7 years ago, when I started my first Internet company, I was the sole shareholder. Being a sole shareholder for a first-time entrepreneur in any field, makes you a mediocre entrepreneur, vainly proud, stupidly arrogant, and you uncannily make mistakes that are plain in sight for field tested professionals.
Unfortunately, the moment you decide to have co-founders, advisers, investors, and elect a company board, your life become a hell. Setting up all the legal papers would easily take up to 2 months, will distract you from operational goals, and in the end running a multi-stakeholders’ company request much more discipline in planning and execution. Be aware of what you wish for.
In many countries, the startup mania culture is new, and there are rarely enough local lawyers specialized in the specific legal documents required.
In 2011, Matt Hall and John Watkinson won Techcrunch Disrupt Hackathon to create a Github for legal documents called Docracy, which provides resources that take the fear and mystery out of legal agreements for startups. Docracy has been started as a reaction to the problems of finding reasonable documents when creating and running a company for the first time. After discovering that others were having the same problem, Matt and John began working on the idea full time after raising $650,000 in seed-fund.
There are now thousands of free legal documents to search and download for free, in one place. These templates will not replace your lawyer or attorney, but would certainly help you be proactive in protecting your assets and limiting the risk to be screwed. Baby, It’s a dangerous world out there!
Here are some examples of documents you can can download from Docracy: