Posted by: Olga Kharif on March 1, 2010
Seeking startup funding may soon get easier. A group of venture capital firms led by Andreessen Horowitz on March 1 unveiled a Web site www.seriesseed.com designed to streamline the way startups apply for seed funds, cutting the number of documents young companies need to fill out.
The Web site, formed with the help of startup lawyer Ted Wang, contains 30 pages of free documents entrepreneurs can fill out to apply for $300,000 to $1.5 million of initial funding. Typically, such documents run about 100 pages and have to be customized by lawyers. The 30-page term sheet would have to be customized as well, but it would dispense with some sections typically unnecessary for early-stage investments, such as those dealing with prior investors. The idea behind the effort is to “save start-ups time and money,” Wang tells Bloomberg BusinessWeek. “The negotiations process will also be shorter.”
Ten well-known venture firms have committed to accepting these so-called Series Seed Documents. They include Charles River Ventures, SV Angel, Polaris Ventures and Andreessen Horowitz, which is an investor into Web-calling company Skype and social games maker Zynga. “We are committed to making deals on these terms,” says general partner Ben Horowitz.
The venture firms hope others will end up supporting this effort as well. “I think this will become a new standard, and people will be able to raise money more quickly,” Wang says. Bloomberg LP or one of its subsidiaries is an investor in Andreessen Horowitz. Bloomberg LP also owns BusinessWeek.com.