California Venture Capital Lawyer
Starting a new business or expanding a business in California requires capital. Unfortunately, capital to start or scale up a business isn’t always readily available for many business owners. They often must turn to alternative sources to raise capital, such as venture capital (VC) firms or outside investors. This, however, leaves many business owners with the dilemma of how to get such funds and how to structure VC deals that protect their interests.
Fridman Law Firm has a deep understanding of how venture capital and venture deals work and the issues startups and investors face. Our business-minded and proactive approach has won the trust of many startups and emerging companies at various stages of their business life cycles. At Fridman Law Firm, our legal team offers invaluable perspectives to venture-backed companies and emerging company clients who need venture capital to start their businesses or expand.
Before finding out how our California venture capital lawyers can help you, let’s first look at what venture capital means for your business.
What Is Venture Capital?
The Securities and Exchange Commission (SEC) defines venture capital as a “type of private fund that is managed by a venture capital firm, which may be required to register with the SEC as an investment adviser.” VC firms generally invest in businesses in exchange for equity, with some firms focusing on particular industries, such as software technology, medical equipment, or consumer products. Other firms may prefer investing at certain stages of the business life cycle — early, mature, or later stages. VC transactions often involve financing startups that require funds, working capital, strategic partnerships, operational support, resources, or talent.
How a Venture Capital Lawyer Can Help in California
When a startup or an investor seeks the help of a California venture capital lawyer for a VC transaction, the process typically involves various stages before the deal is sealed. Having an experienced attorney by your side can help you minimize business risks that may lead to financial or legal problems. At Fridman Law Firm, our legal counsel is aware of the legal pitfalls startups face in VC transactions. We advise startups, emerging companies, business owners, and investors on a variety of VC transactions.
Here are some of the ways our venture capital lawyers in California can help you:
- Assisting in structuring and negotiating terms that align with your business goals and investment strategy.
- Conducting due diligence on potential issues and red flags that may arise, such as licensing issues, and offering you comprehensive insights for informed decision-making.
- Providing corporate governance guidance to help you establish effective governance practices and structures that foster accountability and transparency.
- Drafting and reviewing necessary legal documents, ensuring they explicitly reflect the terms and conditions of the transactions and protect your interests.
- Offering ongoing general counsel support for a wide range of business law matters, including intellectual property protection and regulatory compliance.
- Keeping you up to date with emerging industry trends in the VC space.
- Advising startups and investors on alternative investment vehicles.
- Guiding you through liquidity events and exit strategies, such as initial public offerings (IPOs) and mergers and acquisitions.
- Counseling on areas such as taxation and investment activities.
Take advantage of working with our California venture capital lawyers, who can oversee your transactions to protect your rights and interests.
What Should Be Included in a Venture Capital Financing Term Sheet?
When it comes to a VC financing term sheet, it’s important to read and understand the document before signing it. You should note that these contracts often have legal and financial jargon that may be challenging for most to comprehend. Having an experienced California venture capital lawyer by your side is your best bet at understanding what is contained in a VC term sheet Doing this protects your interests and ensures you get the best deal possible.
Here are some of the elements that should be included in a venture capital financing term sheet:
- Names and details of involved parties
- Equity stake. This is the percentage of ownership being offered in exchange for VC funds.
- Pre-money valuation. This is the value of a company before receiving VC funding.
- Investment Amount
- Liquidiation Preference
- Due diligence clauses
- Redemption Rights
- Confidentiality
- Liability clauses
- Rights and responsibilities of both parties
- Terms and conditions of the contract, such as non-compete agreements, tax clauses, anti-dilution provisions, voting rights, dividends, right of first refusal, etc.
- Dispute resolution process
Signing any contract without reading and understanding what it entails is never a great idea. This also applies to a VC financing term sheet. Understanding the terms and conditions of this contract ensures all involved parties are on the same page, reducing the chances of future misunderstandings and legal issues. By involving an experienced California venture capital lawyer, like Managing Partner Neil Fridman, you can rest assured that your rights and interests will be protected in the VC transaction.
What Transactions Does a Venture Capital Lawyer Handle?
VC investments in startups and emerging companies can involve various types of investment instruments, including equity issuances and simple agreements for future equity (SAFE). As a reputable business law firm in California, Fridman Law Firm’s legal team is well-equipped to meet the needs of our venture capital clients. Our California VC lawyers handle various types of VC-related transactions to efficiently and effectively address the issues our clients face, such as:
- Fundraising
- Investor relations
- Regulatory compliance
- Alternative dispute resolutions
- Investment strategies
- Structuring, reviewing, and negotiating investment documents
- Intellectual property
- Equity plans
- Portfolio company management
- Due diligence investigations
- Startup acquisitions
- Equity-based issuances
- Recapitalizations
- Closing and funding
Fridman Law Firm represents individuals and entities in California involved in venture financing and VC transactions. Our California venture capital lawyers can help you navigate the complex world of investment funding and ensure you secure the best possible deal in a VC transaction.
Speak to a California Venture Capital Lawyer Today To Get Legal Help
If your startup or company has the potential for unlimited explosive growth and a proven track record, you may be thinking about venture financing to gain access to additional capital. However, attracting investors to finance a startup or to fund an existing business can be challenging without the legal advice and guidance of a skilled venture capital lawyer in California. With the help of an experienced attorney, your business can secure appropriate financing to catapult it to the next level. An attorney will also ensure the VC investment is properly structured to protect your rights and interests.
At Fridman Law Firm, our knowledgeable legal team can help you through all stages of venture capital financing. We approach these transactions with the right mindset of collaboration to secure adequate venture capital and foster ongoing relationships with investors after the initial closing. Remember, a bad VC deal can compromise your rights and interests. Let our attorneys guide you as you seek capital to finance your business.
Call 212-262-9823 today or fill out our online contact form to discuss the way forward before signing any VC agreement. We will carefully review the fine print and negotiate with potential investors to help you avoid unfavorable surprises and legal pitfalls. Our California venture capital lawyers are here to help.