Setting up a sound legal foundation could be what saves a startup down the line. A missing founder vesting agreement, an unclear IP agreement, or a messy cap table can derail fundraising, spark co-founder disputes, or even kill an otherwise promising company before it has a chance to scale.
In this episode of Build Mode, host Isabelle Johannessen sits down with Kristina Subbotina, founder and CEO of Lexsy and former startup attorney at Cooley, to break down the legal fundamentals every founder needs to get right. Kristina shares the four nonnegotiable legal decisions every startup should make from day one, what investors actually look for during due diligence, how founders should think about negotiating control versus valuation, and why leverage is the key to getting better fundraising terms. She also shares real stories from the front lines of startup law, from co-founder breakups and investor negotiations to a founder who tried using ChatGPT to draft a merger agreement.
They get into:
- The four legal mistakes that can make a startup unfundable.
- How founder vesting, IP assignment, Delaware incorporation, and 83(b) elections protect your company.
- What VCs actually look for during due diligence and how to avoid common red flags.
- How founders should negotiate valuation, board control, and investor rights.
- Why leverage comes from building a great business — not signing better term sheets.
- The wildest legal horror stories Kristina has seen, including a startup acquisition gone completely off the rails.
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Hosted by Isabelle Johannessen. Produced and edited by Maggie Nye. Audience development led by Morgan Little. Special thanks to the Foundry and Cheddar video teams.
