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Erik Byrenius is a former entrepreneur who wishes to give something back to the startup community. After selling his first startup Onlinepizza.se Erik wished to “enter” the startup scene anew. By a circuitous route this wish turned into startupdocs.se. Here, you can download fair and standardised term sheet, shareholders’ agreement, a guide to stock options and more – for free.
The idea with StartupDocs is simple:
“The main point is to save time and money for both entrepreneurs but also investors so that both can focus on creating value for the business instead of unnecessary legal stuff,” says Erik Byrenius, initiator and owner of StartupDocs.
During university Erik and his partner started Onlinepizza.se, which became market leader in four different markets. In 2012 they choose to sell it to the German Deliveryhero. After selling the company, Erik had a few new business ideas that he couldn’t really let go of. Unable to choose and realising that he could not focus on all of them at the same time, he came up with the idea of becoming a business angel instead. This would give him the opportunity to engage with several different startups and thus be active in more companies simultaneously. It was the process of becoming an angel investor which gave Erik the idea for StartupDocs:
“As I started doing angel investments I asked around to know what the normal terms and conditions in a seed stage investment in Sweden are. Typically, the answer was that there isn’t a real standard, and that you have to negotiate in every case” says Erik Byrenius
Given these answers, Erik decided to at least figure out what was normal in order to create his own template for his own investments. However he shortly came to realise that everyone must have the same problems – especially the entrepreneurs engaging in investments.
“Investors might have knowledge of how to create a template from previous experience. But especially first time entrepreneurs – how should they know what a normal term sheet is? How do they know whether the investors have a term sheet not beneficial the founders?”
Based on this realisation, the idea for StartupDocs was born: to set a standard for what is normal in a seed stage investment.
“I know that every situation is unique but I believed it would be possible to create a standard which you can start negotiating from, instead of the investors presenting an investor-friendly term sheet”
Not a new idea
Around the world there are several similar projects, so the idea in itself is not new. However, these kind of documents are of course totally legal country-dependent, and as there were no other alternative in Sweden Erik choose to proceed with the project.
“I realised there was nothing like it in Sweden. I thought it was a great opportunity to give back to the startup community that I have been a part of for some time running my own business,” says Erik Byrenius
Not quite enough with only a standard term sheet
Based on feedback from more investors and entrepreneurs Erik realised that it is not enough to create only a term sheet. The real value would emerge making a shareholders’ agreement and a subscription agreement related to the term sheet. Also, many asked for a guide explaining how stock options work and the legal options to set it up.
“Right now we are collecting feedback on the drafts from investors, entrepreneurs and lawyers to make sure that we are actually creating something that is considered standard,” says Erik Byrenius
Erik is not trying to create something new, and it is important for him to ensure a certain quality in the documents in order to be able to call it a standard.
“It is crucial for me to make sure that it is not me that is trying to create something new. Rather, that it is actually lawyers doing this who have previous relevant experience,” Erik Byrenius makes clear
The lawyers also see an advantage
One concern was that the lawyers would consider the documents a threat cannibalising on their own business. But what Erik has learned is that it is actually a way to help lawyers.
“Actually the lawyers are just happy with this service. They understand their own value proposition to the entrepreneurs, which is not to sell them templates. The value they actually provide is giving advice, helping out with negotiations and maybe litigations later in the process etc. So there are so many other places where lawyers can add real value using their competences and experiences instead of just selling document templates,” says Erik Byrenius
StartupDocs will launch in April. The service is free now and will remain so in the future. Erik is open for user feedback and already welcomes ideas for future expansion in the form of other legal documents. If you are interested you can already now sign up and get noticed when the site launches.
