Initial Feedback & Next Steps on Open Source Angel Investment Templates

We share the feedback after the release of the open source angel investment legal documents templates.

Recently, together with Huifen Zheng, we launch the open source angel investment templates. Our aim of the project is to facilitate angel funding in Singapore for both startups and angel investors. At the same time, we hope to provide a set of documents to help overseas entrepreneurs from other parts of the world, which incorporate in Singapore with the aim to receive financing from Singapore investors. With the initial launch, we have received some feedback from the users and even enthusiasts within the community here in Singapore who have created interesting applications with the legal documentation.

  • Putting Version Control Technology on Legal Documentation: As a technologist and programmer, I have programmed, stored and collaborated on source code with other programmers through version control repositories such as GitHub. As the initial phase of the legal documentation was done through revisions via email between Huifen and myself, the next step is to apply the technology of version control to the documentation. What if we can take a step further and put the legal documentation we created into a repository and edit & improve the documentation similar to the way we do programming? The idea of using a version control repository has been raised by Clay Shirky in a TED talk and not surprisingly, the Y-Combinator series seed legal documentation has a GitHub repository. The idea and feedback have been raised in the Open Frog forum, a Google group run by the JFDI.Asia team. Through the efforts of Sebastiaan Deckers (@sebdeckers) and Veronica Ng (@veronism) from Cofounders.SG who have spent many hours of efforts working in the last two days, our open source angel investment templates are now hosted on GitHub and a more web friendly version: for viewing by entrepreneurs and investors. You can check out their efforts and provide us with feedback. This will enable us to improve and iterate on the existing documentation while others might want to fork our legal documentation for their own use.
  • Additional Description on the Debt & Equity documents: While we have spent a significant amount of time to work out these initial templates, we also received feedback from entrepreneurs that they need some guidance in understanding some of the legal terms and what it means for them if they apply certain conditions. Of course, both Huifen and I would want to write more on each one of them and explain the rationale and how these contracts work for entrepreneurs and investors. As the initial work has been done, we would both write from our individual blogs with her covering the legal aspect and myself on the entrepreneur and angel investor perspective. We are in the midst of working to see if we can have a feedback session with entrepreneurs to see how we can improve these documents. If you want to understand these, James Chan, co-founder of Silicon Straits and investor, have written on this topics: Redemption & Put Option, Veto Rights and Liquidation Preference and they are all worth a read. We want to work with lawyers and investors within the community to continue the efforts to strengthen the legal documentation for the ecosystem.
  • Creation of Additional Templates on other legal matters: Of course, we have requests from entrepreneurs to help and churn other documents such as non-disclosure Agreements, employee contracts & stock option plans. To undertake these initial efforts did take a lot of time and effort for both Huifen and myself, and we will work slowly on this. If any entrepreneur and angel investor will engage a lawyer to reproduce the initial angel investment document we created, it would cost at least S$3-5K excluding billing hours. As each startup requires its own customisation of the contract, we have to think through what the common clauses we can cater for each of these addition requests. Of course, if others are willing to step in and work with us, we can move the needle further.