January 1, 2019 @ 11:11a PST, Irvine, California, USA
Why you should have an attorney when attracting investors…
Are you planning on starting a new business venture, but aren’t able to attract any investors? Hate to break it to you, but it’s not your company that’s flawed, it’s probably you.
Raising capital is like Football.
Raising capital is like Football. You have a coach and then there are the players. Your coach have been in this game for way longer than you have. That means they have in-depth knowledge about your business and its chances of success that you may not even be aware of.
Don’t be surprised if they challenge you at every turn especially if you ask for more money. The one thing you have to keep in mind is no investor worth his/her effort or time will fund a company that they think is a liability. So how do you ensure that they understand the vision you have for your business? By speaking their language and by using terms they can understand.
This is where legal counseling comes into the picture. Just as a doctor can help you keep track of your health, a legal counselor can help keep your enterprise out of hot water. In other words, you can increase your chances of attracting investors by ensuring that your enterprise is legally secured first.
Here’s a little nugget to navigate your way around investors and not only gain their interest, but also convince them to potentially deploy the funds that you need.
The first thing you need to do is to ensure that your business idea (aka intellectual property) is protected in the eyes of the law. Whether it is a product or a software program, an attorney can help you determine what makes it special.
This is exactly what investors will ask you once you meet with them. Besides determining what makes your enterprise special, they will be more willing to invest in a concept that is protected with trademarks and copyrights.
Once your innovation is protected, you need to figure out ownership entity (whether it’s based on a limited partnership, a corporation or LLC, etc). Potential investors will like to know how many partners are involved in the business so that they can determine any overall liability issues. The answers they get will be determined by the number of overall partners and the taxes involved.
The bottom line is, like investors, attorneys are suspicious by nature as well.
Let’s break this down. If for instance one founder is involved in the business, an attorney will be able to draw up an agreement. This agreement will give investors an unadulterated view of who they are working with, how much of the business they own, and who can take credit for it.
The bottom line is, like investors, attorneys are suspicious by nature as well. That is not to say they are paranoid without reason – they are just experienced enough to look for and recognize warning signs that may not be apparent to you at first. In other words, if your attorney sees a problem just waiting to happen, you will get an advance notice so that you can fix the issue. That way, you won’t run into any costly legal issues and your investors will be happier for it.
Better safe than sorry…
You can become wiser by speaking with more investors whether they are interested in your business ideas or not. That is going to be more insightful than getting suggestions and recommendations from your entrepreneur friends who may not have the expertise or experience when it comes to dealing with investors.
Become wise by spending time with experts, and don’t be afraid to spend money on information that can open opportunities for you to attract more investors.
Don’t let pride get in the way. Have the humility to pay up and get the legal counsel that you need in order to ensure long-term success. Become wise by spending time with experts, and don’t be afraid to spend money on information that can open opportunities for you to attract more investors. Strategic planning is the key to eliminating potential legal issues and we have a team of attorneys that can assist you upon your capital raising effort.
Ꙉ Thank you for reading. Keep in mind, Greenfield means New Markets!
ABOUT THE AUTHOR: Carlo Desierto is a serial entrepreneur with years of experience in business startups. He has founded, built intrinsic value, and sold several companies in which he sits as an adviser for the Board of Directors. Carlo has interviewed over 200+ entrepreneurs and published mini-biographies for new digital media channels relating to entrepreneurship, health, self-help, futurology, and the green industry. Most of all, Carlo loves to create teams. Facebook | @Instagram | LinkedIn