Summary:

In this engaging episode of "In The Bunker," we welcome Matthew Lopez, a fractional startup General Counsel. Matthew brings unique insights into helping early-stage startups navigate legal complexities, with a focus on avoiding legal pitfalls, fundraising, and scaling. He shares his experience in offering diverse payment structures for his services and his approach to working with investors and startups from a legal and financial standpoint.

Our episode highlights:

• Matthew's innovative approach to providing general counsel services fractionally.
• Challenges faced in raising funds and scaling startups, with specific legal perspectives.
• Practical advice for startups on finding advisors and asking for help.
• Matthew's unique methodology in helping startups set up legal structures and make informed decisions.

Bio:

Matthew Lopez specializes in assisting early-stage startups as a fractional General Counsel. He adopts a venture capital approach to his practice, understanding the constraints startups face in affording quality legal assistance. With a background in both law and accounting, Matthew has a comprehensive understanding of the legal and financial challenges startups encounter. He offers various payment options, including equity and monetary compensation, aligning his services with the needs of startups.

Links:

• LinkedIn: https://www.linkedin.com/in/matthewtlopez/

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Welcome back to in the bunker.

Every business owner has faced challenges and we love to share those stories.

Today.

We have Matthew Lopez in the bunker with us.

Matthew helps early stage startups avoid legal issues by providing them general

counsel, but he does it fractionally.

And he's going to explain a little bit that in a minute, there's so

much to learn from this conversation.

I'm super excited to jump in, welcome to the show.

And it's great to be here, looking forward to having this

conversation.

Awesome.

Let's get to know you a little bit.

Let's get that 92nd background.

Who are you?

How'd you get here?

What do you do?

Technical issues.

I love it.

Sorry about that.

Every time someone calls me, it cuts off my your headset, and it's

the most annoying thing it's yeah.

I love it.

My name is Matthew Lopez.

I'm a fractional general counsel.

And what that kind of it looks like is I work with lots of different

startups as their general counsel and I work part-time for them, but it's

being able to be this in-house role with being this outside position.

So what I do is I have a lot of.

And we have different attorneys at different levels paralegals.

And so what we do is we create a fractional legal department for

businesses at all different sizes.

So depending if you're a startup to a midsize company or whatever, we plug in

the resources that you need, and then you get to use it as much or as little.

As you really need.

And so as the general counsel, I go in there, I organize it all.

And I make sure that you have one point of contact to be able

to utilize all these services.

And then for other companies that may already have a general counsel, we

actually just plug in the legal department and then they have the ability to

use as much or as little as they want without without having a GC in place.

Got it.

So the nice part about the fractional aspect and for those who are

listening like this, isn't just for an attorney who is general

counsel with inside the business.

This is also for maybe it's a CMO or a CFO, or, all those different

types of roles where you want to flush out a a more leadership.

Docket, but you don't necessarily have the financial ability to go out

and just hire eight different C-level executives at their full salary.

This allows you to not only hire someone at a considerably less rate than a full

salary for a general counsel, but it also gives the aspect of you're not just

hiring, they're not just hiring just you.

Part-time they're hiring you and your full team part-time, which

is pretty cool.

Yeah.

It's pretty nice because a lot of the times most businesses

don't need a full-time GC.

They don't have enough work to demand that because the reality is

the GC is a very high level person.

They should only be reviewing a certain amount of stuff.

It's more about strategy.

Whereas paralegals, senior attorneys and associates.

I can handle a lot of the grunt work at a lower price point for the

business, but hiring all of these different people to create a law

firm or to create a legal department in a business just doesn't work.

And it's the same thing for CFOs and CMOs.

A lot of the people that I work with have these exact same kind of structures where

you can plug and play a whole department.

And you only utilize what you want.

And so it's a much better model to be able to get that high-level experience

that you just wouldn't be able to afford if you went out onto the market.

Yeah.

Yeah.

Which is really cool.

And then allows the business to grow over time.

And like you said, maybe.

Down the road as that company does grow, they do hire, maybe a general counsel

or someone internal, which is fine.

And then after that, company has hired the general counsel.

Then you guys are still there to support, to be back office,

to do some more of that stuff.

