Financing your business can be a challenge. Business owners are faced with a bewildering set of questions on how to best go about finding capital for their business. Just the lingo alone can be daunting! If you are seeking capital from institutional investors such as venture capitalists, you will have to get used to investment terms like “1.5x preference full ratchet with a triple dip.” Considering that agreeing to the term sheet is the first step towards receiving hundreds of thousands or even millions of dollars in venture financing, it’s understandable that some entrepreneurs don’t spend a lot of time on understanding the details of their financing. But that’s a mistake, because financing transactions are complex matters that have lasting repercussions on a business.
A good financing attorney helps your company grow
If your business needs capital investment, we can help you in the following ways:
- Advise on the best strategy for capital investment: debt vs. equity, bootstrapping and “friends and family” investments, seed, angel and VC investments, and many others, including “crowd-sourced” funding and other emerging models.
- Help you quantify the cost of capital. Different investment structures have different costs of capital, and they will not be as obvious as the interest rate on debt. Moreover, different investment terms dramatically affect your odds of ever seeing a capital return on your start-up business. I deliver practical advice on the potential effects of different investments on both control and rights to proceeds.
- Advise on market rates and contract terms.
- Negotiate the term sheet.
- Draft and negotiate definitive documents.
- Serve as a trusted counselor and financing attorney. Financing transactions are exciting milestones for your business, and capital is the lifeblood for the business to move forward. But they are also stressful transactions, and you will need level-headed advice on process, negotiation and your options.
We also advise investors. If you are a seed or angel investor, or if you are contemplating a “friends and family” investment, we can help you understand exactly what you are getting into and negotiate the definitive documentation to make sure your investment is protected. Even if you trust the person you are investing with, it is best that you understand exactly the terms under which you are giving them your money.