At Kilam Law, we understand the complexity and importance of securing and managing capital for your startup. Our dedicated team in the Startup and Venture Capital Department is here to guide you through the various ways your business can fundraise for capital, ensuring that your agreements are clear, legally sound, and designed to protect your interests. Below are the key methods of fundraising and how we can assist you in each:
A Term Sheet is often the first step in securing capital. It is a non-binding agreement that outlines the basic terms and conditions of the investment deal between the company and its investor. A well-crafted term sheet sets the foundation for further negotiations and is essential in attracting potential investors. We can help you create a term sheet that positions your business for success and makes a strong first impression.
Another common method for raising capital is through a SAFE (Simple Agreement for Future Equity). This document allows investors to purchase shares at a later stage when a conversion event occurs, without needing an immediate valuation of the company. SAFE notes are a fast and efficient way to raise funds in the early stages of a startup. Our team can assist in drafting and structuring your SAFE documentation to ensure it meets your needs.
A Shareholder’s Agreement is crucial when you are looking to secure a direct equity investment. This agreement outlines the rights and obligations of shareholders, the management structure of the company, and the protections in place for all stakeholders. It ensures clear understanding and minimizes potential disputes. We can tailor a shareholder’s agreement to fit your business, giving you peace of mind in your investment dealings.
A Share Subscription Agreement is another important document when raising capital. It sets out the terms of the purchase of shares in your company. This agreement records the terms on which a subscriber agrees to purchase shares, ensuring both parties are on the same page. Our experienced team can draft this document professionally to protect your interests and ensure compliance with legal standards.
Lastly, if your startup is not yet ready for valuation, a Convertible Note may be a suitable option. This investment vehicle starts as short-term debt, which converts into equity at a later stage, usually once a specific milestone is reached, such as a valuation event. Convertible notes allow investors to receive equity at a discounted rate based on future valuations. We can guide you through the complexities of convertible notes and help you structure them to benefit both your startup and your investors.