertible format, like LaTeX or
Markdown.

~~~
vortico
Or just an HTML page with no styling, which can be copied/pasted into Word to
preserve formatting, or saved directly.

~~~
anonymous5133
Just have multiple "save as" options.

~~~
yuriy_zaremba
Got it. Thanks!

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philipkiely
Hi guys,

This is an interesting product! I generated a sample document to see what it
looked like and I was impressed by both the simplicity of the document
generation process and the quality of the output. I also think it is great
that there is no signup, email, or any other gatekeeper preventing me from
using the service.

I frequently find myself involved in early stage projects where these sort of
legal documents would be very handy. I would love to see the document types
that you're already working on, as well as perhaps a freelance / work for hire
Letter of Agreement, as many startups begin by putting food on the table
consulting.

A few things about the service:

1\. What license, if any, are these documents generated under? I know sites
like contractology let you use the docs for free but require attribution, or
they can be used without attribution for a small fee.

2\. Other than official legal review, do you plan to monetize any aspect of
the service, such as the customization offered in the fifth point in the "main
differences" section? Why or why not?

3\. Where are your market size estimates coming from? Is the market that you
are measuring the total amount that startups spend per year on legal expenses,
or is it something else?

4\. I was confused by some of the wording during the signup process "No I
Makes sense, if pilot is very simple," for example, was an option.

Regarding the fourth point, I have some experience working with European
companies to improve the fluency of their website's English business and
technical writing. My email is in my profile if you are interested in learning
more.

~~~
yuriy_zaremba
Thank you for such a detailed feedback. This is extremely valuable and we will
definitely reach out to you separately!

On each of your questions:

1\. We don’t impose any license terms. It’s free to use and share for
everyone. The reason being that we want people to share the news and get the
benefit of AXDRAFT instead of thinking twice not to violate some kind of
restrictions.

2\. We don’t intend to monetize on personalization for now, but eventually we
want to become a first point of contact for all startup legal work and this
will become our source of revenue. We choose not to charge for
personalization, because we want users to clearly feel the value between
finding a free template on Google or using other services.

3\. Market size comes from the number of startups and small businesses and the
assumption that we will get around 100USD of fees per startup per month.

4\. We will fix it and will hope for your help for this.

~~~
rolleiflex
Yuriy, this looks useful and I’ll take a look at these for my own startup, but
one point of clarification that you guys might want to double check with a
lawyer: not having a license does not mean that anyone can use it, it means
that _no one_ can use it. Licenses aren’t restrictions, they are grants.
Without a grant, no one is allowed to do anything with them by default.

You very likely need a license so your customers aren’t (technically) in
violation. CC0 license is a straightforward one for these kind of situations,
might be worth checking out.

Per usual: not a lawyer, certainly not your lawyer, please double check with
an attorney.

~~~
yuriy_zaremba
We will check this and clarify this from the legal perspective. Our attitude
is, as I described: everyone can use it. We focus now on getting the best
documents, we will definitely have no claims and we will clarify this from the
legal point of view.

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wrs
The difficulty with this sort of thing, in my experience, is that once you do
need to hire a lawyer to review this sort of agreement, it turns out to be a
lot more expensive in the long run than just hiring them and using their forms
to begin with. They know their own language backward and forward so it takes
them very little time to make a standard change to their standard form.
Looking at an entirely new (to them) agreement, they have to analyze it from
scratch.

If there were truly industry-standard forms that all attorneys were familiar
with for these standard agreements, that difficulty wouldn't arise. That's how
the residential real estate market in the US works, for example — standard
forms for all sorts of situations approved by the real estate associations.
It's sort of like how an open source infrastructure product will eventually
become the cheapest thing to use because everyone already knows how it works.

Do you have a goal/roadmap for making your agreements the industry standard?

~~~
yuriy_zaremba
Thank you for this feedback. We are aware of this problem. We have faced it
few times. This is why we will allow our users to connect with our network of
lawyers, who are very well familiar with our language. Moreover they will be
able to easily compare the document they receive from users with AXDRAFT
template, so we expect the fee to be significantly less, compared to what you
would usually expect from a lawyer.

------
treis
I'm going through the MSA one now:

>Customer I In this case customer will be Company, and you are the one
providing services (Contractor). Choose wisely

I think there are some typos here and I'm not sure why I need to choose this
option wisely.

Going through the questions, it looks like you are using "I" as a separator
which is confusing.

>Do you want to include interest on late payments?

I think a discount for on time payments is better than charging interest.
Interest makes it seem like the customer can delay payment if they feel like
it.

>Should Contractor be able to remedy deficiencies in Services, if Company
(you) does not accept them?

In question 1 the customer was the company and I was the contractor, but now
they're swapped.

It sneaks in some terms I wouldn't agree to:

>all Work Product and other materials provided by or on behalf of Contractor
will not contain any viruses, “Trojan horses” or other harmful code;

>Contractor would cause Company irreparable harm for which Company has no
adequate remedies at law. Accordingly, Company is entitled to specific
performance or injunctive relief for any such breach.

>require Contractor to pay the adjustment of $ Type in amount of reduction in
fee, in case Contractor fails to comply with quality requirements for Services
in USD I example: 500.

>keep copies of all books and records relating to Services during the term of
this agreement and for three years thereafter. Company may upon reasonable
notice and during normal business hours examine and make copies of all books
and records relating to Services

When looking at the preview document I expected that at minimum I would be
able to click on the green text and edit it. Ideally, I should be able to edit
the whole document.

Sorry to say that I don't think I would use the service. It's a bit sloppy in
places which isn't reassuring when generating legal documents. I don't think
what it spat out was something that I would want to use. It seemed to be
tilted in favor of the client where I'd rather send something in my
favor/neutral and have them redline it if need be.

