Kitsap County: You need a lawyer and not just any lawyer, but one who routinely does venture capital and early-stage financing deals. This does not mean using a friend or relative who is a divorce, criminal, family law, or real estate lawyer. Don’t be stupid: you wouldn’t seek brain tumor advice from a dermatologist, so why would you seek corporate finance advice from a divorce lawyer?
From due diligence to the wire transfer of money, you will need legal advice. In particular, you’ll need it to create a term sheet, the legal document that defines the parameters of an investment. Wilson Sonsini, Goodrich & Rosati created the fabulous WSGR Term Sheet Generator to help entrepreneurs understand this document.
The generator has forty-eight pages of questions. This should give you an idea of how complex the process is and why you need to get an experienced lawyer. We’ve seen many entrepreneurs risk their financing and spend tens of thousands of dollars to undo the intelligent decision to use a friend or relative to save money.
Pursue a Parallel Existence
The linear nature may give you the impression that fund-raising and entrepreneurship—are serial processes. For example, raising money from crowdsourcing, building a prototype, raising money from angels, launching a new business sector, raising money from venture capitalists, scaling-up, going public, and buying wineries and Teslas.
Fund-raising and entrepreneurship is a parallel process. For example, you may promote a crowdfunding project while meeting angel investors and venture capitalists while you’re asking your friends and family for loans. And this is only one aspect of your parallel existence because you’re also building a prototype, pursuing customers, forming partnerships, and recruiting and training employees. Get used to it. This is the lifestyle you’ve picked.