Launch HN: Axdraft (YC W19) - Legal documents for startups in minutes
We have built Axdraft, because we believe that sometimes founders don’t need 20-page ironclad contract, 2 weeks of negotiations and detailed explanation of all risks. On early stages you just want to have a good, balanced agreement fast to move the deal forward while it's hot. The biggest difficulty here is that lawyers push us to perceive contracts as unique and, therefore, not possible to automate. Usually, by saying unique, they mean that there are 20-50 possible variations of a clause in the contract.
We are a team of brothers, who combine legal and tech expertise, Yuriy was a lawyer for almost 8 years at one of top law firms in Europe and when he started noticing that even the most complex legal transactions have many patterns, he reached out to his brother Oleg, who at that time was Senior Software Engineer at Booking.com in Amsterdam.
We teamed up to try to figure out and automate most common variations and allow any young startup, as ourselves to draft a document, which they need now. We spoke to about 100 founders and came up with a list of top-6 contracts startups use, including: (1) NDA; (2) Pilot agreement; (3) Services agreement; (4) SaaS agreement; (5) SAFE; and (6) Employee onboarding. We are already working on Terms of Service, Privacy Policy, Founders Agreement and LoI, which are top-4 documents requested by users. We will be more than happy to add other documents upon your request.
Our main differences compared to Clerky, LegalZoom, RocketLawyer and similar solutions are:
1. we focus on startups, which makes the content more tailored; 2. we offer documents for free, because I see little value in the legal document itself. The main value of a lawyer, in our view, is in counseling, sharing the liability and providing you assurances; 3. we offer plain English description of the implications for each choice you are offered when drafting a document; 4. to use Axdraft you don’t have to register, because we want to create flawless and super-fast experience for founders to create legal documents; 5. we are happy to customize documents of registered users with their logos, company details and some custom language upon request.
We intend to monetize Axdraft by giving an option for startups to submit any document drafted with Axdraft or a document they received from third party for approval or review by a lawyer for a small fixed fee, which would still be much more affordable than engaging a law firm.
Currently, we offer founder to founder review, which is not a legal review at all, but more a business advice from a fellow founder, who is eager to share his experience with similar contracts.
We estimate the market for this product to be less than 1 bln USD at the moment, but we expect it to grow as the number of startups founded each year increases and as we expand into a larger 7 bln USD market of small businesses (under 20 employees) in the US.
We are really excited to hear your feedback about Axdraft. Please try it out at https://business.axdraft.com (registration is not required) and let us know what you think.
66 comments
[ 3.1 ms ] story [ 100 ms ] threadThis is an interesting product! I generated a sample document to see what it looked like and I was impressed by both the simplicity of the document generation process and the quality of the output. I also think it is great that there is no signup, email, or any other gatekeeper preventing me from using the service.
I frequently find myself involved in early stage projects where these sort of legal documents would be very handy. I would love to see the document types that you're already working on, as well as perhaps a freelance / work for hire Letter of Agreement, as many startups begin by putting food on the table consulting.
A few things about the service:
1. What license, if any, are these documents generated under? I know sites like contractology let you use the docs for free but require attribution, or they can be used without attribution for a small fee.
2. Other than official legal review, do you plan to monetize any aspect of the service, such as the customization offered in the fifth point in the "main differences" section? Why or why not?
3. Where are your market size estimates coming from? Is the market that you are measuring the total amount that startups spend per year on legal expenses, or is it something else?
4. I was confused by some of the wording during the signup process "No I Makes sense, if pilot is very simple," for example, was an option.
Regarding the fourth point, I have some experience working with European companies to improve the fluency of their website's English business and technical writing. My email is in my profile if you are interested in learning more.
On each of your questions:
1. We don’t impose any license terms. It’s free to use and share for everyone. The reason being that we want people to share the news and get the benefit of AXDRAFT instead of thinking twice not to violate some kind of restrictions.
2. We don’t intend to monetize on personalization for now, but eventually we want to become a first point of contact for all startup legal work and this will become our source of revenue. We choose not to charge for personalization, because we want users to clearly feel the value between finding a free template on Google or using other services.
3. Market size comes from the number of startups and small businesses and the assumption that we will get around 100USD of fees per startup per month.
4. We will fix it and will hope for your help for this.
You very likely need a license so your customers aren’t (technically) in violation. CC0 license is a straightforward one for these kind of situations, might be worth checking out.
Per usual: not a lawyer, certainly not your lawyer, please double check with an attorney.
This seems like a useful service, although I'm curious what the business model is here. Is it entirely based on the "Request review by lawyers" button at the end? Do you think that the market of people who are willing to pay for lawyers but not pay for lawyers to draft documents is large enough? (or perhaps I'm misunderstanding the angle here)
On a positive note, I really like the way prior answers appear below the current question on the survey!
