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New York City Venture Capital Lawyer

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New York — along with California and Massachusetts — is one of the biggest states for venture capital funding in the U.S., and New York City is the epicenter for venture capital in the Empire State.

Considering the city’s robust university system, amount of commerce, and the financial industry around Wall Street, the availability of venture capital and vibrant startup culture should come as no surprise. Annual venture capital funding in New York State regularly reaches into the tens of billions, according to Crunchbase. These funds are raised through deals that number around 2,000 each year. Each deal requires significant legal legwork, and New York City venture capital lawyers are often kept quite busy.

If you need a Venture Capital Lawyer, let the Fridman Law Firm go to work for you. We have deep knowledge of the legal issues surrounding venture capital and can help your organization shield itself from liability and legal issues.

What Is Venture Capital?

Individual investors, private companies, pension funds, and foreign government investment funds can all provide venture capital to promising startups. Venture capitalists help young companies get off the ground and start growing. Ideally, the startup develops into a fully realized enterprise.

In return for their financial backing, investors will acquire equity in the company. Venture capital funding deals typically involve investors taking an equity interest in the startup through the acquisition of preferred stock. Some investors that specialize in venture capital funding will also provide business guidance to startup companies along with financial backing, with the goal of optimizing their return.

Because each situation is different, transactions usually take on a unique structure. Venture capital lawyers are often brought in to ensure all parties can reach an agreement on the structure of a financing deal.

Legal Matters a Venture Capital Lawyer Handles

Venture capital lawyers are brought in for their knowledge and expertise. These attorneys are highly qualified in this specific area of corporate law, and they are often asked to structure venture capital deals that serve both investors and startups.

When working with investors, venture capital lawyers are focused on mitigating risk and providing a maximum return to their clients. This involves navigating complicated legal and regulatory issues. Venture capital lawyers typically advise investors on issues related to liability, securities law, intellectual property, and tax matters.

When working with startup companies, venture capital lawyers will focus on everything from helping the company with its corporate structure to negotiating funding agreements. Having a smart corporate structure is essential to attracting investment from venture capitalists.

Venture capital lawyers can also help companies develop a business plan, structure a management team, and comply with all relevant laws and regulations. Prospective investors will also want to see signs of potential value, and attorneys can help startup companies demonstrate their growth potential. Venture capital lawyers might also make introductions to potential investors or service providers in their networks.

There are also legal considerations once investors start negotiations with a startup. Companies seeking venture capital must do so in compliance with state and federal law. Venture capital lawyers understand how to navigate complex securities regulations and will often counsel startup clients on the best courses of action.

How a Venture Capital Lawyer Can Help in New York City

New York City venture capital lawyers have a strong understanding of securities laws, corporate laws, and intellectual property laws. When these attorneys negotiate deals, draw up term sheets, and develop contracts, they do so while keeping New York-specific laws top-of-mind.

In that same vein, New York City venture capital lawyers stay on top of the most recent legal developments in the city and state. Skilled attorneys are then able to adapt to shifting legal landscapes to best assist their clients. Being a venture capital attorney in the city also requires strong business acumen. Attorneys with a background on Wall Street or the local business community understand the distinct issues and possibilities facing emerging businesses. The best venture capital attorneys in New York can offer strategic business advice that aligns with legal and regulatory requirements.

With strong entertainment, media, and technology industries in New York, venture capital attorneys in the city are also well-versed in intellectual property law. Many startups are based on valuable intellectual property. Venture capital lawyers can help fledgling businesses to safeguard these assets by filing patents, copyrights, and trademarks. Once the protection of intellectual property has been established, attorneys can then advise on licensing and other legal issues.

What Should Be Included in a Venture Capital Financing Contract?

Whether or not they are based in New York City, venture capital lawyers should play an important role in the drafting of venture capital financing agreements.

On the startup side of the equation, venture capital lawyers can play a key role in negotiating term sheets with potential investors. These documents describe the most important terms of a potential deal, such as the amount of funding and any equity issued to the investors. Venture capital lawyers for a startup can also help negotiate rights and protections for the investor that are fair and equitable to both sides.

Some of the biggest factors related to a deal are related to the valuation of the startup business, as the valuation has a direct impact on how much equity investors might be willing to obtain in return for their investment. First, value is set before the business receives financing, called pre-money valuation. Value is then determined after funding is received, which is referred to as post-money valuation. Parties will typically negotiate what valuation methodology to use.

In addition to valuation, another key aspect of venture capital financing contracts relates to intellectual property. New York City startups typically depend on intellectual property to produce revenue, while investors both want access to and protect intellectual property. Attorneys can draft agreements that both protect a startup’s intellectual property and make sure investors have certain rights related to the use of the intellectual property.

Our Team of New York City Venture Capital Lawyers Can Help Your Organization Support Innovation

Whether you’re on the investment or the funding side, the attorneys at Fridman Law Firm can help you navigate the complexities of venture capital law in New York City. With a background in Wall Street transactions, our attorneys understand the business interests related to funding deals and use this knowledge to structure the best possible deals for our clients. Our attorneys are also well-versed in intellectual property law and can help to protect the valuable property on which most funding deals are based.

If you would like to learn more about our capital raising expertise, reach out to us online or call our office in New York City at 212-262-9823 to arrange a consultation.

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