As that company continues to grow, to flush out, potentially having a

full legal department, if they're able to pay for that as needed.

And the love of the times we encouraged, like a lot of the

times these companies want to hire the actual one of the people that's working

on their cake, like on their business.

So they usually will find that they'll take the senior associate

and that's their first legal.

So because they know the business, they know everything about it, and

they're comfortable with that person or they're like, and so it's a really nice

transition for them and we encourage it.

It's one of those things where we help find talent for our clients.

And we're constantly hiring people to replace those people, train them and get

them into the, because it's about, we're encouraging our people to grow internally

and then go find the right opportunity.

That's really interesting, super backwards from

a typical contractor agreement.

Normally there's a, you can't hire anybody on our team for, 12 months

after our agreement ends or something like that, where you guys are literally

doing the opposite where you're like, Hey, as you guys grow, we encourage

you to take the employee that's on our team and hire them internal.

as You guys grow and obviously there's some placement fees

and stuff associated, but yeah.

Exactly.

And that's one of those things is like, it's one of those things.

Like we helped find these people for you.

We help develop them.

So there's an, it cost for extracting them from our team.

But it also, then that cost goes into us being able to replace that

person and being able to train the next generation of attorney for it

because it's one of those things.

A lot of our companies really.

That we're very business-minded.

We are not a, we're not like a lot of lawyers that are, in-house getting

a bad reputation of being the know.

And we very much don't say, no, we say, here's your what is it that

you're actually trying to solve for?

Okay.

The way that you're going about that, isn't the appropriate way.

Most likely here's a couple other options.

Pros and cons of each one of these, you get to pick what

you want, which one you want.

And if you want to sink your company, by all means, go for it.

It's not my problem.

bUt it's one of those things where we have a very different approach

to being your partner and being a business, like being a part of their

business, rather than being this outside service that you're utilizing.

We want to.

In house as much as we can without you having to pay the cost of employee.

And that's that's why a lot of companies really like our model and we are

swamped with new clients every month,

not a bad problem to have.

I will say.

So many times, like we deal with attorneys like clients, attorneys,

as we're sending a contract to sign.

And the client's attorney wants us to put a stipulation that, as a digital agency,

the website's going to be online 24, 7, 365, a hundred percent guaranteed up time.

And I was like, have you ever used the internet before?

Yeah.

And just that hap aspect, I feel like sometimes there's attorneys

that are out there, that they have so much of a CYA policy that there's

no way you could get business done.

And there's no way where what you guys are explaining is the aspect of you still

got to give business time, but what's the, how can we make sure we're not going

to get in trouble instantly prophet.

Exactly like that's at the end of the day, it's okay, this

deal is going to get done one way or the other, how can I best protect my client?

How can I make the pie bigger for everyone?

Because a lot of the times, most attorneys they'll send red lines

back and forth and nothing gets done.

It takes weeks to get contracts done.

My policy is that I send out a contract for one of my clients,

or I receive a contract I red line and I'm like, Hey, let's jump on a

phone call to discuss because now we have now we have an understanding.

What we need to discuss and how we can resolve, let's get on the phone so we

can resolve these issues and find some way for our two companies to do business

because they want to do business.

My job is not to stop them from doing business it's to help them.

And it's yeah, a lot of people, a lot of attorneys don't see it that way.

Yeah,

frustrating.

Very it is.

And that's especially when I come into a new business, like right

now, I'm actually having this problem with one of my clients.

I redline line these agreements and I don't get, they're not including me on

the emails before I get the red line.

So I have no contacts.

Then they take my red line and they send it out without, including me.

So I have no ability, like I'm just sitting there in the ether

and eventually I was like, no, this is not going to happen.

And after it happened like twice.

I am not going to gum up your thing.

I actually saw make these problems go away much quicker if there is issue, because

I know how to handle this properly.

And so right now we're having that meeting to and like over

email, he's yeah, you're right.

We probably, we need to do this.

Let's get on a phone call and discuss how we want to implement this.

A lot of, there's a lot of hesitancy to include attorneys in negotiations a lot

of the time, because we muck shit up and it's no you shouldn't be mucking it up.

