Eric Theis

Partner @ Bling Capital - I build cool things and invest in great companies Former Software Engineer at Flexport, Barefoot Networks

[Scott Stevenson @scottastevenson]

Today we're launching @SpellbookLegal's biggest thing yet: Autonomous Contract Management

It’s the first end-to-end AI infrastructure for contracts

The world is speeding up. We are in one of the biggest investment cycles in decades.

Behind every rocket launch, FIFA game, and datacenter, lies a web of hundreds of agreements.

Agreements are the invisible threads that allow us to work together.

We have infrastructure for finance (Stripe, Ramp), eCommerce (Shopify) and many business functions.

But agreement infrastructure is lacking. This creates a painful bottleneck on our ability to work together.

Online purchases take milliseconds. But agreements still take weeks.

CLMs were supposed to be the answer, but were designed in a pre-AI era.

AI fundamentally changed how computers can accelerate agreements.

Spellbook is the most used AI contract review tool in the world, with ~5,000 customers in 80 countries

Now we are expanding to deliver the first end-to-end, AI native stack for contracts.

From the moment a deal lands in your inbox, to the day it renews years later, Spellbook’s AI supports teams every step of the way, across all business teams.

It runs 24/7. While you sleep, it's reading the deals that came in overnight, flagging the parts that actually need a lawyer, and clearing the busywork that used to kill mornings.

Nothing gets handed off between systems or slips after signature, and the intelligence stays with you for the life of the contract.

AI for lawyers is great. There are 20 million lawyers in the world, and many are our users.

But there are billions who touch contracts. We're excited to help everyone move faster and do more of what they love, by building the best AI-powered contract infrastructure in the world.

Get early access: https://t.co/ehs7vRMAr9

[Eric Theis @ertheis]

@rex_woodbury Congratulations!

[Scott Stevenson @scottastevenson]

Excited to share how @Dropbox's legal team adopted AI, and @SpellbookLegal.

They’re one of the most forward-thinking in-house teams we’ve worked with.

Dropbox serves more than 700M users worldwide.

AI is enabling them to automate standard playbooks, keep more deals in-house, and move through agreements faster.

Thanks for sharing your story:

[Spencer Schneier @spenceraviav]

Last year, when the Trump Administration launched its tariff campaign, I was amazed at how hard it was to find good information about what was really happening.

I would read one thing in the Wall Street Journal, and then go to a tax conference in Canada and hear the exact opposite from OECD officials and practitioners.

So when @rossmatican suggested that we should publish a magazine for Commenda, it was a no brainer. Doubly-so when he introduced me to @freeshreeda, our Editor-in-Chief

In this issue, we cover a lot of topics, but one thing Shreeda did an excellent job of is covering some macro themes the world is facing today.

Competitive Governance – now more than ever, jurisdictions are competing for trade, capital, and talent. From SEZs, to European corporate law, to AI and maritime governance, this is a recurring theme throughout the magazine that is deeply relevant to everyone reading it. Gone are the days when wasteful governments have large captive tax bases, and where anti-business politicians can bully corporations without risking their tax base.

The Great Game of the 21st Century – the U.S. and China are locked in a Not Cold War, and the implications of that touch every corner of the globe today. The Chinese model is predicated on centralized direction of capital towards strategic aims – a Capitalist-Marxist fusion offering of sorts, and the American model is still deciding what it wants to be.

The West has lost its understanding of its own prosperity. Industrial policy is the antithesis of what made the West great. The chaotic, bottom-up nature of markets and capitalism is exactly why we are so much more prosperous than even the most successful non-market economies. Yet we seem to have lost that.

Will Europe join the game? Will India? These are players with the capacity to play, but that have not taken the policy decisions required to do so. I explore this in my article on EU Inc, and we will be developing it more in future issues.

I had a ton of fun working with Shreeda and the writers, @JeffJMason @CalebDPetitt @Michael_J_Hil and @rjkarmayogi and am excited to share more in the coming weeks of the process and ideas that went into this first magazine

Read more below!

[Eric Theis @ertheis]

@scottastevenson What are the 10 companies in the S&P 500 with the *highest* average error rates?

[Scott Stevenson @scottastevenson]

60% of contracts filed to the SEC contain mistakes. Spellbook Labs ran 60,000 pages of contracts from 500+ public companies through AI to answer a question:

How often do human lawyers hallucinate?

Accidents from self-driving cars get headlines—and they should. But human drivers have a higher accident rate. We wondered if something similar might play out in contract drafting.

Reviewing 100 page contracts line-by-line is inhuman. Mistakes are inevitable. AI is very good at spotting issues like missing definitions and broken section references.

There are risks to using AI in law. But we also need to ask: what is the risk of *not* using AI review as a second set of eyes?

In the full report we show:
1. Top 10 public companies with the cleanest contracts
2. Error rates across industries (Media and Telecom were highest)
3. Error rates over time (we're not getting better!)
4. Error rates by contract type and length
... and a bunch more.

Congrats @IBM for having the cleanest agreements.

📌 Read the report here: https://t.co/oriPmvHa9o

[Eric Theis @ertheis]

@scottastevenson Because SF’s population is closer to that of St John’s than Toronto

[Scott Stevenson @scottastevenson]

Great to catch up with some of Spellbook’s seed crew. Never forget those who backed you before it was obvious.

