The Oceania Times

Top Menu

  • About us
  • Contact Us
  • Cookie Policy
  • Disclaimer
  • Privacy Policy
  • Terms and Conditions

Main Menu

  • Australian Economy
  • Brokers
  • Commodities
  • Currencies
  • Financial Market
  • Gold and Precious Metals
  • Investment
  • Stock Shares
  • About us
  • Contact Us
  • Cookie Policy
  • Disclaimer
  • Privacy Policy
  • Terms and Conditions

logo

The Oceania Times

  • Australian Economy
  • Brokers
  • Commodities
  • Currencies
  • Financial Market
  • Gold and Precious Metals
  • Investment
  • Stock Shares
  • CENTRAL PACIFIC FINANCIAL CORP Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

  • Why Shares of Abiomed Rose 18.4% in July

  • Sustainability is the good oil for Cobram

  • Gold SWOT: Geopolitical tensions between the U.S. and China are boosting haven demand for gold

  • Buffett Goes on Buying Spree as Stock Market Reels

Investment
Home›Investment›Raising your first investment? Here’s how to close a funding round

Raising your first investment? Here’s how to close a funding round

By Megan
May 30, 2022
23
0
Share:

SeedLegals’ Michael McDowell takes us through the steps to closing a funding round, and the common pitfalls to avoid.

There’s a lot of investment opportunities and capital in Ireland at the moment. The country is firmly in the spotlight, particularly with the success of our new stable of unicorns. Now is the time to take advantage.

And right now is a good time to get yourself ready for an investment round. If you get organised and start to meet with investors now, you can close a round before the end of this year.

Future Human

Closing a funding round isn’t as easy as shaking hands and receiving the cash. But it doesn’t need to be complicated either.

Think of your term sheet as your guiding light. As the terms of your agreement, investment lives or dies by this document. If you’re doing a larger round, the term sheet might have been supplied to you by the VC fund or angel investors. Either way, you’ll need to make sure it’s signed by your investors before you accept funds.

Once all documents are signed, you can begin the formal process of closing your round.

Typically, you won’t ask investors to send their money until after they’ve all signed the Shareholders’ Agreement, so bear this in mind when you’re thinking about cash flow. If you’ve hit your minimum investment amount early, or some of your investors are ready to sign before others, you might choose to close your round ahead of the deadline. This can be useful if you’re between investments and the round is taking a little longer than anticipated to complete.

As investments start to land, recording when funds are received is important. Some investors might send you the funds as soon as they’ve signed. As long as all documents have their signature, you’re fine to accept them. Just make sure you don’t neglect your cap table, and keep track of who is paying what.

‘Funding doesn’t need to be a rigid process anymore’
– MICHAEL MCDOWELL

You must host a board meeting with investors to formally approve the round. This can be in person or on a video call, as long as a director signs the Board Resolution.

75pc of your total voting shareholders will need to sign the shareholders’ resolution. You should always aim to get everyone onboard but legally you’ll only need a 75pc majority (usually founders and larger shareholders) to officially close the round.

The last thing you need to do is sign the B5 form and send it to the Companies Registration Office to make sure they know you’ve allocated the shares.

Avoid common pitfalls

Closing a round might sound more complex than you first thought and it’s easy to see how this part of the process can extend way beyond your predicted timeline, especially if investors are slow to sign and hard to pin down. But funding doesn’t need to be a rigid process anymore. Start-ups can mix and match agile forms of funding with traditional funding rounds to balance out the books and bring consistency to their cash flow.

The biggest mistake that founders make early on is that they give away too much equity at the beginning – to advisers, to members of staff – and they give away too much equity on bad terms. Advisers might insist on non-dilution shares or decision-making powers on the board that aren’t justified. This can make the company uninvestable in the future. If you give away too much equity too early, there will be none left for future rounds.

It’s never too early to have an option pool which also demonstrates a good level of confidence and professionalism. Hold firm and strong on your long-term vision.

One of the easiest ways you can ensure sustained cash flow when you’re between rounds is by doing an Advance Subscription Agreement which allows you to collect investment and allocate shares at a later date, leaving you with capital available.

Another avoidable mistake I come across is founders not having a good co-founder agreement. I see so many co-founders going in different directions and even splitting up before they get to a funding round. If you haven’t a good IP assignment in place at the beginning, this can potentially lead to serious issues.

By Michael McDowell

Michael McDowell is country manager for Ireland at SeedLegals, a legal-tech platform for founders and investors.

10 things you need to know direct to your inbox every weekday. Sign up for the Daily Brief, Silicon Republic’s digest of essential sci-tech news.

Source link

Previous Article

Robin Villeneuve Sells 50,000 Shares of Opsens ...

Next Article

Eugene Ross Loses Appeal Against SEC for ...

0
Shares
  • 0
  • +
  • 0
  • 0
  • 0
  • 0

Megan

Related articles More from author

  • Investment

    Despite More Than a Decade of Investment, New Research Reveals Only 8% of Enterprises Have Fully Modernized with Cloud and ...

