Hiring a Lawyer for a Fundraising Round: Why It’s Essential
Fundraising is a pivotal stage in the life of a company. It involves seeking investors or institutions willing to invest in the company’s capital. A solid and clear legal framework plays a decisive role in the success of the operation. Involving a lawyer in your fundraising process is not just recommended — it is often essential to secure the deal, avoid costly mistakes, and ensure the operation runs smoothly.
1. Securing the Fundraising Process with Legal Support
A fundraising lawyer supports the company in drafting and reviewing key documents, including:
- term sheet
- the amended articles of association;
- the shareholders’ agreement;
- ancillary contracts (commitments, warranties, exit clauses, etc.).
2. Ensuring Legal and Regulatory Compliance
Fundraising must comply with a strict legal framework, notably regarding:
- investor protection rules (information, disclosure of risks);
- corporate law obligations (quorum, general meeting approvals);
- applicable financial market regulations.
Your legal counsel ensures compliance with all legal formalities, significantly reducing potential legal risks.
3. Optimizing the Legal and Financial Structure of the Fundraising
The lawyer advises on the most appropriate legal and financial structure, depending on the company’s profile, the type of investors, and the economic interests at stake:
- choosing between equity, convertible bonds, BSA Air, etc.;
- determining the company’s valuation methods;
- structuring price adjustment mechanisms (earn-out, anti-dilution clauses, etc.).
Thanks to this tailored advice, the fundraising lawyer helps maximize valuation and protect the founders' interests.
4. Facilitating Negotiations with Investors
Negotiations with investors can be sensitive. The lawyer:
- ensures contractual terms are well balanced;
- protects the company from excessive or unfavorable commitments;
- acts as a neutral third party to facilitate communication between stakeholders.
This contributes to building long-term trust with investors. Legal support in fundraising is, therefore, a truly strategic decision.
5. Managing Post-Investment Obligations
Legal support doesn’t stop once the agreement is signed. The law firm can also handle:
- updates to legal documentation (bylaws, shareholder registers);
- compliance with contractual obligations and investor reporting;
- preparation for future funding rounds or exit strategies.
Hiring a lawyer during a fundraising round is a strategic move that helps secure the transaction, optimize its structure, and facilitate negotiations. The lawyer becomes a true partner — ensuring legal compliance, protecting the company’s interests, and contributing to the long-term success of the project.