>Customer I In this case customer will be Company, and you are the one providing services (Contractor). Choose wisely
I think there are some typos here and I'm not sure why I need to choose this option wisely.
Going through the questions, it looks like you are using "I" as a separator which is confusing.
>Do you want to include interest on late payments?
I think a discount for on time payments is better than charging interest. Interest makes it seem like the customer can delay payment if they feel like it.
>Should Contractor be able to remedy deficiencies in Services, if Company (you) does not accept them?
In question 1 the customer was the company and I was the contractor, but now they're swapped.
It sneaks in some terms I wouldn't agree to:
>all Work Product and other materials provided by or on behalf of Contractor will not contain any viruses, “Trojan horses” or other harmful code;
>Contractor would cause Company irreparable harm for which Company has no adequate remedies at law. Accordingly, Company is entitled to specific performance or injunctive relief for any such breach.
>require Contractor to pay the adjustment of $ Type in amount of reduction in fee, in case Contractor fails to comply with quality requirements for Services in USD I example: 500.
>keep copies of all books and records relating to Services during the term of this agreement and for three years thereafter. Company may upon reasonable notice and during normal business hours examine and make copies of all books and records relating to Services
When looking at the preview document I expected that at minimum I would be able to click on the green text and edit it. Ideally, I should be able to edit the whole document.
Sorry to say that I don't think I would use the service. It's a bit sloppy in places which isn't reassuring when generating legal documents. I don't think what it spat out was something that I would want to use. It seemed to be tilted in favor of the client where I'd rather send something in my favor/neutral and have them redline it if need be.
Regarding the editing, you should have received a final Word document with 100% ability to edit it. Preview is just to get a general sense of the document.
Regarding the discount on payments, thank you for the suggestion. We will add this option and we have specifically created a "suggestion" button on the website.
Thank you again for your feedback. It is very valuable! We will fix everything and let you know (if you want to).
This has left me even more confused. If I'm the contractor why would I want an agreement with many provisions against me? In that scenario I would want a contract neutral to in my favor. Something that will get me past my client's legal team while protecting me as much as possible.
>Regarding the editing, you should have received a final Word document with 100% ability to edit it. Preview is just to get a general sense of the document.
Ah, I stopped at the preview point.
Backstory: When I sold Hashrocket in 2011, I added a clause to the sale agreement that let me keep all the legal IP that I had developed over the years. A little bit after that I carefully prepared my well-honed MSA contract into a template bundle with different formats and annotations. Over the years I added more templates based on documents I've actually used in my businesses. It's a nice little passive income project.
If there were truly industry-standard forms that all attorneys were familiar with for these standard agreements, that difficulty wouldn't arise. That's how the residential real estate market in the US works, for example — standard forms for all sorts of situations approved by the real estate associations. It's sort of like how an open source infrastructure product will eventually become the cheapest thing to use because everyone already knows how it works.
Do you have a goal/roadmap for making your agreements the industry standard?
One thought I had for a future version -- why not let both parties access the document on the site and build it together? That's something I'd definitely pay for.
> Our main differences compared to Clerky, LegalZoom, RocketLawyer and similar solutions are: 1. we focus on startups, which makes the content more tailored
We (Clerky) are exclusively focused on startups. We started Clerky specifically because there was no online service that was suitable for startups. Not sure if you meant for that first point to only apply to LegalZoom or RocketLawyer, but I wanted to clarify that.
Good luck with everything!
We lost nearly a month's revenue paying off taxes and filing legal amendments.
Also you guys handed over my account to CSC as agent and we weren't even aware of it.
The advice was from Delaware government customer service.
One point of feedback: What you gave me was a Word Doc. I know Word Docs are the bread and butter of the legal profession, but I want to use this privacy policy on a website. That means I'll have to convert it to HTML, which means either getting really ugly HTML after I ask word to save it out, or having to copy/paste it and then reformat it.
It would be great if you could output a more convertible format, like LaTeX or Markdown.
All that’s to say: don’t neglect the educational aspect of what you’re selling. Make it easy for founders to explain how your documents works, and make it easy for investors to trust the documents you’ve prepared.
Another point to this is that we focus mainly on contracts, which startups use in their operational activity. I think this part is underserved most severely.
We have SAFE, because it is commonly requested by founders, but I think that Clerky does better job on corporate for now, since they have Board Consent+SAFE+signing+storage.
I wanted to see what a privacy policy would look like. I don't collect any user information but I was required to select at least one type of data that I collect.
Similarly, I accept payments but not via any of the listed payment processors, but I was required to select at least one of the payment processors.
I think both of these could be solved if you removed the requirement to select at least one option.
I would love to see a Terms and Conditions template alongside the Privacy Policy one.