Despite all the talk in the legal world about forms, and there is a lot of it, and despite the great success of the NVCA Series A documents project originally inspired by Sarah Reed, it took Fred Wilson’s recent blog post to create some interesting back and forth commentary on seed forms.

Good forms are a wonderful thing. They can save tons of time and cost – each of which is in short supply for early stage entrepreneurs. Now, not every shoe fits every foot, and sometimes work is needed and is appropriate.

At the risk of stating the obvious, if you are raising $400,000 (let alone a smaller amount) and you spend $20K on your counsel and $20K on investor’s counsel, you’ve blown 10% of your money right there. (Remember, you are also giving away a pile of equity to get that money in the door.) This is really expensive capital. Creativity and clever negotiating have a price.

Having said all that, I think it was T.S. Eliot who said with respect to literary criticism that "The only method is to be very intelligent." At some level, the same applies to your legal dealings. Forms are great, but they must be used thoughtfully.