Legaltech providing a lifeline for startups in Asia Pacific
One of the biggest hurdles for most startups is ensuring all their legal processes and applications can be completed with minimal hassle and disruption. To ensure they do not make any mistakes, many startups spend a hefty sum on lawyers and accountants to sort these processes.
As such, to help startups deal with these complexities, legaltech platforms are enabling them to automate these requirements. Not only does this dramatically cut down the time and expense companies use, but it also enables them an array of innovative agile funding services to help startup founders raise funds and such.
Emerging first as software and solutions for lawyers, legaltech automated databases, and contract management tools. 73% of general counsels and lawyers for companies in the Asia Pacific region who have adopted legaltech indicated that they would like to step up their use of technology while 33% believe legaltech will greatly disrupt the legal profession in the next five years.
While in-house use is still the focus within most of the legaltech sector, a lawtech sub-industry focused on legal solutions for the end client instead of lawyers is starting to emerge, and this is also where SeedLegals, a legaltech platform sits.
It is also important to note that legaltech will not be replacing lawyers or qualified legal counsel soon. The upside of technology is the ability to streamline the creation of legally-compliant documents very quickly and automate the process for standard documentation wherever possible and still bring in the expertise of human lawyers for complex matters.
A new hope for startups
According to Hsiang Low, Head of Asia Pacific for SeedLegals, the startup ecosystem in this part of the world is growing at a rapid pace, and startup founders are finding themselves in a competitive landscape faced with multiple challenges such as keeping up with local regulations, finding investors, raising funds, scaling and growing the business, all on top of the challenge of running a business with a bootstrapped team.
Low believes this is where technology comes into play, especially when it comes to enabling automated solutions to problems that founders face to accelerate their company’s growth, keep them compliant and ensure they’ve got the bandwidth to focus on what really matters.
He added that much of these processes come with the need to manage legal documents and agreements. This includes almost everything from employment contracts, share option schemes, intellectual property protection, non-disclosure agreements, and non-compete clauses.
“Unfortunately, not every startup founder possesses the legal background, expertise, or time to understand these legal documents and contracts they need. SeedLegals was designed to make legal services accessible to founders while empowering them to understand their legals and help them make informed decisions,” commented Low.
At the same time, startups need to look for methods in fundraising, something which the legaltech platform can help with it as well. For Low, when it comes to fundraising, it is commonplace in the region for founders to just go along with whatever documents their investors provide.
“While this can make things quicker, it can lead to founders winding up with deals that aren’t always in their best commercial interests or having agreed to deal terms crafted in legalese that they don’t necessarily understand. That’s why we focus so much on educating and empowering founders and why everything on-platform is written in plain English.
While startups can approach a law firm for this assistance, legaltech platforms can serve as a cost-effective and efficient alternative, especially for those in the early-stage market who may struggle with lawyer fees that are billed by the hour. Legaltech platforms can provide expert commercial guidance on everything from explaining key deal terms to understanding the impact of business decisions being made, at no additional cost,” added Low.
With legaltech platforms, founders and SMEs spend a fraction of a traditional law firm’s cost by using automation and customization technology to create legally-compliant employment agreements that meet the standards of local laws while also protecting IPs.
Interestingly, Low also highlighted that compliance can be tricky to navigate when it comes to helping startups. As most early-stage startups do not have dedicated legal resources, some legal challenges will always benefit from human intervention. In fact, many of the legal needs of early-stage startups have made more sense to be handled by automation, thereby aiding significant cost savings.
“But what truly makes SeedLegals unique is that every user has access to unlimited support from our team of experts. The SeedLegals platform doesn’t allow users to do anything that isn’t local-law compliant. The platform is completely data-driven and the simple workflows guide you through each step – while there’s a lot of flexibility in what startups can do on-platform, we’ve made it so that every action is not only a complaint but also commercially sensible,” said Low.
Legaltech in the Asia Pacific
As a tech-enabled platform that automates the legal early-stage startups and small businesses need, SeedLegals brings reliability, transparency, and efficiency to the daunting legal aspect of running a business. The platform enables users to create startup contracts and agreements. Fully tech-enabled, the platform directly integrates digital tools, such as e-signing, dataroom, and cap table management.
Apart from that, the platform also helps startups by empowering them to do better deals for fundraising. Today, fundraising can make or break for startups, and often the time and complexity related to drafting deal documents and going through negotiations can work against founders’ ability to take in investment when the time is right.
In fact, the Asia-Pacific region sees startups raising more investment than ever before, with some estimates suggesting the startup ecosystem could be worth US$1 trillion by 2025. For Low, the region is important for them and Southeast Asia’s booming startup ecosystem, in particular, is a key focus.
“With border openings on the horizon for most countries, the momentum will only increase over the next few months, and we want to cement our spot in the region’s startup ecosystem growth story. SeedLegals intends to make a significant contribution to the growth of the region’s startup ecosystem by investing in relationships with a range of partners from accelerators and incubators to corporate service providers through to professional services firms to build a connected ecosystem of support for the startup community, with a lot of emphasis on joint education efforts,” mentioned Low.
The legaltech platform has also partnered with leading digital payments network Mastercard, to bring its integrated legal solution to startups and SMEs in Singapore through the Mastercard’s Priceless Specials program. It recently reached a significant funding milestone and closed over US$1.25 billion in investments for its portfolio of startup customers.
Currently, SeedLegals is focused on the Singapore and Hong Kong markets, specifically servicing startups and small businesses that are registered in each of those jurisdictions.
“Because of the way investment is done in the region, this means we’re working with founders and entrepreneurs all over Asia-Pacific. Our goal is to redesign the startup ecosystem to be more agile, streamlined, and transparent,” concluded Low.