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Forbes Legal Council
Experienced chief legal officers & law firm partners from Forbes Legal Council offer firsthand insights on legal issues.
Whether you’re just starting up or expanding your new business, there’s a good chance you’ll need to rely on investors at some point. But with any business deal comes potential pitfalls, and fundraising is no exception.
The right attorney can help you steer clear of issues large and small. From how to better understand investor agreements to how to stay in control of your company’s day-to-day operations, seven legal experts and executives from Forbes Legal Council discuss the most important questions to ask your attorney before raising capital.
From top left to right: Perry Liss, Anthony Johnson, Francesco Barbera, Dan Hussain, Lawrence Buckfire, Doug Bend, Matthew Moisan. Photos courtesy of the individual member
1. What Are Your Past Experiences?
Ask your attorney about past experiences with raising capital. Venture capitalists like seeing familiar faces. An attorney without prior experience in raising capital or on the venture side of funding may fall short when you need financial security. Despite the widely held thought that all attorneys know all areas of the law, we really do not. We know what we’ve practiced. We really don’t learn much of anything in law school besides how to spot issues, how to research, and how to write briefs. If an attorney has never been around a capital raise in some aspect, they likely have no idea what to do, what to look for, or how they can best protect and serve their client. – Perry Liss, The Law Offices of Perry Liss, LLC
2. How Can I Protect Myself From Future Investors?
Business owners often focus so much on the “now” that they forget to consider what might happen down the road. Make sure to ask whether the new investor can transfer or sell their ownership. What power does the new investor have to act on behalf of the company? Could the investor work with other investors to control your business? Plan for future success and protect the best case scenario. – Anthony Johnson, Johnson & Vines PLLC
