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Skala Legal Skills

Legal Disclaimer

This skill is provided for informational and educational purposes only and does not constitute legal advice. The analysis and information provided should not be relied upon as a substitute for consultation with a qualified attorney. No attorney-client relationship is created by using this skill. Laws and regulations vary by jurisdiction and change over time. Always consult with a licensed attorney in your jurisdiction for advice on specific legal matters. The creators and publishers of this skill disclaim any liability for actions taken or not taken based on the information provided.

Startup Due Diligence Skill

Overview

Conduct legal due diligence on early-stage US startups (Seed/Series A). This skill supports:

Investors

Identify risks before investing

Founders

Prepare for diligence, fix issues proactively

Workflow

Step 1: Intake

Collect context before proceeding:

1. Perspective: Investor or Founder?

2. Stage: Pre-seed / Seed / Series A

3. Scope: Full DD or specific area (Corporate, Cap Table, IP, etc.)

4. Company basics: Name, State, Entity type, Industry

Step 2: Document Collection

Based on scope, request documents by category. See

references/checklists/

for complete lists:

Category

Reference File

Corporate & Formation

references/checklists/corporate.md

Cap Table & Securities

references/checklists/cap-table.md

Intellectual Property

references/checklists/ip.md

Employment & Founders

references/checklists/employment.md

Material Contracts

references/checklists/contracts.md

Compliance & Regulatory

references/checklists/compliance.md

Litigation

references/checklists/litigation.md

Financial

references/checklists/financials.md

Step 3: Document Review

For each document received:

Identify document type and category

Check against category-specific criteria

Flag issues using severity ratings (see below)

Cross-reference with other documents for consistency

Severity Ratings:

🔴

CRITICAL

Deal blocker, must resolve before closing

🟠

MATERIAL

Significant risk, requires remediation plan

🟡

MINOR

Should be fixed, but not blocking

See

references/red-flags/common-issues.md

for comprehensive issue patterns.

Step 4: Issue Analysis

For identified issues, provide:

Description

What the issue is

Risk

Why it matters

Remediation

How to fix it

Timeline

Estimated effort to resolve

Escalation

Whether legal counsel required Step 5: Report Generation Generate deliverables using templates in assets/templates/ . CRITICAL: Template Usage Protocol NEVER directly edit template .docx files. Always use the deterministic script:

1. Collect data into JSON

cat

data.json << 'EOF' { "COMPANY_NAME": "Acme Inc.", "REPORT_DATE": "2024-01-15", ... } EOF

2. Validate data

python scripts/validate_data.py diligence-report data.json

3. Populate template (deterministic - only fills {{PLACEHOLDERS}})

python scripts/populate_template.py assets/templates/diligence-report.docx data.json output.docx

This ensures template text is NEVER modified - only placeholders are filled.

Guidance Documents

Load these as needed based on the issues encountered:

Topic

Reference

SAFE notes & convertibles

references/guidance/safe-notes.md

Delaware C-Corp specifics

references/guidance/delaware-corp.md

Stock options & 409A

references/guidance/409a-options.md

Founder equity & vesting

references/guidance/founder-equity.md

Quick Reference: Common Red Flags

Corporate

Missing board/stockholder consents for key actions

Charter not filed or not current

No bylaws or outdated bylaws

Cap Table

Discrepancies between cap table and stock ledger

Options granted without 409A valuation

SAFE/note terms not modeled in pro forma

IP

No IP assignment from founders (pre-incorporation work)

Missing PIIA from contractors who built product

Open source license violations

Employment

Founder shares not vesting (or fully vested day 1)

Key employees without offer letters/agreements

Misclassified contractors

Compliance

No securities filings (Form D, Blue Sky)

Missing 83(b) elections for early exercises

Output Formats

Summary Table

Quick overview of findings by category

Detailed Report

Full analysis with recommendations (DOCX)

Issue Tracker

Spreadsheet format for tracking remediation

Document Request List

Customized checklist for target company Disclaimers This is diligence assistance, not legal advice All findings should be reviewed by qualified legal counsel Escalate securities, tax, and regulatory matters to specialists Document review is point-in-time; circumstances may change