~~~
yuriy_zaremba
Thank you for this feedback. This is really valuable. I believe the confusion
started on the first question. After you choose it, you become a contractor in
the agreement, not a customer, so many provisions are against you. We will
probably delete this option to avoid confusion. We will also improve wordings
and use of symbols to improve trustworthiness.

Regarding the editing, you should have received a final Word document with
100% ability to edit it. Preview is just to get a general sense of the
document.

Regarding the discount on payments, thank you for the suggestion. We will add
this option and we have specifically created a "suggestion" button on the
website.

Thank you again for your feedback. It is very valuable! We will fix everything
and let you know (if you want to).

~~~
treis
>Thank you for this feedback. This is really valuable. I believe the confusion
started on the first question. After you choose it, you become a contractor in
the agreement, not a customer, so many provisions are against you. We will
probably delete this option to avoid confusion. We will also improve wordings
and use of symbols to improve trustworthiness.

This has left me even more confused. If I'm the contractor why would I want an
agreement with many provisions against me? In that scenario I would want a
contract neutral to in my favor. Something that will get me past my client's
legal team while protecting me as much as possible.

>Regarding the editing, you should have received a final Word document with
100% ability to edit it. Preview is just to get a general sense of the
document.

Ah, I stopped at the preview point.

~~~
yuriy_zaremba
Thanks again for the feedback. We will split this document into two separate
agreements.

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swampthing
Congrats on launching! On this:

> Our main differences compared to Clerky, LegalZoom, RocketLawyer and similar
> solutions are: 1. we focus on startups, which makes the content more
> tailored

We (Clerky) are exclusively focused on startups. We started Clerky
specifically because there was no online service that was suitable for
startups. Not sure if you meant for that first point to only apply to
LegalZoom or RocketLawyer, but I wanted to clarify that.

Good luck with everything!

~~~
ganeshkrishnan
I don't think this is the right forum/thread to point it out but Clerky
defaults to 10,000,000 shares while incorporating and this was a big mistake
for us (and for most startups) down the lane as Delaware has higher taxes if
the company has more than 5,000 shares (regardless of the share value).

We lost nearly a month's revenue paying off taxes and filing legal amendments.

Also you guys handed over my account to CSC as agent and we weren't even aware
of it.

~~~
swampthing
It sounds like you might have gotten some bad advice from elsewhere – most new
startups with 10 million authorized shares pay a DE franchise tax that is very
close to the minimum (around $400). There are two different ways to calculate
franchise tax for DE - the "authorized shares" method and the "assumed par
value" method. The letter DE sends out uses the former to estimate your
franchise tax, which is usually some huge amount. But when you go to pay your
franchise tax, you can just use the "assumed par value" method and pay what is
typically a very small amount. I'll shoot you an email on this as well!

~~~
ganeshkrishnan
The minimum can be $150 if your shares are less than 5000. If the difference
between $400 and $150 is inconsequential then yes it doesn't matter.

The advice was from Delaware government customer service.

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rococode
Small design feedback: the I character you use to divide text in-line looks
strange to me. I've actually never seen I used like that before. Perhaps you
want to consider using | instead of I? Here's an example of the difference:
[https://i.imgur.com/NRiERLN.png](https://i.imgur.com/NRiERLN.png) (top is |,
bottom is what you have now).

This seems like a useful service, although I'm curious what the business model
is here. Is it entirely based on the "Request review by lawyers" button at the
end? Do you think that the market of people who are willing to pay for lawyers
but not pay for lawyers to draft documents is large enough? (or perhaps I'm
misunderstanding the angle here)

~~~
xofer
I also was very confused by the pipe, which renders exactly like an uppercase
I for me. [EDIT: oh wait.. it is an I? either way...] Replacing with a hyphen
or colon would be a quick fix. Additionally consider bolding the main text
and/or greying the subtext.

On a positive note, I really like the way prior answers appear below the
current question on the survey!

