As Promised, Our Second #Legaltech Investment Announcement This Week
As Promised, Our Second #Legaltech Investment Announcement This Week
Here's to a Future of Frictionless Contracting
Earlier this week, I announced an investment in 10BE5, which was covered by ArtificialLawyer, LegalIT Insider and Law360. And, as Steven Lerner noted, I promised another investment announcement later in the week.
So, making good on my promise, I am thrilled to announce that Killer Whale Strategies Legal Disruption Syndicate has invested half a million dollars in TermScout. I’m excited to team up on this investment with my friends Gigi Levy (NFX), James Currier (NFX) and David Stark (GroundUp.vc)
There will be plenty of time in the future to tell you what the Killer Whale Strategies Legal Disruption Syndicate is, how we discovered TermScout and more about our involvement in this round. But, today, I want to focus on just three reasons why we’re in LOVE with TermScout.
Frictionless Contracting It takes too damn long to sign even the simplest contracts. This is not only a local problem for individual companies, it is a problem for the economy as a whole. TermScout cofounder and Chief Strategy Officer quantified that number here in Legal Evolution The cost of contract complexity (228) | Legal Evolution (which is, incidentally, how we learned about TermScout). TermScout has boiled that problem down to a lack of transparency about what is and isn’t a market standard contract. By bringing transparency into the marketplace, TermScout has the opportunity to fundamentally change how we negotiate contracts. In the future, lawyers will not need to haggle about what is or is not "market," they will simply run the contract through TermScout. I’m not alone in this prediction. Richard Tromans (and others) have come to this same conclusion:
If you are headed to CLOC next week, make sure to set up a meeting with the TermSout team, and let them show you the future of frictionless contracting. Reach out to me if you need me to make that happen.
Term Scout is NOT a CLM I’ve gotten this question from several journalists, so let me make it clear. Term Scout is NOT as an end-to-end CLM tech solution, a term that Gravity Stack’s Bryon Bratcher and I defined in this article on Legal Evolution Because Everyone Else Cares: Why legal should be paying attention to contracts (256) | Legal Evolution. In fact, several legal departments with an end-to-end CLM tech solution also use TermScout. I was surprised to learn that there are even companies that use an ML based contract review and redlining tool, but STILL feel the need to make TermScout the first line of defense in their contract workflow.
I love that TermScout is NOT a CLM. What others call “CLM” is, indeed, a crowded space and I’m not sure how to pick a winner. And, while the funding and valuations of end-to-end CLM tech solutions are through the roof, there are countless reports, especially inside big enterprises of endless, painful implementations and low user adoption. Too often, only party that wins is the consulting firm that does the implementation. iCertis is being sued right now for a CLM-gone-wrong, but several legal departments I’ve spoken with report similar experiences with other competing products.
TermScout, by contrast, can be up and running, creating high impact in weeks if not days. A multi-department pilot headed up by the tireless Connie Brenton (her company NetApp is a TermScout user) showed that TermScout could prevent 74% of agreements from ever reaching a human, either because it could be signed as is or negotiated through automation.
Dynamic, Laser Focused Team We identified TermScout (and by “we” I mean my partner Avshie) as a potential game changer before ever meeting the team. But, wow, what a dynamic founding team. Founders Otto Hanson and Bill Mooz, and VP of Operations Dawn Kubat all have extensive relevant legal experience. It’s hard to believe that Otto was ever an attorney because he is such a natural entrepreneur. Something that really stuck out to me is that both Otto and Bill had been power users of other legaltech and were able to identify and clearly articulate why these tools didn’t actually help get their job done. CTO Evan Harris rounds out the team nicely having worked previously at unicorn startup Ibotta where he was Manager, Machine Learning Engineering. We see irreplaceable value to having someone in management who has been there and seen a company scale rapidly from the inside. The team has only gotten better with valuable hires like Thomson Reuters veteran Carlos Gamez.
Here is some coverage of TermScout’s investment in the press:
Artificial Lawyer TermScout: $5m Funding + Carlos Gamez Hire – Plus AL TV Walk Through – Artificial Lawyer
Legaltech News Contract Review Startup TermScout Raises $5 Million in Seed Funding | Legaltech News (law.com)