Conduct Research on Potential Investors

Raising capital for a new startup can be a daunting task for the founders. There are several types of investors and capital sources for startup projects, including friends and family members, angel investors (high net worth individuals), venture capital funds, corporate/strategic investors, and government grants.

Each of these capital sources has different investment criteria and expectations. It’s important for founders to understand those factors and take them into account in developing a fundraising and investor outreach strategy that is appropriate for the company’s stage of development, industry, and funding needs.

In addition, founders should recognize that being introduced to an investor prospect by someone they know and trust is always a better approach than contacting them cold. Doing your homework and being thoughtful about what types of investors you approach (and don’t approach), and about how you approach them, will save valuable time and increase your chances of getting funded.

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When Should I Form a Legal Entity?

As startup lawyers, we often receive inquiries from passionate entrepreneurs and founders seeking guidance on when they should consider taking their side projects to the next step by forming a legal entity. Forming a company is a “crossing the Rubicon” moment for any startup. It’s an essential step…