

Ask HN: Received an incubator term sheet, should I get a lawyer? - bdclimber14

I was accepted into an inaugural startup incubator that offers $20,000, mentorship, and office space (the usual benefits) in exchange for a percentage of the company. I am happy with the terms at a high level, but I honestly don't understand everything on the term sheet.<p>Is it worth it to hire a lawyer to look for anything that may inhibit future funding? Has anyone gone through this process? Specifically, I'd love to know what most startups do in this situation. I think most startups just trust the program, but since this is a brand new incubator, I think we are all learning together.
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ActVen
Yes you should get a lawyer to help you understand it. However, try to get a
recommendation from someone you trust and then give specific instructions to
the lawyer. Tell the lawyer you want to have them review the contract with you
in the room and explain what the various terms mean. This will help you learn
about some of the topics and see if it is a lawyer with which you might want
to build a relationship with for future business dealings. Spending a few
hundred dollars on this type of activity will greatly benefit you in the long
run.

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briandoll
I can't help but think that anytime you think you _might_ need a lawyer, you
probably do. Personally, I'd get a lawyer to review the contract just so I
understood exactly what I'm getting myself into, even if the incubator had
been around for ages.

I'll also toss out a personal recommendation for Gabe Levine, who has a blog
online about lawyering for makers: <http://mylawyergabe.com/>

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aquark
If there are multiple start-ups being accepted at once into the incubator, and
if the terms are identical then maybe you can pool resources to talk to a
lawyer and amortize the cost.

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bdclimber14
That's a very helpful idea, I didn't think to discuss it with the others.

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phlux
Is this Rock Health? They stated in the original application, that the 20K was
a grant and not for equity... if this is Rock Health, then it looks like they
changed that term.