------
pl0x
This is a much needed alternative to the others. Are there any plans to bring
this to the EU?

~~~
yuriy_zaremba
Thank you for the question. Yes, we plan to go to EU later (London and Berlin
being a priority due to high number of startups), but for now we start with
Silicon Valley, since the majority of startups are here.

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agordhandas
Hey guys, this is awesome! To help with SaaS sales agreement for my own
company, I started builiding a tool just like yours this past weekend. I am
glad I did not invest a lot of time into it :-)

~~~
yuriy_zaremba
Thank you! Happy to hear that! We will be happy to personalize your documents,
if you want to. Just email me at yz@axdraft.com or reach out via feedback
button in the software.

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jstanley
This is a great idea. I just tried it out and had a couple of issues.

I wanted to see what a privacy policy would look like. I don't collect any
user information but I was required to select at least one type of data that I
collect.

Similarly, I accept payments but not via any of the listed payment processors,
but I was required to select at least one of the payment processors.

I think both of these could be solved if you removed the requirement to select
at least one option.

~~~
yuriy_zaremba
Fixed the problem with payment processors already. With the data it's a bit
tricky, since almost every website collect some kind of data, so you probably
don't need a Privacy Policy if you don't collect any data. Please let me know
what you think about that.

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rsweeney21
I was just thinking about how I could get an MSA done without spending
thousands of dollars. I would be happy to pay for this. You should charge me
something!

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baristaGeek
Guys congrats, will absolutely use this. As you grow, it would be great if you
could also handle the more complicated aspects of priced-equity rounds. In the
meanwhile, I think a lot of people would benefit from the advisory agreement
and the vesting agreement for employees.

~~~
yuriy_zaremba
Thank you for the feedback. Advisory and vesting agreements are already on our
road map. We hope to launch them after Demo Day.

------
citeright
An interesting idea. In my experience it’s investors, not founders, who are
often the source of complexity in startup agreements. I’ve found that angel
investors or investors without a huge amount of experience with common
practice in the YC/SV world struggle with concepts like SAFEs and convertible
notes — even if they’re otherwise sophisticated investors. And those types of
investors are often the only ones ready to bet money on very early stage
startups.

All that’s to say: don’t neglect the educational aspect of what you’re
selling. Make it easy for founders to explain how your documents works, and
make it easy for investors to trust the documents you’ve prepared.

~~~
yuriy_zaremba
This is a great feedback! I have never considered this aspect before. I think
it makes sense to start some kind of blog on the website to explain legal
matters in plain words, which startups can share with investors.

Another point to this is that we focus mainly on contracts, which startups use
in their operational activity. I think this part is underserved most severely.

We have SAFE, because it is commonly requested by founders, but I think that
Clerky does better job on corporate for now, since they have Board
Consent+SAFE+signing+storage.

~~~
valkorhe
I would be significantly interested in something to help explain legal terms
as someone with little experience with business, finance, or law. I'm
interested to see how this turns out!

~~~
yuriy_zaremba
Thanks! We will work on that and will keep you posted.

------
aboutruby
This is quite great! I used other free services for quick privacy policies
before and they were quite bad.

I would love to see a Terms and Conditions template alongside the Privacy
Policy one.

~~~
yuriy_zaremba
Working on it. Hope to release it later this week.

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jcroll
Is this just for U.S.?

~~~
yuriy_zaremba
The documents are governed by US law, so they are useful, if you have a US
company or some clients in the US. At the same time, documents, like Privacy
Policy are pretty international, so if you are building a SaaS business or an
app, you can definitely rely on them.

------
golanggeek
Awesome! How would it work for SaaS companies from other countries. For E.g.
we are from India. So would these still be valid documents?

~~~
yuriy_zaremba
Thank you for your comment! It would work if you have a US company or are
selling to US customers, but, unfortunately, we don’t have documents for India
yet. We may expand into this market later, but for now we are focusing on US.
You can also benefit from the Terms of Use and Privacy Policy we will launch
soon, since they are pretty international.

~~~
golanggeek
We don’t have a US company. But yes, we are selling to US customers.

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sachin18590
I was looking for a similar service few months ago. The startup world needs
this. Will be using you guys soon

~~~
yuriy_zaremba
Thank you!

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sergiotapia
Bookmarking for future use, definitely a much needed service for many
startups.

~~~
olegza
Thank you! We appreciate it.

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ssalazars
Will there be documents in Spanish or other languages soon?

~~~
yuriy_zaremba
We are planning this, but for now we focus in English.

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anonymous5133
Works good and well polished site. Bookmarked.

~~~
yuriy_zaremba
Thank you! We appreciate it.

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UltimateFloofy
i thought yc funded something like this back in 2011/12 called clerky.

~~~
yuriy_zaremba
It is true. Clerky operates in the same space, but currently they use
different model (pay per document, essentially). We take a different approach
and offer legal documents for free, but want to use this to become the first
point of contact for startup legal work. We will monetize by offering tailor-
made automation of contract workflow and follow-up legal advice on operational
legal matters (like a virtual general counsel for startups).

------
oferzelig
Guys, I love this!

~~~
yuriy_zaremba
Thank you so much! Feel free to reach out to me anytime at yz@axdraft.com if
there is something you want us to improve.

