Karthik: With the new year around the corner, Anisha and I thought it would be a good idea to put our thoughts out on why we started LexStart and what we hope to achieve in the coming year.
Over the last 4 years that Anisha and I have worked together, we have been investors, mentors and confidants to quite a few startup founders. Some of whom have given us feedback on what works and what they really need 🙂
One of the things we have noticed in most young companies, ourselves incldued, is that they make best efforts to stay on top of all their compliance matters, but, as Yoda says, “try not, do or do not, there is no try”.
We felt that most often the startup’s governance is mainly limited by the quality of advice they get and compounded by the lack of founder’s bandwidth to actively track (chase) all the actions required or done on their behalf. A lot of these compliance matters build up and get more complicated with time. All this translates into a laundry list of conditions precedent to (or, things to get done before) an investment, creating anxieties for both investors and startups alike. Questions raised on governance are always a can of worms leading to closer scrutiny.
We started LexStart to address this issue. We take on the drudgery of legal and compliance work and at the same time work to educate founders on understanding the legal ramification of all their actions and ensure that they keep their startups investment ready at all times.
Anisha: As a transactional lawyer, while assisting VCs on investments in startups, I noticed one common trend in all the deals that I worked on. While the VC would promise the startup “money in bank” in 30-45 days, this timeline invariably got stretched to 100 days or more. The reason being that when the VC’s legal counsel perform a due diligence on the startup, they find that the startup had several compliance related issues, some of which are probably easy to fix while others could take a while. This happens because founders are busy trying to prove their business model, and for obvious reasons, compliance takes a back seat.
No entrepreneur is excited about paperwork and filings! That is where we felt the need to have a platform that founders could trust and dump all their legal and compliance woes on while they get busy taking care of business. Imagine having your own “in house counsel and compliance manager” at a fraction of the cost!
At LexStart, our aim is to be every startup’s in-house counsel and compliance manager, handholding them through their legal and compliance concerns. Having represented investors on deals, we know what exactly they will ask of a startup while investing in them. We rely on a team of lawyers and company secretaries who have transactional experience to assist startups with keeping their house clean and investment ready at all times.
What we really hope to achieve is to inculcate a pro-active culture in startups when it comes to compliance. Why wait till your investor’s counsel asks you to fix things! Fix them before hand, so that you can get money in bank at the earliest and accelerate your business. So to all the founders who have read this far, we have to make it a new year resolution to #startright_rightnow!