Raising capital is often an essential and necessary way businesses get much needed funds. When looking for a lawyer to help you, it is important you target exactly what you want and be completely aware of what this means for your business. Have a look at Capital Raising Info Guide or LawPath can put you in touch with one of our lawyers from our extensive Lawyer Network.
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5 Questions to Ask When Hiring a Capital Raising Lawyer
1. What experience do you have?
It is important you hire a lawyer that has had some experience in raising capital or working with start up companies. You are looking for financial security and want to hire somebody who knows what this process involves. There are important legal documents and contracts to consider when working with outside investors or increasing debt levels so you want to assure your best interests are being served.
2. How do you see this benefiting my business and is raising capital the best way to finance the company’s growth? If so – who are we planning to target?
Asking your lawyer if they believe it to be a valuable task is beneficial. Raising capital from outside investors is a consequential decision that should be taken with care. Issuing equity should only be done if you really need it. A good capital raising lawyer can ensure you target the right type of investors and trusted partners. They will look at your business from an investor’s perspective and work out what type of investor will be interested in the opportunity.
3. What will I have to give up in order to access funding?
When looking to raise capital, it is very important not to forget that outside investors will require something in return for their proposed funding. This is usually in the form of debt or equity, or a combination of each. With equity, investors become partial owners of the business which is dependent upon the funds invested and the agreed value of the business. Therefore, it is imperative to arrange with your lawyer what the agreed upon details will be. A lawyer can ensure you know the exact amount of capital invested, the timing and return of the investment, share of earnings directed back to the investor, and the risks involved for both parties.
4. How can you ensure my business remains mine and I still have control?
A lawyer can make sure you stay accountable to your debt levels and that investors stay separate from legal affairs and economic dealings of the business. It is vital that agreements are in place so that business owners and investors know their differing rights and responsibilities. By having this upfront, business owners remain in charge of the day to day operations and do not need to be concerned of intervention from these outside investors who may seek to provide unwanted input into operations.
5. What are the legal implications of capital raising for my business model and my intellectual property?
Finally, raising capital for business profitability is all wasted if it isn’t done accordingly with the relevant regulations. The longevity and market value of a company is also often dependent on protecting intellectual property. Patents, copyright and trademarks serve to be valuable materials that should also be protected accordingly. Therefore, a capital raising lawyer is necessary to make sure legal compliance occurs to reduce or eliminate the possibilities of future disputes or disagreements with banks and investors.
These 5 key questions will ensure you are ready to jump right into raising capital confidently and efficiently. Ready to talk to someone about raising capital for your business then? LawPath can put you in touch with one of our lawyers from our Lawyer Directory!
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