We believe in expanding access to venture capital financing.

Promising early-stage companies typically seek venture capital financing as a path to continuing their company’s growth and success. As venture capital financing is generally provided by sophisticated investors, investment banks and financial institutions, it is imperative to work with an attorney experienced in venture capital law in these transactions to ensure that you are protecting the interests of the company while simultaneously placing the company in the best position to grow.

While it is essential to work with an experienced venture capital attorney to draft and negotiate the documents for these transactions, it is equally important to work with an experienced attorney for venture capital consulting when it comes to due diligence for the transaction. There are three stages of diligence that investors typically use when evaluating your company for financing:

Venture Capital Financing
  • Screening diligence using predetermined criteria to flag investments that fit the investor’s mandate or criteria.
  • Business diligence to determine the viability of the deal, which may include reviewing the management team, market potential and business model.
  • Legal diligence that occurs once the investor is moving toward a favorable decision, and includes a review of all legal aspects of your company.
Venture Capital Financing
Once passing the screening and business diligence hurdles, legal diligence can make or break a deal. Being prepared for legal due diligence is more complex than providing various information about the company to investors. Think of due diligence information like puzzle pieces that have to fit together perfectly to tell a complete and compelling story about your business to investors (and their lawyers). This is why it is important to work with an experienced venture capital attorney on legal diligence; the sooner you can tell a complete and compelling story about your business, the sooner you can receive vital financing necessary for the continued growth of your business.

As a venture capital lawyer at top corporate law firms, Shakera’s experience includes representing several technology and life sciences startups and venture capital firms in preferred stock financings and general corporate matters.

Frequently Asked Questions

I’m not sure if venture capital financing is right for my company, what are some questions I should consider in making a decision?
While most companies can certainly benefit from venture capital financing in growing their business, the decision to seek financing is an important one. Some questions to consider are:

  • Will venture capital financing mean growing the company in significantly less time than I could without the financing?
  • Am I ready to give up control of the company?
  • Is the relationship with the investor the best fit for the long term, given it will last around 10 years?
As my company begins to think about venture capital financing due diligence, what are some questions we should keep in mind?
While these may seem obvious, some questions to begin thinking about are:
General corporate documents

  • Are your organizational documents complete, accurate and up to date?
  • Is there proper documentation and records of capitalization?
  • Are all minutes of meetings of the board, committees and stockholders authorizing corporate action where required available?

Human resources

  • Do you have appropriate agreements in place for all employees and consultants, including non-disclosure agreements, non-compete agreements and invention and assignment agreements where appropriate, particularly for key employees?
  • Do you have appropriate documentation of employee benefit plans and arrangements?

Intellectual property

  • Do you have legal opinions for intellectual property available?
  • Do you have appropriate licensing agreements for intellectual property?
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