September 26, 2007
As with Brad, I love a good rant, and Dave McClure’s wild one this week about how VCs and Lawyers Need to Simplify, Innovate, and Automate is fantastic. I have a roughly 3 foot shelf in my office that has all the bound paper documentation for the financings and M&A we’ve done here over the years and have always felt like it’s an enormous waste on many levels. The insanity of the faxes, zillions of signatures, original copies, and triplicates is overwhelming.
But the core of the rant is a beautiful and simple suggestion that those who invest in lightweight technology companies and automation platforms should learn how to use just those technologies in their own businesses. I couldn’t agree more, and it reminds me of my least favorite answer EVER from a VC about why some piece of legal documentation had to be done a certain way: “Because that’s the way we always do it.” That argument doesn’t even work when a parent uses it on a 5 year old!
I think lawyers are particularly problematic to this cause, because even if an innovative VC wanted to do things easier and differently, the lawyers would probably throw up all over it. But in the end, if the VC is the client, he or she can and should overrule and manage counsel. The world is now moving at too quick a pace to keep deal paperwork in the stone ages.