Slightly more than 10 years ago I was living in Durham, NC working full-time on my startup on Ninth St. right near the edge of Duke’s East Campus. I was actively involved in the fledgling Research Triangle startup scene with the Council for Entrepreneurial Development (CED) as the heart. At the CED I participated in a great program called FastTrack that came from the Kauffman Foundation (side note: one of my goals is to start a Cummings Foundation one day that is similar to the Kauffman Foundation with a focus on entrepreneurship) and through the program I had the chance to meet several entrepreneurs as well as startup-focused service providers in the area.
One of the lawyers that spoke at the program did a great job and was very approachable. After his talk at the class I went up and introduced myself and what we were doing. He said he liked what he heard and that we should get together and talk more. I diligently followed up and we met for an hour to talk about my startup. At the end of that conversation he asked if I had a business plan, so I naturally said yes (that was the thing to do then although I recommend against business plans now). He said if I’d like he take a look at it and give me feedback. Wow, I was thinking, this guy is super helpful.
After our meeting I promptly emailed him the latest version of my business plan hoping to get some great insight from him. Well, two weeks later I received a fax from his assistant where he had taken a printed version of the business plan and handwritten a few number of comments and questions in the columns. Hmm, I thought, that’s an interesting approach to feedback, but I was anxious for any third-party thoughts on what I was doing. I quickly sent a thank you email and commented on his comments.
A week later I received a bill for $500 for his time commenting on the business plan. I was stunned. It wasn’t the $500, although that was a ton of money for a bootstrapped startup that did $15,000 in revenue that year, but rather that he would charge for it without clarifying in advance it was billable hours. It was a good lesson learned early on. My advice: always ask the cost for any services up front and beware of lawyers charging to edit business plans.
What else? Have you had any experiences like this?