A financing round enables external investments in the company. This process requires multiple agreements and negotiations, where the expertise of a lawyer is invaluable.
It is particularly beneficial to seek a lawyer’s assistance in:
- Planning the investment round
- Negotiating the terms of the investment (term sheet)
- Supporting the investor’s due diligence process
- Drafting an investment agreement
- Preparing a shareholders’ agreement
- Carrying out the financing round through resolutions at the general meeting and the board of directors.
A financing round is a critical phase in the journey of a growth company. It requires careful planning, robust documentation, and expert legal support. With Reson’s financing round services, you can ensure your business is prepared to approach investors professionally.
How does a financing round progress
- Preparing the business model and team
- Focused meetings with a lawyer to refine the presentation of the business model and team.
- Role of the Lawyer: Advises the founders and ensures the legality of the business models and potential protection opportunities.
- Benefits: A compelling business model attracts investor interest.
- Choosing a financing strategy and preparing investment proposals
- Delivering business documentation and investment materials.
- Role of the Lawyer: Assists in evaluating financing options (e.g., VC funds, public funding) and drafts financing proposals.
- Benefits: Well-prepared proposals attract investors.
- Negotiating the Term Sheet
- Role of the Lawyer: Analyzes the terms, ensures their clarity, and helps prevent unfavorable contract terms.
- Benefits: Avoid surprises and gain a clear understanding of the terms forming the basis of the financing agreement. Significant renegotiation of terms after the Term Sheet phase is rare, making it crucial to involve a lawyer at this stage.
- Due Diligence Review
- Timeline: 1–3 weeks (depending on preparation). Collecting and submitting documents may take the client anywhere from a few hours to several days.
- Role of the Lawyer: Guides the creation of a compliant virtual data room, ensures the quality of the documents, and assists in completing any missing agreements.
- Benefits: A well-managed and convincing due diligence process builds investor confidence and accelerates the finalization of agreements. As a side benefit, company documentation and processes are often significantly improved during financing rounds.
- Drafting and Registering Agreements
- Client’s Responsibility: Responsible for negotiations and approving the agreed-upon solutions. There will be a significant amount of documents to review and decisions to make.
- Role of the Lawyer: Drafts investment agreements, shareholders’ agreements, and assists with the registration of share issuances at the Finnish Patent and Registration Office (PRH).
- Benefits: Accurate agreements prevent future disputes and ensure the success of the financing round.
Next steps
Schedule a time for a consultation. You can reach out to us at an early stage. A discussion with a lawyer will help you identify the next steps and understand how we can assist you during the various phases of the financing round.
