The article originally appeared in Entrepreneur.com (in Spanish).
Articles of Incorporation, contracts, privacy notices – legal paperwork is one of the biggest headaches of starting a business. While most Mexican entrepreneurs are unfamiliar with these terms, it is inevitable that they will come up when creating a startup.
Lawyers Andrea Durán and Yaritza Rodelo turned this problem into an opportunity and founded Easylex, a platform designed to simplify the legal processes and documents required when creating a Mexican startup. The company was founded in Guadalajara with the help of Andy Kieffer and the seed capital fund, Agave Lab.
“After graduating, we realized that we did not want to be at a corporate law firm. So we decided to create a startup related to what we know best: law,” says Durán.
The lawyers studied the entrepreneurial ecosystem in Mexico. They found that most entrepreneurs see legal processes as burdensome and confusing. Yet these entrepreneurs don’t realize that much of their success or failure depends on their legal set up. In Mexico, 90% of startups fail within their first two years of business. The main causes of this failure are problems in administration, human resources, and technical issues.
“We realized that many entrepreneurs fail because of legal problems. They either struggle to secure investment because of problems with their incorporation structure or they don’t set the rules of ownership and engagement with their co-founders which results in misunderstanding and disagreements among the founders,” Durán explains.
One of the advantages of Easylex is the quality of the documentation they deliver. Their contracts that have been endorsed by lawyers, brokers and investors. This makes it easier to secure follow-on funding with more established, experienced investors.
The success of Easylex lies in making bureaucratic processes easy. And the numbers show there is a clear demand. In their first three months, they’ve had over 700 applications. “It’s very simple. The platform prompts users through a series of plainly-worded questions, then generates the formal legal document. The document can then be downloaded and/or filed automatically with the public registry,” details Durán. “They can also choose where to pick up their documents from a growing list of physical locations. Easylex currently has partnerships in Mexico City, Guadalajara, Monterrey and the State of Mexico.”
If generating a contract or formation document was as simple as making a reservation on Airbnb, perhaps more projects would launch. Easylex helps entrepreneurs get their projects off the ground and hopes to partner with them for any future legal needs.
For Easylex, the challenge is educating Mexican entrepreneurs. This market often looks for the cheapest options, even if they are not the best solutions.
“We have a competitive price, but there will always be cheaper options. The challenge is to educate the entrepreneur about why we are a better option. If they go for cheaper alternatives, they usually end up spending more when they have to make modifications,” says Durán.
Part of that education comes through free downloadable products such as e-books. They also have a blog on their website that they update with the latest legal information.
The entrepreneurial journey is a challenging one, but it does not scare these young lawyers, both under 25-years-old. They are solving legal and bureaucratic issues for Mexico. Now, the solutions are only a click away.