The first step in running a legitimate business, is getting all of your legal documents in order. Same goes for when you are looking for financing for your company. This will set you up for less headaches both physically and financially in the future.
Getting Your Legal House in Order: 3 Key Things You Need
1. Shareholder’s Agreement
This document explains how your company will operate after your equity offering, as well as which rights shareholders will have.
2. Subscription Agreements
These are agreements between a company and investors in which the company promises to sell a certain number of shares at a specified price point.
3. Term Sheet
Term sheets set out the amount of financing you seek, the price per share, shareholder voting rights, closing details, and more.
Getting Your Financial House in Order: 3 Key Things You Need
1. Business Pitch Deck
This is a concise presentation which briefly describes your business to potential investors. The idea is to clearly communicate your value proposition, whom you serve, and which problems you address in as short a time as possible.
2. Financial Statements
Accurate financial statements covering the past few years, prepared by an accounting firm or other outside party, gives investors a snapshot of the health of your company, as well as prospects for the future.
3. Executive Summary
This is a high-level overview of what your business does and your strategy to grow your business. It doesn’t have to be comprehensive, but it has to be engaging as it is often the first thing investors will read.
This list is not entirely comprehensive, but is a good first step to getting all your ducks in a row. If you require more assistance, seek out a business consulting service to help expedite and procure the documentation process for your deal. These services may cost a bit up front, but will pay out in spades in the future, both monetarily and legally, all the way to deal closing.