Funding Your New Company

As business lawyers dealing with start-ups in Silicon Valley, we often meet founders with great ideas but without a fundamental understanding of how their company can raise funding for their new business. Start-up companies and small businesses hoping to expand are considered high-risk businesses. It can be difficult for entrepreneurs to turn their ideas into reality. This is why venture capital plays such a critical role in business development .

Venture capital refers to capital that is invested in a high-risk project. When seeking venture capital, it is very important to consult an attorney at a corporate law firm for legal advice regarding whether your idea is suitable for venture investment. If you decide that you do have a fundable idea, the attorney can help guide you on structuring your company to accept investment, and the types of agreements required for investment at each stage of growth.

As you’ll learn by watching this brief video from Capital News Online, when a venture capitalist agrees to invest funds in a risky project, he or she is likely to place conditions on the investment. In the example given in this video, the venture capitalist insists on owning 60 percent of the company and on having the authority to make all major decisions for the business. There are often other conditions, such as membership on a board, approval rights over subsequent financings, and requirements over how a founder can vote and transfer their stock. Because of this, it’s essential to seek the counsel of a corporate attorney to help guide you through the adventure of starting your new company.

Do You Need a Lawyer When You Sell Your Business?

Selling a company—even a small, family operated business—is not a simple matter. Before signing any paperwork, it’s essential to obtain a business lawyer who is experienced in working with businesses as they prepare for sale. As business lawyers in San Jose and the greater San Francisco Bay Area, we have had experience in assisting shareholders and management teams in mergers and acquisition transactions as they prepare for this critical juncture in the sale of their business. corporate attorney

Selling a business is, in and of itself, a full time job. For that reason, your corporate attorney can assemble a team of experts whose services you’ll need, such as a business broker or tax advisor. Next, it is critical that your business processes, financials, and documentation be reviewed, and, if necessary, corrected, so that a potential buyer’s investigation into your business’s affairs will be smooth. This review can also uncover areas of risk that may be present in a transaction so that you can determine how they can be best assessed.

Once you start considering potential buyers for your business, you attorney can help in creating the initial documentation. For example, your corporate attorney can devise a confidentiality agreement that your potential buyers will be required to sign before you disclose any proprietary information. He or she can also prepare a letter of intent which outlines the terms of the sale for all parties to agree to before moving forward.

The old adage, “the earlier the better” holds true in working with your lawyer in selling your business. Involving your lawyer early can put you in a much better position toward a successful sale of your business.