
Ask HN: The cost of incorporating and drafting safe notes, $15k? - somid3
Hello,<p>We have an early startup and we need to incorporate as a C-corp and draft safe notes to raise a sum of $1M in funding. We came across a law firm that is willing to defer payments but they say all of that will cost some $15k.<p>Does anyone know how much it costs to create an investors-ready C-Corp and draft a safe note?
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davismwfl
Assuming a delaware corp and foreign registration in your home state, just say
roughly $1,000-$1,500 if going through an attorney for that part. Stripe has
Atlas which I think does most of that for $500, but I don't think includes
some of the state fees, so probably a little more.

The SAFE note, should be able to be taken to an attorney and have needed
details filled in and revised based on your specific situation. I would expect
that to be less than $2k in general. That would be roughly 6-10 hrs of
attorney/paralegal time generally which seems adequate to make modifications.

$15k seems high to me for just incorporating and modifying the SAFE note.
However, $15k in legal fees to raise $1M doesn't seem totally out of line.
e.g. closing documents, due diligence support etc.

Make sure you know what it is covering and not covering, because that makes a
huge difference in whether it is reasonable or not. Also your location makes a
huge impact on this as well as the law firms reputation and history of doing
this stuff.

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somid3
This is great feedback, thank you!

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jasonshen
That seems on the high side. Incorporating on Clerky is under $2k and I would
expect SAFE notes to be pretty easy to draft compared to even say a
Convertible Note which I would still imagine to be under $10k. Try to
negotiate.

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rajacombinator
Lol! You can self incorporate for about 500 (plus ~500-1k/yr in taxes), and
the SAFE note is available free online just fill in the blanks yourself.

If you already have people willing to shell out $1M then I guess it’s no
biggie to waste 15k on a lawyer. Not sure what the market is like today but a
$1M raise used to be priced round material, seems a bit much for a SAFE.

If you don’t have the $1M yet, don’t waste your time and money.

