Daniel Sim

My company, Calm Fund, has a big problem and I need your help. We are being sued by SureSwift Capital over the @FounderSummit event series we put on over the past few years. The main issue we have is the impending massive cost of doing discovery in a modern remote company that uses a lot of software, but first here is some context: SureSwift is a PE fund that acquires software companies. We signed a lightweight joint venture agreement to collaborate on the Founder Summit which was an IRL event in Mexico City, an online community and another event in North Carolina. After the final IRL event we terminated the joint venture. The events were by all accounts a huge success, and all in the joint venture posted a small net loss. Then we announced our intention to host our own slate of events in 2023, but ultimately had to cancel those due to budget constraints and reducing our team size. Then SureSwift sued us claiming that we had misappropriated the "intellectual property" and "trade secrets" like the "business model" and "virtual network connections" of the new-terminated Founder Summit JV for the now-cancelled Calm Summits. The suit is a matter of public record and I won't speak about it much further except to say that we deny the allegations and it is my strong belief we would win in a trial. The issue is that we are about to enter the phase pre-trial procedures called Discovery (or eDiscovery) where each side is obligated to share with the other side provide all sorts of their own documents and communications that could be relevant to the case. The big problem is that with modern remote companies using many collaboration tools to create emails, slack messages, docs comments, notion databases, etc the volume of data and the cost of discovery (collecting, reviewing, filtering and processing all these files) seems to have exploded. I've been hearing estimates of hundreds of thousands or more than $1m in costs just to comply with eDiscovery for a single case. That's an insane amount of money, especially relative to the stakes we're talking about in this matter. It puts a huge amount of pressure on folks like me to just settle since its not worth it to go to trial, spend even more money on pre-trial, and still have at least some small % chance of losing. As best as I have learned, in Delaware Chancery court it is also very rare to get your attorneys' fees reimbursed or be able to countersue for the costs when you win. So basically, the status quo situation in the American legal system is that if someone is willing to sue you and willing to spend a boatload of money themselves, they can force you to spend a boatload too (potentially all the way into bankruptcy) with no real defense or recourse unless you settle on whatever terms they dictate. When I asked my LPs for feedback or advice on this topic I was shocked by two things: 1. How many of them had dealt with a bogus lawsuit. 2. How essentially nobody had heard of any good ways to resolve it except paying out a settlement, even if you did nothing wrong. This is a totally insane state of affairs and has been eye-opening for me. Its also a huge risk for early stage founders who simply can't afford a big pay off settlement. I don't see any way I can bring myself to pay a settlement just because its cheaper than litigating the issues. Once you open that door, how do you avoid just becoming a piggy bank for anyone and everyone willing to bring a lawsuit against you? So I'd like to tackle this issue head on and try to find an affordable way to comply with eDiscovery so we can get to a trial and resolve the actual question. The reasons eDiscovery is so expensive don't seem intractable to me and there has got to be a way to do this that is at all proportional in costs to the actual matters of the case. But I need help. 1. Founders (or anybody really) if you have dealt with this issue before and found any kind of good solutions or can point to any good resources please reply below and amplify 🙌 2. I'm looking to collaborate with counsel or firms that have experience tackling this issue or want to. I know a big problem with this whole situation is that nobody on the legal side is particularly incentivized to help reduce costs on this matter, but believe me the entrepreneurial community will be forever grateful for help on this 🙏