What is Series Seed?
Series Seed is a standardized set of legal documents that can be quickly and easily deployed for a seed investment round. This collection was developed by Cooley LLP and represents a streamlined approach to seed financing that balances the interests of both entrepreneurs and investors.The Series Seed documents are designed for seed rounds typically ranging from 2M, though they can be adapted for different amounts based on your specific needs.
Key Features
Simplicity and Speed
The Series Seed documents are intentionally straightforward, avoiding unnecessary complexity that can slow down early-stage financings. They provide essential protections while minimizing negotiation time.Balanced Terms
These documents reflect “market” terms that are generally fair to both founders and investors, incorporating lessons learned from thousands of seed financings.Automated Document Generation
The documents are available through automated document generators at:- Equity financing: https://cooleygo.com/seedequity/
- Convertible notes: https://cooleygo.com/seednotes/
Document Sets Available
Series Seed includes two primary financing structures:Equity Financing Documents
Equity Financing Documents
Used when investors purchase preferred stock directly:
- Term Sheet (Equity)
- Preferred Stock Investment Agreement
- Restated Certificate of Incorporation
- Board Consent
- Stockholder Consent
- Investor Questionnaire
Convertible Note Documents
Convertible Note Documents
Used when investors provide debt that converts to equity later:
- Term Sheet (Convertible Note)
- Convertible Promissory Note
- Board Consent
- Investor Questionnaire
When to Use Series Seed
Consider using Series Seed documents when:- Raising your first institutional capital (seed round)
- Seeking a balance between founder-friendly and investor-protective terms
- Working with professional angel investors or seed funds
- Looking to close quickly without extensive legal negotiations
- Raising between 2M (though adaptable)
Comparison with Other Options
Series Seed vs. SAFE
While Y Combinator’s SAFE (Simple Agreement for Future Equity) is simpler and faster, Series Seed equity documents provide more structure and immediate investor rights, which some investors prefer.Series Seed vs. Full Series A
Series Seed documents are lighter than typical Series A documents. They have fewer protective provisions, simpler governance structures, and less extensive representations and warranties.Key Terms Overview
Liquidation Preference
Liquidation Preference
Series Seed typically includes 1x non-participating liquidation preference, meaning preferred stockholders receive their investment back before common stockholders in a liquidation event.
Board Composition
Board Composition
Board structure is negotiable but typically includes founder representatives and may include one or more investor representatives depending on the round size.
Information Rights
Information Rights
Major Purchasers (those investing above a specified threshold) receive annual and quarterly financial statements and inspection rights.
Participation Rights
Participation Rights
Major Purchasers have pro rata rights to participate in future financing rounds to maintain their ownership percentage.
Drag-Along Rights
Drag-Along Rights
If approved by required majorities, all stockholders must participate in a sale of the company on the same terms.
Source and Attribution
The Series Seed documents are maintained by Cooley LLP and are available as open-source resources. The current version (v3.2) reflects updates and improvements based on market practice and feedback from the startup community.- Original Repository: github.com/CooleyLLP/seriesseed
- Documentation Generator: cooleygo.com
- Historical Context: Series Seed was created to standardize seed financings and reduce legal costs for startups
Getting Started
- Determine your financing structure: Equity vs. convertible note
- Review the term sheet: Understand key economic and governance terms
- Consult with counsel: Have experienced startup counsel review terms
- Generate documents: Use the automated tools with your specific terms
- Execute and close: Sign documents and receive funding
The Series Seed documents are designed to work together as a complete package. Modifying individual documents without considering the entire set may create inconsistencies.
Additional Resources
- CooleyGO Resources - Free tools and resources for startups
- National Venture Capital Association (NVCA) - Industry standard documents for later-stage rounds
- Understanding the difference between friends and family, seed, and Series A financings