You should be helping clarify and be able to protect the client.

And the, sometimes it's about having a mutuality of closets and having really

fair agreements that go both legs.

Yeah,

that's true.

anD that's where I feel like so many businesses.

And, or, just business owners in general, any time that they don't understand

something, it's I don't understand it.

I don't want to deal with it, and it's that aspect of, just not

wanting to touch it because it's something that's not understood.

And that's where I think oftentimes sadly, there's a lot of attorneys.

Don't make it easier to understand.

And I've seen websites where their terms and conditions is 12 pages

long, and you can't understand it.

Then I've seen other websites where it's a two column in the left column, has all

the legal speak at the right column as the English interpretation of, or whatever.

And it's oh, okay.

At least we're trying to make this accessible to the general public.

And that's good.

It's just, it's crazy.

As you're working with these businesses and chatting through, just these issues

and helping them, in that early stage of startup, what are some of those

challenges that you help them overcome?

So the issues that they are facing.

Yeah, there's a lot of different issues that startups deal with.

I think one of the biggest things is how do you set up the corporation, like the

business and what are the implications of kind of an LLC versus a corporation.

And that's a big decision that a lot of business owners need to understand,

and it's not just a legal decision.

It's also a tax decision.

And if you don't have.

If you don't have the right people talking, you can get

mixed messages from people.

And then it's like a business owner doesn't know how to interpret both

sides because both sides are speaking different languages and don't

know how to understand each other.

And so the real key is having someone that you can advise you on that understands

the whole gambit of stuff, not just legal, not just tax and business.

And you need to have that congruency because it's everything.

And so a lot of the times that's one of the big things that I help with is

because I have a masters in accounting.

I have RA I raised, I ran a startup and I raised money on that startup.

Like it's a very different beast to be able to then advise someone

on all of these and be able to listen to all the professionals.

So that's one of the major areas.

And then the other one is for founders is if there's more than one.

guEss what, something's going to go wrong between your relationship at

some point, and or someone going to want an exit or who knows what it is.

So you need to be able to, you need to prepare for those things, because

I had one startup where the founders had known each other for years.

They're their best friends.

One guy had a mental breakdown during the startup because he was working too much

and was sidelined for two or three months.

And because of their, the way they set it up before I got

in, they couldn't do anything.

The other founder literally couldn't sign anything so hired both of

their decisions because they were both 50, 50 pack partners.

Jeez.

So for three months, we were trying to figure out how to

deal with this situation.

And then after he got out of it, the guy was still a little loopy.

And so we had to exit him from the startup and separate the company.

And so if they had done good agreements at the beginning,

this would have solved this.

And it's one of those things where you don't ever think

of that's going to happen.

Oh, that's not going to be me and my co-founder known each other for 10 years.

We've been childhood friends.

When there's money involved and there's decisions and there's emotions, all of

these things come into play, stuff goes wrong and you have to be able to have that

understanding of who makes the decisions.

Who's the tiebreaker.

And in a decision or who is going to if it's a financial decision who makes it,

if it's a legal decision who makes the tie it, like you can break it all up.

There's lots of cool ways that you can do it.

Or maybe it's just flip a coin.

And I've seen that done before and it's random.

I'm like, okay, that's what you want.

Cool.

But you never know what how you want it.

You need to put.

Process in place

for it.

Yeah.

And that's the key to anything, really?

Any business decision, if there's a process or some sort of analysis that's

been done, if everybody agrees on the process and whatever the outcome is,

Resulting in the company filing for bankruptcy or closing or whatever the

process like if the process was agreed upon and everybody in the decision-making

aspect is like yeah, we followed the process and that's what we all said to do.

And yeah, everything went belly up.

So there's less of a.

For lack of a better explanation, but hurt feelings and emotions.

And there's a little bit less of that.

I've been a part of a startup weekend and man in three days, it's insane.

The amount of ideas they can come out and stuff that happens.

And, these are just conceptual elements that don't typically

end up going anywhere.

Now, granted, there are companies and products and apps and websites

that have all come out of a startup weekends that are incredible.

And, but 90, over 90% of the ideas that go into a startup weekend never go anywhere.

