Raising your first round: what to have ready
For education only. Not legal advice. Tellbrief is not a law firm.
Before you sign an investor’s offer, your lawyer will want to know who owns what today and what has already been promised to anyone.
Records to have ready
- Your cap table: who owns what share of the company.
- Any SAFEs, notes, options or equity promised to anyone, including promises made in an email or a text.
- Your formation documents and founder stock agreements.
- The investor’s offer, if you have one: a term sheet, a SAFE to sign or an email with the terms.
- Agreements with contractors and others who built part of the product.
Send them only if your lawyer asks. For the first call, knowing where each one is is enough.
Write down every promise
List every promise of equity to an early hire, an advisor or a friend who helped. Include every promise you can remember, written or not, with who made it and when.
If you signed a SAFE
A SAFE (simple agreement for future equity) is a short contract an investor signs to fund a startup now in exchange for the right to shares later. Y Combinator created it in 2013 and publishes the standard forms, in more than one version.1 Bring each signed copy and note which version it is.
Questions worth asking your lawyer
- Which terms in the investor’s offer matter most for us?
- What should we clean up in our ownership records and earlier SAFEs or notes before we close?
- Given how we plan to raise money and exit, what kind of company should we be, and when?
- What should move from a founder’s name into the company’s name, and how?
Tellbrief adds questions like these to your brief when your answers point to them.
Questions
I haven’t formed a company yet. Should I wait to talk to a lawyer?
You can talk to a lawyer before you form one. Ask what kind of company to form, and when.
What if I’m not sure who owns what?
Say so. Bring what you have, such as old emails, spreadsheets and messages, and mark what you’re unsure about.
Get your lawyer up to speed before the first call
About 30 questions, most of them one tap, free and with no account. Tellbrief turns your answers into a brief your lawyer can work from, and you keep a copy.
Start your brief →For education only. This article is general information for founders, not legal advice, and reading it doesn’t make you anyone’s client. Tellbrief is not a law firm. For advice about your situation, talk to a licensed lawyer.