Are you working on your first/next fundraising round? Here’s our top tips on how your lawyer should help you through the process…
They should:
- Explain the fundraising process to you and what the cost/timings will be to get the cash. Generally, the more you raise the more complex the deal so the higher everyone’s fees – but not always. Many deals can be done on simple paperwork. A quick call early on can save a lot of wasted time/fees.
- Help you get ready for due diligence – you’ll need financials (budget and forecast), a business plan and a cap table (i.e. who owns what shares) plus information about your deal with your manufacturer, sales/distribution network, team, brand protection, etc.
- Help you get the right investor on board by making sure you understand their terms up front and telling you what’s normal/not, plus help negotiate, e.g.
- Do investors want tax breaks under S/EIS?
- Do they want protection against future rounds and/or anti-dilution, return of their investment before anyone else gets a return, investment tied to milestones, etc?
- Do you/ investors want to tie founders/staff in and have shares forfeited for staff that don’t stay?
- Will investors charge fees, e.g. for services, or for connecting you to other investors
- Only sign documents that work for you so you don’t have problems later on.
If you’re starting to plan for this now and need support we’re happy to chat and explain how we can help. Get in touch today.