But still even concept ideas and seeing.

hUrt people get over, oh, this person changed my idea to do this instead.

And it's.

Yeah, most people want to think that they're extremely logical

when it, the reality is we're extremely emotional creatures and it's one of those

things where you have to take that in consideration when you're doing all of

these things and having the emotional intelligence to be able to put the

process in one of my favorite books is the five dysfunctions of a team.

And it lays out how you get buy-in from people.

And the team, and that's really what it comes down to when you're

making these decisions is you just need to be able to allow people to

express their minds and then make the decision, make sure that they're heard.

Yeah, for sure.

Yeah.

And that's, what's hard in a situation like you were mentioning

earlier where, the co-founder was on the sideline for a few months.

It's hard because even if decisions were made during that time, unless they're.

Process or an element in place that says what to do in that situation.

wHen that person does come back, it's hard because what, what decisions may have been

made may not have been those, the ones they wanted or, there's all those aspects.

But at the same point, if you're.

Starting a company that has employees and has investors

and has all that type of stuff.

Like you have to, you can't just park on the side of the road for three months.

Like you got to keep moving for you're going to burn through your cash.

You're going to, gonna end up having to shut it all down.

Yeah, it's crazy.

Cool.

No, and it's one of those things where, oh, go ahead.

No, I was just going to lead into maybe another topic.

Yeah.

Go for it.

Go for it.

That was going to transition as well.

I think one of the more important things that a lot of

founders are always asking questions from me is about fundraising.

And it's one of those, it's an extremely complicated area.

There's so many laws about it and.

There's certain ways that you do things and there's founder-friendly

ways and there's investor friendly ways to do stuff.

And I've seen like companies get forced into different buckets based on it.

And it's one of those things where if you don't have a clear plan of how

to raise money or know that process, your first time, you're going to

mess it up because it's not just business, it's legal, it's accounting.

It's everything that goes into that process.

So you mean to tell me there's laws about buying

people, giving companies $10 million and there's things you should do.

Imagine that

I know like the sec and the IRS might want to know about you

doing all of the, to handling all of this.

Yeah, just

maybe.

And if there's, the business, if the business makes money, they're

probably going to want that report.

And I guess as well nowadays

it's a crazy world.

The government's asking for all of these things.

I don't know.

Yeah,

no.

And I will say, I've been in business about 15 years now and.

Looking at some of the paperwork that has to be done now versus

even 10 years ago, it's insane.

Just the amount of more and more paperwork and more filings and more stuff and more

annual reports that have be submitted.

And it's crazy.

And I can't even imagine, when you get into the realm

of a startup, that's doing a.

a Campaign for 5 million, 10 million, $50 million, there's definitely some

legal aspects, some federal compliance and then the whole aspect of, okay, cool.

What happens if everything falls apart and the money goes away, like who's liable,

who's responsible for that, is it back on the co-founder now the co-founder.

Oh, those are the founders owed that investor $10 million.

That's going to be a lifetime to repay.

Yeah.

And generally no investor, thankfully is looking for that because they

know that these guys are broke.

That's why they're looking for money.

So it's thankfully we very rarely have that as an issue come up, but it's more

of putting together all the pieces.

To be able to find the right investors to get in front of them.

Because I was talking to a lot of my investor friends and one of the

firms that I work with, they did an analysis on who they've actually fund.

And the stat was about 85 to 90% of their deployed assets went to warm introduction.

So if you had just sent a cold pitch deck into their venture fund, guess what?

You have a 10 to 15% chance of getting funded, where as if someone that can make,

just to be like a nice little intro and be like, Hey, I know like this is a really

cool company astronomically, better on.

aNd I know I, the startup weekend, that was a part of, we had a.

A concept for an app that would allow you to basically invite five or six people

to an event, it would connect everybody's calendars through Cal or Google or

whatever, and then find available times then there's systems out there.

Now that do this we had this concept and idea 10 years ago.

Never did anything with it.

Never went anywhere at the time, trying to get.

Like iPhone calendar and Android calendar to work together was a

nightmare mess.

Yeah.

