[grellas]

A high percentage when founders believe they have something valuable to protect. In early formative stages, probably only a small minority.

It is all cost/benefit, though. What does it cost to use lawyers? What is at stake? In my experience, it is the rare case where founders will sink large resources into something (significant labor, etc.) without some legal documentation.

Some do LegalZoom, but this has its own problems (failure to use restricted stock and to capture IP being the most important). I have written about this elsewhere.

My general guideline: if a startup has real prospects, it is usually worth investing in legal resources as soon as practicable, even if it means doing a deferred-fee deal with the lawyers. The initial setup itself is usually not that expensive. At the very least, you should go as a team to a qualified lawyer for an initial meeting to get advice about the process - then you will have a basis to make a more informed decision.

[log0]

Thank you Grellas. It is really insightful and informative advice, and immensingly helpful for me to think more.

I will incorporate your suggestions and guideline into my decision. Thank you!