Many thanks to Maret Delf, Summer Associate currently attending Stanford Law School, for her assistance with this article.
So, you’re about to raise money for the first time. Good luck! Before you start approaching VC firms for pitch opportunities, though, be aware that investors typically expect a certain amount of organization and structure from your company despite its early stage. Below is a brief overview of 8 legal items you should take care of (for your sake) before engaging with investors.
Most importantly, keep good records of everything. It will make the financing process go more smoothly, and will save you significant money and frustration. This includes keeping copies of your company charter and bylaws, minutes of board meetings, any board and/or stockholder consents, major customer list, budgets, business plan, employment agreements and offer letters, and any other documents that have been important in your course of business. You should make sure all of the applicable documents are appropriately signed and organized somewhere you have easy access to them (i.e. a secure cloud data site – many law firms provide secure cloud document hosting at no extra charge). For more tips about organization and its importance to your financing, read our article Why You Cant Afford To Be Disorganized.
If you have all of these bases covered, you’re well on your way to a successful financing. Happy pitching!