    May 25, 2022
    By Megan
  • Investment

    Climate change: More fossil fuel investment, just ‘delusional’, warns Guterres |

    June 14, 2022
    By Megan
  • Investment

    Foreign investment in U.S. farmland may be a national security issue, according to expert

    June 13, 2022
    By Megan
  • Investment

    Meta4 Investment: UAE-based META4 to invest Rs 250 crore for EV two-wheeler plant in India

    June 13, 2022
    By Megan
  • Investment

    Man wanted for $1M investment fraud scheme in California arrested in RGV

    June 14, 2022
    By Megan
  • Investment

    “Real estate has always been a good investment…” Terre Haute housing market remains strong despite inflation concerns | News

    June 23, 2022
    By Megan

Leave a reply Cancel reply

You may interested

  • Australian Economy

    South Australian man jailed for ordering and paying for sexual abuse of children in the Philippines

  • Brokers

    Justices Decline Case Challenging Copyright For Floor Plans

  • Stock Shares

    Enphase Energy Shares Rise 17% on Higher 2Q Net, Rev

  • LATEST REVIEWS

  • TOP REVIEWS

Timeline

  • August 8, 2022

    CENTRAL PACIFIC FINANCIAL CORP Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

  • August 8, 2022

    Why Shares of Abiomed Rose 18.4% in July

  • August 8, 2022

    Sustainability is the good oil for Cobram

  • August 8, 2022

    Gold SWOT: Geopolitical tensions between the U.S. and China are boosting haven demand for gold

  • August 8, 2022

    Buffett Goes on Buying Spree as Stock Market Reels

Best Reviews

Latest News

Financial Market

CENTRAL PACIFIC FINANCIAL CORP Management’s Discussion and Analysis of Financial Condition and Results of Operations (form ...

Overview Central Pacific Financial Corp. ("CPF") is a Hawaii corporation and a bank holding company. Our principal business is to serve as a holding company for our bank subsidiary, Central ...
  • Why Shares of Abiomed Rose 18.4% in July

    By Megan
    August 8, 2022
  • Sustainability is the good oil for Cobram

    By Megan
    August 8, 2022
  • Gold SWOT: Geopolitical tensions between the U.S. and China are boosting haven demand for gold

    By Megan
    August 8, 2022
  • Buffett Goes on Buying Spree as Stock Market Reels

    By Megan
    August 8, 2022
  • Recent

  • Popular

  • Comments

  • CENTRAL PACIFIC FINANCIAL CORP Management’s Discussion and Analysis of Financial Condition and Results of Operations (form ...

    By Megan
    August 8, 2022
  • Why Shares of Abiomed Rose 18.4% in July

    By Megan
    August 8, 2022
  • Sustainability is the good oil for Cobram

    By Megan
    August 8, 2022
  • Gold SWOT: Geopolitical tensions between the U.S. and China are boosting haven demand for gold

    By Megan
    August 8, 2022
  • CENTRAL PACIFIC FINANCIAL CORP Management’s Discussion and Analysis of Financial Condition and Results of Operations (form ...

    By Megan
    August 8, 2022
  • Australian economy survived Covid better than most but recovery could slow, OECD says | Australian ...

    By Megan
    September 14, 2021
  • The Best Online Brokers, According to 5 Financial Experts

    By Megan
    September 14, 2021
  • Is Disaster Looming for Australia’s Economy?

    By Megan
    September 29, 2021

Trending News

  • Financial Market

    CENTRAL PACIFIC FINANCIAL CORP Management’s Discussion and Analysis of Financial Condition and Results of Operations (form ...

    Overview Central Pacific Financial Corp. ("CPF") is a Hawaii corporation and a bank holding company. Our principal business is to serve as a holding company for our bank subsidiary, Central ...
  • Stock Shares

    Why Shares of Abiomed Rose 18.4% in July

    What happened Abiomed (ABMD 0.53%), a maker of medical devices that provide circulatory support, including the Impella heart pumps used in cardiac surgery, saw its shares climb 18.4% in July, ...
  • Australian Economy

    Sustainability is the good oil for Cobram

    “We don’t view sustainability as a burden or something removed from the everyday. We believe that a sustainable pathway leads not just to better environmental outcomes but to a more ...
  • Gold and Precious Metals

    Gold SWOT: Geopolitical tensions between the U.S. and China are boosting haven demand for gold

    Strengths The best performing precious metal for the week was platinum, up 4.47% as Impala Platinum reported weaker production for the quarter. Rough diamond prices have continued ...
  • Stock Shares

    Buffett Goes on Buying Spree as Stock Market Reels

    Warren Buffett went bargain hunting with both fists in the second quarter, scooping up billions of dollars worth of equities amid the broader market’s steep selloff. Berkshire Hathaway (BRK.B, $292.07) ...
  • About us
  • Contact Us
  • Cookie Policy
  • Disclaimer
  • Privacy Policy
  • Terms and Conditions
© Copyright The Oceania Times. All rights reserved.

SUBSCRIBE TO OUR NEWSLETTER

Get our latest downloads and information first. Complete the form below to subscribe to our weekly newsletter.