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InputSoft Сase Study: Structuring a Company for Techstars Accelerator

February 23, 2022

Highlights

InputSoft required legal support whilst undertaking due diligence required to join the Techstars accelerator program. Legal Nodes assembled a virtual legal department for InputSoft, to help them structure the company and prepare all their legal documents. With help from the Legal Nodes team, InputSoft successfully passed due diligence and in January 2022, secured a place in Techstars 2022 Class of the Torino Cities of the Future Accelerator.

About the company

InputSoft is a SaaS platform for companies in the aviation industry. They create software that helps airports and ground handling companies manage their human and technical resources more efficiently and collect and analyse the data during ground handling operations. They aim to become a global company and serve the needs of airports worldwide.

Challenge: going through Techstars’ due diligence as startup founders

In December 2021, InputSoft successfully passed the vetting process of the Cities of the Future Techstars Accelerator in Turin. The company needed to go through the accelerator's due diligence process as a next step.

It's widespread when the accelerator cannot invest in the startups' legal entity after they've got accepted to the accelerator's program. Accelerators like Techstars have a pretty limited range of jurisdictions that they can invest in.

Here's what InputSoft needed to achieve in order to pass their due diligence hurdles:

  • Have a legal entity that Techstars can invest into and open a bank account
  • Prepare the documents on founders' shares and option pool allocation
  • Prepare the company capitalisation table (cap table)
  • Transfer all the intellectual property to the new company

Solution: partnering with a company that has the experience of accelerator due diligence

At that stage, many founders don't know where to start and how to structure the process.

Lawyers from the Legal Nodes network have already worked with numerous startups that have been accepted to accelerators, including Startup Wise Guys, Techstars, and Y Combinator. We had also gone through this process when we were accepted to Techstars London, so we knew what it was like as founders; very time-consuming when you don't have much time at all.  

When InputSoft's CEO Anastasiia Smyk and CTO Valentyn Zavadskiy approached Legal Nodes, we set about creating a detailed legal roadmap. Our core goal was to ensure InputSoft were successful with their due diligence checks, and we assembled a virtual legal department who started working on the roadmap tasks right away.

Here's how the virtual legal team helped InputSoft:

  • They started the process of registering a Delaware company;
  • Next, they received the certificate of incorporation and began the process of obtaining a Tax ID number;
  • Legal team then opened a bank account and prepared the documents to issue shares to founders
  • Finally, lawyers prepared a cap table and the list of documents to transfer the intellectual property to the new company

It all seems like a straightforward process, and it is. But many founders struggle with these steps because they first try and figure it out on their own, lose precious time and they can also fall foul to simple mistakes; setting up a new company in the wrong region can create implications when opening bank accounts on handling tax matters. These decisions really are best left to the experts.

If a team of experienced lawyers leads this process, you can avoid potential pitfalls and finish the due diligence process quickly.

Anastasiia Smyk, CEO & Co-founder @InputSoft, has said:

"We're glad we've partnered with Legal Nodes to help us with the due diligence. The lawyers from a virtual team acted quickly and were on top of all things that we needed to achieve in the process."

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Nestor Dubnevych, Co-founder @Legal Nodes, has said:

"We are happy to congratulate InputSoft on finishing their Techstars due diligence process and starting the program! Thank you for choosing Legal Nodes and our team as a partner."

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