New Business Venture Capital: How An Attorney Can Help You Deal With An Angel Investor

Are you excited because an angel investor has agreed to lend you venture funding for your new business venture? Before receiving the money or signing any official documents, it is in the best interest of your business for you to hire a securities attorney to assist you with the decision. In this article, learn how a securities attorney can help you through the process of dealing with an angel investor so you won't agree to something that you will regret later.

How Can an Attorney Help When Considering Venture Capital from an Angel Investor?

It is not hard to get into a situation where you have allowed an angel investor more control within your business than intended, especially when it is your first business venture. A securities attorney will be able to look over the proposition from the angel investor to tell you what everything means from a legal perspective. For instance, it is common for investors to demand a seat on the board of directors of the company they are investing in. Investors may also want to participate in how the investment funds are used.

A few of the services offered by a securities attorney include:

  • Making sure your capital is released within a specific time frame
  • Deciding how long the investor should have a role in your company
  • Determining the ideal amount of equity for the investor in your favor
  • Helping you maintain the majority of control with running the business

An angel investor will likely want a share of stock with your company or may even want the authority to legally sell some of your assets if the business venture is not successful. A securities attorney can look over the stock or asset agreement so you won't make a bad choice.

How Much Does it Cost for an Attorney to Help with a Stocks & Assets Contract?

You can expect to pay up to $400 per hour for an attorney to assist with a stocks and assets contract. However, the price is based on whether the contract has already been produced by the angel investor or if you want your own contract drafted. You are looking to spend a higher amount if you want a contract drafted, but it is well worth the investment.

Make sure your new business venture will get off to a good start by not jumping into a contract with an angel investor that you don't fully understand. Consult with a securities attorney, like Carter West Law Firm, to get the assistance you need!