And so we actually sat down with a venture capital fund firm, and one of

their biggest things was, the developer who was playing with some concepts

with it He's we don't know if we're going to go with this platform or that

platform, the venture capitalist company, the guys were like, we don't care.

You're like give us concept because we don't care what it's built on.

If, if we invest a hundred million dollars into this.

yOu guys can rebuild it six months from now.

We just want to see it work.

We want to see things, we want to see the potential it has.

And so that's where, you get company people who walk into like shows

like shark tank and they're like, I've got this million dollar idea.

It's okay, cool.

What's the product.

It's you don't have a prototype.

You don't have anything.

Great.

You're not getting a dime

as.

As I say, I talk to people all the time that have million billion

dollar ideas and fantastic.

My big thing is, do you have the team that can execute this?

And most of the time it's no, it's just me.

I have this idea.

I'm trying to find people like Oh, come back to me when have

that team, because otherwise you have an idea it's worth 5 cents.

That's what anyone's going to pay you for it.

Yeah.

Yeah.

We get projects every now and then we're companies

an execute.

Yeah.

Yeah.

We get projects every now and then where companies are super concerned that we're

going to steal their idea and run with it.

And I was like, yeah, it's going to cost $100,000 to build that.

I'm not going to take my team off of paid work for the next, six to 12 months

to focus on building this project.

Then I'm going to have to dump another hundred thousand dollars into marketing

or more to maybe make my money by.

Three to five years down the road.

I'm like, eh, no, thank you.

I don't want it.

I don't want that.

Yeah.

As about to say I advise my startups, like you can

talk about the generics of your idea.

Like pretty much everyone, except someone that is a competitor.

Don't go tell your competitors what you're doing, but pretty much everyone

else is not going to steal your idea.

They have more important things to do, nor do they have the

expertise to execute on it.

So who cares?

Yeah.

Like the basic idea of your thing is not confidential.

It's not like I had these south companies always get me.

I'm like, okay.

Unless you're like, there are certain circumstances where it

makes sense, but most of it's Nope, no, one's going to steal that.

No, one's going to do anything about that.

And no, one's going to even know about it.

One of the, one of the Lawyers that I work with on a regular basis.

He works with a satellite company and I was, I got approached

by this manufacturer, like a satellite manufacturer.

They manufacture this piece and they're a startup and they're, they've

done prototypes and all this stuff.

And I thought it would be a great connection because I thought the satellite

company might want to invest in it.

They'd never even heard of this company.

And they're like, this is perfect.

Like we want to invest and all of this stuff.

And it's like most companies that are even in your space have never even heard of

some of these startups, because it's just, they're too busy doing their own thing.

Nope.

Yup.

Yeah.

Yeah.

And that's just, it's crazy when you look at all the startups and oftentimes

there isn't necessarily a unique idea.

Maybe a unique execution of the idea or a unique marketing elements.

We look at things like, Uber and Lyft and all the competition in that market.

And you look at food delivery apps and you look at, at the end of

the day, it's, they're all similar smalls, all very similar set up.

It's just different execution and who marketed it better.

And, there's some different elements to me learning like customer service.

That's a huge element.

You've got crappy customer service.

You're not lasting long.

Yeah.

Awesome.

As we wrap up, what is your sort of biggest advice your big

piece that you would give as a takeaway for someone who is.

Maybe in the startup stage or a small business who is facing the challenge of

what do I do from a legal perspective?

Whether that is they're looking to file for an LLC or they're looking to

figure out, legal setup or they just have no clue what the heck they should.

If it's time to reach out to an attorney and a lot of

attorneys will give you at least a little bit of face time and kind of

point you in the right direction.

At least for me, there's a lot of startups that approached me and they

asked me for help and they want me to, they want me to come on board

and it's no, you guys are too early.

I will point you in the right direction and kind of.

Talk you through some of this stuff and maybe do a monthly meeting with you.

And that's kinda, you want to start finding advisors and that

applies to all of the areas.

Your Rolodex is your most important asset that you own as a business entrepreneur.

And so being able to just go talk to people, don't be afraid to start

a conversation or ask people for help experts, love giving help.

That's why they do what they do.

And so just ask for help is the best thing you can do.

