Startup Lawyer

I’m Mike Gorback 👋 Startup Lawyer and Partner @klgates (ex-@hansonbridgett, ex-@wilsonsonsini). Angel Investor. Tweets do not = legal advice. 😁 DMs open.

[Startup Lawyer @mgorb79]

Welcome to my new followers and all of you reaching out in my DMs! I tweet about SAFEs, SAFEs, SAFEs, other startup law stuff (incorporation, founder issues, equity and cap tables, M&A, technology agreements, etc), SAFEs, and the occasional SAFE. I love working with awesome founders who are building life-changing tech, and along with my colleagues at @HansonBridgett am passionate about supporting underrepresented founders. If you dig my content please consider following. Thank you! 🙏🚀😁

[Startup Lawyer @mgorb79]

@StephNass “And in addition to our upcoming round, we do a killer cover of Metallica’s Sad But True!”

[Peter Walker @PeterJ_Walker]

Solo founders have shot upwards since ChatGPT launched.

VCs remain more hesitant to fund them, yes. But that's less and less every year.

Data only looks at companies on Carta, which implies the startup would like to give equity to its employees even if it doesn't raise VC.

[Peter Walker @PeterJ_Walker]

Here's real data on what SAFE valuation caps are for companies raising their early rounds in major US markets.

- Medians are already high

- 90th percentiles are wild

- Yes, this is a LOT of AI companies

- about 90% of startups start fundraising on SAFEs

[Startup Lawyer @mgorb79]

@PeterJ_Walker Terrible. Founders often underestimate how quickly equity can go out the window. At the very least I’d hope those advisors are on some legit vesting schedules. But a vesting schedule is only as good as the founder’s willingness to terminate the relationship.

[Startup Lawyer @mgorb79]

@Eli_Albrecht Def true re corporations….

[Startup Lawyer @mgorb79]

Nope. Nobody is raising that much (at that implied valuation) without going through a lot of diligence and proving a real business. Even at a $20m raise, you can’t raise that at say $100m valuation just on a deck and an idea. You will have had to show you’re a real company. Also, the reps and warranties are actionable if they were false when made.

[Gabriel Jarrosson @GJarrosson]

Series A has been seen as an indication of Product Market Fit, and a de-risked investment.

But they’re getting harder and harder to come by.

It’s been nearly two years since Lightspeed partner Nnamdi Iregbulem wrote about The Series A Bust.

A common explanation for the Series A winter is raised expectations – investors are demanding to see better metrics and traction.

Most companies don't meet this new, higher bar, hence fewer deals get done.

But what about YC?

Well…

45% of YC companies get to Series A (median ARR is $1M+, trending up)

Can you find another place where that is true in any set of potential investments in the world?

[Startup Lawyer @mgorb79]

Lot of truth to this.

[Harry Stebbings @HarryStebbings]

Series A is the worst place to be investing today.

Company progression from seed is minimal.

Pricing is 4-5x the seed round.

So the price to progress ratio is f******. Paying 150x ARR for little sign of PMF, at best.

Plus, the competition is mega both domestic and US.

Go early or go late.

The reality of venture in 2026.

[Startup Lawyer @mgorb79]

@StephNass Unless you have no shop clause in your signed term sheet….

[Rohit Mittal @rohitdotmittal]

more founders are starting companies than ever before and fewer (as a percentage) are becoming very big very fast

the $1M-$5M arr is the threshold i've seen when founders see significant slowdown in growth

founders need to ask themselves what they want to build

sometimes, the answer is that this is not the company that'll be a billion dollar outcome

but the important thing is to ask the question

and be clear about why you want to pursue this

if you want to build the largest company you possibly can, you should go for it

but if you don't feel like this is your life's work, it's better to focus on your efforts on your next big idea

many founders get stuck because they started the wrong company or went to the wrong market or had the wrong timeline

changing directions to work on your next big thing is a first step towards success

[Logan Gott @LoganTGott]

The founders booking 30+ calls a month from LinkedIn all do the same 5 things:

1. Post 6-7x a week (not 2-3)
2. Send 200 connection requests weekly to qualified leads
3. DM every single new connection within 24 hours
4. Follow up 2-3 times on non-responders
5. Post 2x+ lead magnets a week

Then do that for 90 days.

[Startup Lawyer @mgorb79]

@toddsaunders Great take. 🎯

[Startup Lawyer @mgorb79]

@andrewdsouza This is awesome. 👏

[Startup Lawyer @mgorb79]

@Melt_Dem I don’t charge anything for a SAFE. I just point my clients to the YC website!

[Peter Walker @PeterJ_Walker]

Startups are FLYING off the shelves these days.

232 Carta companies were acquired in Q4, new record. That's up 60% from Q4 2023.

That includes 28 transactions involving companies at Series C or beyond (2nd-best quarter ever) so it's not all small acquihires

[GREG ISENBERG @gregisenberg]

ive been hanging out with founders under 22 lately living in sf/nyc and they're built different.

my observations of these young founders getting rich with AI:

1. these kids grew up watching YT creators flexing Porsches and private jets from their bedrooms. but when they looked at their own reality, they saw $200k college tuition and $45k entry-level jobs. the math didn't work. so they decided to skip the broken system entirely.

2. that economic reality shaped everything about them. they're unapologetically capitalistic in a way that reminds me of the 80s Wall Street era. pure survival capitalism. they think they need millions just to live comfortably, they look at $4,000 studio apartments in ny, and they're not wrong. tons of economic pressure for everyone right now and inflation worries.

3. so they formed group chats with other founders. their mentors are podcasts. they're plugged in and learning 24/7, treating business like a multiplayer video game they're trying to beat.

4. sam altman said something that stuck with me: older generations use ChatGPT as a Google replacement, but these kids use it as an operating system. they see this AI era as their gateway out of economic reality.

5. everything they do is optimized for virality. their startup journey reads like a Netflix documentary with built-in trailers. every product decision considers "will this clip work on X?" they reverse engineer social algorithms with their business models. it's like NELK Boys meets Spielberg meets YC demo day.

6. they build products designed to go viral on specific platforms. they'll time launches around trending topics. they'll create TikToks showcasing their SaaS tool like entertainment content.

7. some go the cash flow route, building consumer mobile apps like nikita or build saas portfolios. others raise millions in VC funding. the more the vc the better they think.

8. they document every failure, breakthrough, and late-night coding session. their businesses are performance art for the algorithm age.

9. they're not trying to fix the broken system that priced them out. they're building entirely around it. and they're winning because they accepted the new rules while everyone else is still playing by the old ones.

10. a lot will fail in public and end up working at companies. it'll be crushing. especially the ones that raise tons of vc. that's the game. but some will succeed in ways we've never seen before.

11. they think in portfolios from day one. not “this is my startup,” but “this is one bet.” apps, tools, experiments, accounts. they expect most to die and one to change their life.

12. many are hyper-capitalistic. michael douglas in wall street energy, but with claude, cursor, and viral clips instead of suspenders and cigars. theyve got big dreams and aren't afraid to go after them.

13. the same inflated world that crushed previous generations might have created the most resourceful generation of entrepreneurs we've ever seen. they are turning systemic failure into competitive advantage.

pretty genius when you think about it. the kids are alright.

[Startup Lawyer @mgorb79]

@RetentionAdam Solid.

[Startup Lawyer @mgorb79]

@rohitdotmittal This is brutally honest and spot on.

[Startup Lawyer @mgorb79]

@TheGeorgePu Appreciate this sentiment, but have seen way too many amazing co-founder relationships and far too many toxic ones to generalize one way or the other.