Ask The VC got a second opinion on the issue, and it looks like the total costs up to the first round closing tally to around ten grand. Closing may cost you up to ten grand more.
Guy Kawasaki got it done for less than $5K, but didn’t raise venture financing (yet).
Initial structuring is generally pretty “standard,” and I’ve seen it done competently for under $2,500. And that includes any quirks like exchanges of contributed IP for stock, founders vesting, and a base option plan – not from your uncle’s divorce lawyer either. That is the cash price, no deferral – but is well within the credit card advance range for most. You may need a bigger firm come first round – the investors may insist on it – but structure will get tweaked whether you use the same firm thoughout or use a smaller shop upfront and switch to the big guys later.
It looks like you may pay a premium for fee deferral, twice – once in equity and once in deferred fees for going with a top-tier firm from the start (those are the only ones that can really afford to defer fees). And note…using a white-shoed operation is no guarantee your investors aren’t going to ask you to use their lawyer anyway. The question you have to ask yourself is whether the premium is worthy of the contacts that might be had as a result, as well as the cash you’ll conserve at the start. Paul Kedrosky says some need it, some don’t.
I’d go for getting the base put together with someone you know and trust, while sucking up the cash expense. Then, use whatever firm your investors are comfortable with if and when the time comes.