I think as you're in that spot.

Yeah, that's good.

That's good.

Yeah.

It's.

One of the things I would say not to do that I did when I started

my business was I used what the attorney, who I hired to fix it all.

He called it legal doom legals, and

do not use that.

Yeah.

It cost me more money to fix all of my filing than it did

than it would have to do it.

The first time.

yeAh.

And I know a business

owner, correct.

I know a

business owner who did something online service similar, and they

messed up the filing and they went back to them and said, Hey, can you fix this?

And the company was gone like, and so it was just like fly by night disappeared.

Finding the right attorney, who's going to do the due diligence.

Do some research if you're filing an LLC to make sure that there is

no the business, I just mentioned that there was actually a another

company under a similar name and the company sent them a cease and desist.

They need to change their name because they're operating in the

same space and all that mess.

And finding an attorney, who's going to be there for the long haul, the business.

Not just someone who's going to give you advice once and leave, as you

were saying, finding an advisor who may be, you can have a monthly or

quarterly or annual meeting with, even an hour of an attorney's time, once a

year, once a quarter is so beneficial just to, get the basic aspect.

So we're good and avoid legal zone.

And I don't want to bash, I don't use legal zoom, but there are good.

I was going to say legal sites out there.

Yeah, there are for sure.

Like right now, a lot of the times when I have companies that want

to do LLC filings or C corporation filings, I don't want to do it.

It's going to cost them too much money for me to touch it.

They're really good websites out there that.

But you have to know which ones to go to like legal zoom is not one of

them they're not built for doing that.

It's you have to know exactly what you're doing in order to use it.

And it's not a, it's not a friendly service.

The challenge that I had with legal zoom specifically was

the fact that you get this page and says, do you want option a or option B?

I don't know what the heck the difference is.

And then you get a one sentence description.

B Gas.

Sure.

And what you really need is you need to hop on a call with someone, even if

it's for 15 minutes to 30 minutes and explain your business, what the legal

entity that you want to set up, are you planning on having a thousand employees

or one, walk through some of those things?

And what the next five years, the business looks like, because what you

don't want to do is file as an LLC and then 12 months later, change it to an

S-corp and then 12 months later, change it to that just gets to be a mess.

Yeah, but there are reason, like I have advised startups to do LLCs,

to turn into as corporations, but you have to understand why you're doing it.

And that's really where it comes down to.

I you're completely right.

Is go talk to an attorney for just at least 30 minutes, let them understand your

business and then advise you on how to do.

Then you can go do it yourself with the different resources, because

there's great resources out there.

You don't need to have the attorney actually do all of the filing, unless

it's a complicated business structure, but when it just comes to this basic

stuff, like there's great stuff, but you need to know exactly what.

Yeah.

Awesome.

For those who may want to reach out to you, I do have your LinkedIn or

include that in the show notes below.

That's probably, is there other another great spot to

connect with you or that's it

thAt's a great spot.

Like we're a referral only.

We don't do any marketing where a boutique law firm that handles this space.

Awesome.

So if you're an early stage startup looking for a general counsel or

a fractional general counsel yeah.

Reach out.

Sounds like you guys.

I know at the beginning of the show or pre show, I think it was, we were

actually chatting and you guys were pretty busy right now, which is good.

It's good to hear.

Yeah.

Where we're swamped.

We're taking on a new client pretty much every week.

We're hiring extensively.

And if anyone's an attorney that's watching this feel free to reach out if

you're a corporate attorney or hiring.

But yeah we work with all different sizes of businesses, so just not startups, but

anyone that's mid-sized will we help and work with, so it's a really cool space.

Awesome.

Perfect.

I appreciate having you on the show.

And for those who want to reach out, like I said, LinkedIn, a

URL will be in the show notes.

Awesome.

So thanks for being on, appreciate the time.

Thanks for listening to this episode of, in the bunker.

As always we can be found on Instagram, Facebook, and Twitter

at, in the bunker podcast.

Be sure to share this episode and what you're going to apply from it.

And how that can affect your business, make sure to tag us in that post so

we can highlight your journey as well.

But before you go.

I have a quick personal ask.