@BillyDraper
@KatieS
@amansamraa
@ertheis

[Scott Stevenson @scottastevenson]

It’s time to expose a huge scam in AI startups: Contracted ARR

The reason many AI startups are crushing revenue records is because they are using a dishonest metric

The biggest funds in the world are supporting this and misleading journalists for PR coverage.

The setup: Company signs 3-year enterprise deals. Year 1 is discounted (say $1M), Year 2 steps up ($2M), Year 3 is full price ($3M).

They report $3M as “ARR” — even though they’re only collecting $1M right now.

The worst part: The customer has an opt-out option at 12 months! It’s not actually a 3 year contract.

In the chart below, by Q5 the company is trumpeting ~$100M “ARR” to press, while actual cash-generating, in-effect ARR is ~$35M. That’s ~3x inflation.

On top of this, enterprise AI companies are bundling full-time “forward deployed engineers” into deals massively reducing margins, sometimes producing Year 1 negative margins.

At some point customers are going to start triggering their opt-out clauses or aggressively negotiating down Year 3 pricing.

And a wave of enterprise AI companies may collapse.

[Eric Theis @ertheis]

@scottastevenson It doesn’t come up anymore because Spellbook would no longer be QSBS eligible even if it did have a US-based topco

[Scott Stevenson @scottastevenson]

Excited to share that @Dropbox has chosen Spellbook as its AI contract review platform.

Their legal team will use Spellbook to review and negotiate contracts faster and with greater consistency, so they can keep the company moving at lightning speed, with confidence.

And yes, we have a Dropbox integration.

[Lulu Cheng Meservey @lulumeservey]

I’m afraid this is the most perfect company swag I’ve ever seen

[Span @Span_App]

We’re proud to announce that we've raised $25M to help engineering teams navigate AI transformation with clarity.

AI has reshaped how software gets built, but leaders still lack the tools to understand what's really happening.

How to separate hype from reality. How to understand AI's true impact on quality, velocity, and team architecture.

Span gives engineering teams the missing layer of context and understanding.

The participation of over 100 CTOs, CPOs, founders, funds, and operators reflects just how deeply what we're doing resonates across the industry.

📽️ Watch the announcement below.

[Scott Stevenson @scottastevenson]

Spellbook has raised a $50m Series B led by @rabois at @khoslaventures.

Since 2022 we've grown rapidly to 4,000 law firm and in-house legal customers including Nestlé, eBay and Kennedys.

We aim to be the best way to draft and review agreements with AI—Cursor for contracts

🧵

[Bling Capital @blingcapital]

We just dropped the next post in our Navigating Diligence series:

Nail the 'Hair-on-Fire Problem' + 10x Better Solution

This is the first (and, we think, most important) exercise in our diligence playbook.

📘 https://t.co/nETXBbnpHz

🧵 What’s inside:

[Sunflower Capital @seedtosunflower]

We’re excited to announce Sunflower Capital Funds I and II. Sunflower is a $250m fund that partners at the earliest stage with companies building foundations for modern enterprises, critical industries, and the physical world.

[Eric Theis @ertheis]

Thrilled to be a part of Bling Capital Fund IV and invest in the next generation of early-stage founders!

[Benjamin Ling @bling0]

Excited to announce Bling Capital Fund IV: $270M to help early stage entrepreneurs find product market fit!

https://t.co/WxF2DEF3GF

cc @kylelui

[Scott Stevenson @scottastevenson]

Meet Spellbook Associate: The first AI Agent for law

Two years ago we launched the first GenAI copilot for lawyers. We had no idea it would now be used by 2,500+ legal teams!

Today we're launching the first full-fledged agent that can break down legal projects into plans, execute work across multiple documents and apps, review its work and re-plan as needed.

More below👇

[Benjamin Ling @bling0]

Honored to be part of the 2024 Forbes Midas Seed List. Thanks to the @blingcapital team and the Bling Capital Product Council, our LPs, and also our CEOs for the opportunity! ♥️

https://t.co/WPMUQmmcXO

[Scott Stevenson @scottastevenson]

We're thrilled to announce that @SpellbookLegal has raised a $20m Series A financing, led by @inovia.

In 2014 my musical instrument company got a legal bill that nearly zeroed our bank account.

In 2019 we launched Rally to help lawyers draft more efficiently using document automation.

In 2022 we launched Spellbook as the first generative AI copilot for lawyers.

In 2023 we assisted 1700+ legal teams with nearly 1 million contracts!

We're excited to deploy this capital towards building the most trusted AI assistant for transactional lawyers.

We have some huge new breakthroughs coming this year—which we'll start to show at @LegalweekShow next week!

Thank you to our incredible team, customers and investors for joining our mission to help lawyers escape transaction drudgery—ultimately delivering more value to the end clients of legal services, and helping lawyers focus on doing more of the strategic work they love.

Special thanks to our legal counsel at LaBarge Weinstein (@LWConnect) and the opposing counsel team at Osler, Hoskin & Harcourt LLP (@Osler_Law) and Inovia Capital who helped us close this deal in record time.