A new website has been launched in South Africa providing a repository of documents aimed at assisting startups in obtaining their first funding rounds.
The documents available on Series Seed have been launched through a collaborative effort between Newtown Partners, which handles Vinny Lingham’s investments in South Africa, Esselaar Attorneys, SiMODiSA and Silicon Cape.
Series Seed is based on a United States (US) equivalent, and contains locally adapted investor documents that can be downloaded for free by startups.
Llew Claasen, managing partner of Newtown Partners, told Disrupt Africa the complexity of transaction documents and the associated legal costs often made the process of raising small amounts of angel investment “cumbersome and costly” for startups.
“South African angel investors also have their own preferences for non-standard terms, which can affect the startup’s ability to raise further funds down the line,” he said.
“We wanted to create a set of documents available to all startups at zero cost, which accurately reflect standard investment terms, the principles of which are borrowed from others with years of startup investing in Silicon Valley.”
Claasen said Series Seed would make it easier for South African startups to raise additional funding rounds.
“Over time, we expect that this initiative will contribute to creating more experienced entrepreneurs and angel investors in South Africa, which will increase the number of early stage investments which we can participate in and also makes it easier for us to syndicate deals to experienced angel investors,” he said.
“Syndicating deals to other angels makes it possible to go after much higher risk opportunities, with higher potential returns), without any single investor losing their shirt.”
