A raise starts with three questions: what the company is selling, who can buy it, and what the company gives up. The firm works through those with the founders before any document is drafted.
Deciding what you are selling
Common choices are equity (shares or membership interests), convertible notes, or simple agreements for future equity. Each has different consequences for control, dilution, and what happens if the company does not raise a later round. The firm explains the tradeoffs in the company’s own numbers.
Who can invest
Most exemptions treat accredited investors differently from everyone else. Raising from non-accredited investors is possible but adds disclosure requirements and limits. The firm confirms investor status before the offering is structured, not after.
Structuring the round
Valuation or cap, amount to raise, minimum and maximum, closing mechanics, and what happens with money received before the minimum is reached. The structure is recorded in a term sheet that becomes the basis for the investor documents.
Common mistakes
- Taking money before the documents are signed.
- Telling investors what return to expect.
- Advertising the offering to the public when the exemption does not allow it.
- Skipping the state and federal filings after the first sale.
Contact the office to plan a raise.