As a general matter, the complexity of the documentation used for private company capital raising transactions is correlated with the amount raised. If a company is raising, say, $5 million or more from an institutional investor like a venture capital fund, the deal documents will often be based on the model legal documents prepared by the National Venture Capital Association (NVCA). While the standardization, easy availability and wide acceptance of these forms have been helpful in reducing legal costs and negotiation time, they are still over 100 pages spread over several agreements with many negotiable provisions. But in the context of the amount being raised, the associated costs are relatively small.

On the other end of the spectrum, very early stage companies can quickly prepare documentation for accredited investors using SAFEs or convertible notes. But what about the in-between case, where the company is ready to raise true equity capital, and not a bridge instrument like a SAFE, but it doesn’t need or want to raise more than, say, $1 million? With such an amount, the NVCA forms seem a bit overkill and cost-ineffective. Enter the Series Seed open source documents.

These forms represent a nice middle ground. On one hand, they contain a number of investor protections that sophisticated investors expect in an early stage investment, like a liquidation preference and veto rights over a laundry list of major decisions. On the other hand, the documentation is much shorter than the NVCA forms, and drafts can be generated by answering a series of standard questions on the site in a few minutes. As I’ve often said, automation in my industry would seem at first blush to be a threat to my livelihood, but to the extent my job can be limited to its core functions, such as in this case working with my client to understand these agreements, as opposed to spending hours adapting a form from another transaction, it’s a trend that I fully welcome.