Clerky v Stripe Atlas v AngelList Stack
So you're ready to launch your startup. The traditional law firm route can be quite the expensive investment, especially for a pre-seed company. Luckily you've found some automated online services that can help. No not LegalZoom. Seriously don't use LegalZoom. Something a bit more sophisticated and VC friendly is what a founder like you is after. You did your diligence and concluded the three big players in the space are Clerky, Stripe Atlas, and AngelList Stack. The question remains which one to chose and why?
First let's asses some key features your startup will need listed in order of importance:
Entity formation - all the legal docs/filings to get your startup started. This is the basic requirement.
Founders stock issuance - your company's ownership structure starts with its founders. Having the ability to issue your founders stock is key.
Employee equity issuance - early key hires will likely want some skin in the game so you offer them equity. Issuing and administering such equity grants is a vital tool.
Cap table management - a cap table makes it easy to see who owns what. Managing a cap table, however, is not quite so easy. Don't fall pray to the excel/google sheets cap table follies. The startup platform you choose to go with should help you build and manage a VC ready cap table.
Funding - it's time to get some $$$. Early on this typically includes SAFEs, data rooms, and a whole lotta legalese I won't bore you with. Suffice to say it's a labor intense process that needs a lot of legal oversight.
Banking - setting up a business checking account might not be the most difficult task, but why not make your life a bit easier and have your startup platform do it for you.
Now with the background info out of the way it's time for the main event.
*While Clerky doesn't automate bank account creation they do offer some bank integration.
Some Other Considerations:
Y Combinator Approved
Clerky is Y Combinator approved. For those of you who are not familiar with Y Combinator you best get acquainted. They're the accelerator behind some of the valley's favorite unicorns, and offer a plethora of free indispensable resources. I'd start with their free online program: Startup School.
From the mouth of babes. On a post from r/startups subreddit, here's what Clerky founder says distinguishes their platform from the rest.
While Clerky may have been built by startup attorneys, Stripe's and AngelList's legal knowhow should not be taken lightly. Orrick, Herrington & Sutcliffe, one of the biggest law firms in the country and a major player in the startup space, partnered with Stripe to launch Stripe Atlas. While AngelList enlisted Goodwin Procter to their aid for their template docs.
There is something to be said about Clerky's platform allowing collaboration. It's the only platform that allows you to add an attorney reviewer, i.e., your attorney can log in directly to Clerky and review all your generated paperwork ensuring it's up to par. Quite the useful tool if you want to combine automation with the added, and often invaluable, benefit of a legal expert.
Fully Automated Funding
Funding is an integral part of a startups lifecycle. While Clerky does offer funding support, AngelList has all but automated the entire process. An important and forward thinking distinction I wanted to flesh out a bit more in this post. With AngelList everything is done in platform. Investors will be taken to a customizable data room where they can find your pitch deck, term sheet, and any other vital info about the funding round. If they chose to invest they can do so with a few clicks. Your cap table is automatically updated to reflect the investment. It really takes a lot of steps the out of the equation and makes AngelList more of a truly automated platform.
Another standout feature of AngelList Stack is it allows you to be part of the AngelList ecosystem. AngelList has made investing way more accessible to both angel investors and fund managers alike. According to their Angel Venture page, the platform has 9,500+ active funds with over 7 billion under management. They claim this accounts for "56% of all top tier US VC deals". AngelList essentially created a social networking tool for startup funding. AngelList Stack allows any startup to tap into that ecosystem. You can potentially find your funding partners in platform which is quite the attractive feature.
Clerky and AngelList only offer C Corp formation. Specifically in Delaware. While this is the traditional, and often the best, route for a startup it may not be right for everyone. Stripe on the other hand does have the added support of creating limited liability companies (LLCs). If you're planning to bootstrap your startup an LLC may be an attractive choice. As it stands Stripe is the only one of the three that will give you this flexibility.
In order to use AngelList, at least one founder must be a U.S. resident or have a U.S. taxpayer ID. Clerky doesn't have any such restrictions, but does caution tax implications of such an arrangement. Stripe on the other hand is marketed towards foreign founders. They also get your startup set up with as US bank account and Stripe merchant account to accept payments globally. An attractive feature for an entrepreneur that doesn't have the ease of access to the US banking system that a citizen might.
Each platform offers both unique and similar features. Which of those unique features best suites your startup is dependent on your own unique needs. If you're looking to team up with a lawyer or already have a GC then Clerky's lawyer integration feature may make it the standout platform for you. If you're looking for an all in one automation tool that taps you into a VC treasure trove ecosystem then AngelList is your guy. If you're a foreign founder or are interested in a non C Corp startup then Stripe is the way to go.