We have an early startup and we need to incorporate as a C-corp and draft safe notes to raise a sum of $1M in funding. We came across a law firm that is willing to defer payments but they say all of that will cost some $15k.
Does anyone know how much it costs to create an investors-ready C-Corp and draft a safe note?
The SAFE note, should be able to be taken to an attorney and have needed details filled in and revised based on your specific situation. I would expect that to be less than $2k in general. That would be roughly 6-10 hrs of attorney/paralegal time generally which seems adequate to make modifications.
$15k seems high to me for just incorporating and modifying the SAFE note. However, $15k in legal fees to raise $1M doesn't seem totally out of line. e.g. closing documents, due diligence support etc.
Make sure you know what it is covering and not covering, because that makes a huge difference in whether it is reasonable or not. Also your location makes a huge impact on this as well as the law firms reputation and history of doing this stuff.
If you already have people willing to shell out $1M then I guess it’s no biggie to waste 15k on a lawyer. Not sure what the market is like today but a $1M raise used to be priced round material, seems a bit much for a SAFE.
If you don’t have the $1M yet, don’t waste your time and money.