An angel investor interested in my early stage venture is asking to view our company bylaws before executing a term sheet. My attorneys ('startup in a box' package from a big firm that's deferring fees) have been slow to complete this. How long should this take? Are they just using a template?
Notice that the original post was about bylaws, not an operating agreement. While it may seem like merely a semantic difference, it's important to understand what the investor candidate actually wants. An operating agreement usually has much more detail than bylaws which simply state how decisions are made and by whom.
I disagree. The Operating Agreement is the MOST valuable TOOL for your business. The main subject would be the Voting RIghts that one haS. This is where YOU can control the company. YIU should also have an Employment Agreement. Meaning you are an employee of your own company. Hete us where Yiu get the golden parachute at your company is sold. This is where you can hide other benefits because most investors only look at the pay areas. So between the employment agreement and in your operating agreement they are things that you can put in there to control your company even if you gave away 75% of your company. That's why these Agreements are most important to look at and study them and learn about them. You should look up Erica Drake Maverick book that selling on Amazon Capital raising Battleground for Entrepreneurs.
I fully agree with Alan Petzold's comments below. The operating agreement is where you protect yourself and founders of the company. Have a trusted and knowledgeable attorney create the operating agreement for you. In addition to the investors and other outside operatives, the operating agreement protects the founders/stakeholders against each other should there be trouble in paradise. And I've seen (and been in) "trouble" in paradise.
There are numerous templates available on the net, many of them for free. Unless you have a specific need for a formal one and have $$ to cover legal fees today, you can just pick a template that sounds appropriate to you, discuss it with your partners, and sign it. Done. If you need something more formal and/or specific to your business, you can always hire an attorney to change it in the future. Good luck with your angel round!
Your investor may be assuming that your company structure or governing state requires bylaws, and depending on how you've organized, such may not exist nor need to exist. Ask your investor what he hopes to learn by reading them. Assuming you don't have them now because you're asking how to write them, it would seem you didn't organize your company in a manner that required them. Provide the underlying information to the investor that they're looking for. Don't write bylaws just to have them. Don't create them just to plug some cotton in a hole. What the investor is probably asking about is the way your company is structured to conducts its affairs (who makes decisions), the duties of its directors and the responsibilities of its officers and employees. If you're a small shop or a solo entrepreneur, you may not even have all of these roles and bylaws are irrelevant as a sole proprietor.
Company bylaws (which are very different from an operating agreement) should be standard templates, and it's a very, very bad idea to put anything unusual in the bylaws.
The main thing that an investor would look for are the rules for appointing directors.