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Raising capital for your enterprise

We structure the raise so you stay inside the rules and keep the control you meant to keep.

A capital raise is the point at which you stop owning all of it. The money is the visible part. The part that lasts is what you agreed to in order to get it: who now has a say, what they were told about returns and exits, and what happens if the business does not go the way the pitch deck did. Alongside that sits a set of fundraising rules most founders do not know they are inside until they have breached them, because offering shares to people who are not sophisticated investors is regulated whether or not anybody involved thought of it as an offer.

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Inside an exemption

You find out which fundraising exemption the round relies on before you approach anybody, rather than during somebody else's due diligence.

What you keep, in writing

Control, board seats and exit rights are settled in the documents instead of remembered differently by each side.

A clean register

The allotment is documented properly, which is what stops the next round or the eventual sale stalling on it.

What makes raising capital a legal exercise as well as a commercial one?

Two things. The first is that offering securities is regulated. Under the Corporations Act 2001 (Cth) (the Act) an offer of shares generally requires a disclosure document, and raising without one depends on fitting inside an exemption, most often the sophisticated investor test or the small-scale offering limits on how many investors you approach and how much you raise in a year. The second is that whatever you agree with an investor is permanent in a way a commercial contract is not. A supplier relationship ends. A shareholder stays on the register, holds the rights you granted them, and is still there when you want to sell.

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Do I need a prospectus?

Often not. The Act requires a disclosure document for offers to retail investors, but several exemptions exist. The most used are the sophisticated investor exemption and the small-scale offering exemption, which limits both the number of investors and the amount raised in a twelve month period. Whether you fit one depends on who you approach and how many, which is why it is worth settling first.

What is a sophisticated investor?

Broadly, an investor who meets a financial threshold, usually evidenced by an accountant’s certificate about their assets or income, or who invests above a set minimum amount. Offers to them sit outside the disclosure requirements. The certificate has to be obtained and kept, so it is a practical step rather than an assumption you can make about somebody because they seem experienced.

What rights will investors expect?

It depends on the stage and who they are. Angel and friends and family investors often take ordinary shares with information rights and little more. Institutional investors typically want pre-emptive rights on new issues, anti-dilution protection, a say on major decisions, and terms about what happens on a sale. We will tell you what is market at your stage and what is worth resisting.

What happens if I get the fundraising rules wrong?

The consequences range from investors being entitled to rescind and recover their money through to civil and criminal liability for the company and its directors. Even inadvertent breaches count. The practical damage is usually that it is discovered during the next round or a sale, when there is a transaction waiting and very little time to fix it.

Structure it before you talk to investors

Tell us how much you want to raise and who you are talking to. We will tell you which exemption you are relying on, what you can safely say and to whom, and what the documents need to do, before any commitments are made.

The money is temporary and the shareholder is not

You have investors interested and momentum you do not want to lose, so the pressure is to agree the number and deal with the paperwork afterwards. What gets agreed in that window tends to stick: a valuation implied in a conversation, a promise about a board seat or an exit that nobody wrote down, an approach to a dozen people that has quietly taken you outside the exemption you were relying on. None of it feels like a legal decision at the time, and all of it is.

We will advise on the structure of the raise and which fundraising exemption it relies on.
We will tell you what you can say, to whom, and in what form before you approach investors.
We will prepare the term sheet and the investment agreement.
We will amend the constitution and settle the rights attaching to any new share class.
We will prepare the resolutions and allotment documents so the share issue is properly recorded.

The investors are interested and nothing is documented

The business has traction and you need capital to take the next step. You have spoken to a handful of people, several are keen, and the conversations have been encouraging and fairly loose. Somebody has asked for a term sheet. Somebody else asked what percentage they would get and you gave them a number. You know this should be documented, and you also know the process cannot stall long enough for the interest to cool.

What's included in your capital raising service

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Raise structure advice and exemption analysis.
Guidance on what may be communicated to prospective investors.
Term sheet and investment agreement.
Constitution amendments and new share class rights.
Resolutions, allotment documents and share register updates.

What an undocumented raise turns into

Raises done on conversation and a bank transfer create problems that only appear later, when they are expensive. An investor who believed they were promised a return, or a seat, or a way out at a particular point, with nothing in writing to say otherwise. Shares issued without the allotment being documented, which becomes a cost base problem for them and a due diligence problem for you. A dozen small investors accepted without anybody counting, which puts the whole raise outside the exemption it depended on.

That last one is the serious one. A raise that breached the fundraising rules can leave investors entitled to their money back and the company and its directors exposed, and it surfaces at exactly the wrong moment, which is during the due diligence for the next round or the sale. The buyer’s lawyers find it, the deal pauses, and you are fixing something from three years ago with a transaction waiting on it.

From interested investors to a closed round

We start with who you are raising from and how much, because that decides everything else. Whether the people you are approaching meet the sophisticated investor test, whether the number of them and the amount keeps you inside the small-scale exemption, and therefore what you are allowed to say, to whom, and in what form. That conversation is short, and it is the one that keeps the raise lawful.

Then we document it. A term sheet that reflects what you actually intend, an investment agreement that says what the investor gets and what they do not, a constitution amended where a new share class is needed, and the rights attaching to it set out plainly. We prepare the resolutions and the allotment so the share issue is properly recorded. By the time the round closes, everybody knows what was agreed, and it still reads correctly when somebody else’s lawyer goes through it years later.

How we get the round closed

From the first investor conversation to a documented, compliant close.

Structure the raise

We establish who you can approach, which exemption applies, and what you are permitted to say before any investor conversation goes further.

Document the terms

We prepare the term sheet and investment agreement, amend the constitution where needed, and settle the rights attaching to the new shares.

Close it properly

We prepare the resolutions and allotment documents and update the register, so the share issue is recorded correctly from the start.

Capital raising run by Accredited Specialists in Business Law

Raising money is time sensitive in a way legal work often is not, and founders are right to worry that process will cost them momentum. The way to deal with that is to do the structural thinking early, when it takes an hour, rather than mid-round when it takes a fortnight.

We have 2 Accredited Specialists in Business Law. We structure and document raises for early stage and growth businesses, from friends and family rounds through to institutional investment with negotiated rights. We will also tell you when what you are proposing does not fit an exemption, which is usually the most valuable thing we say.

Our great lawyer guarantee

Six principles we hold to, whatever you bring us and however long it takes.

Take the time

We listen carefully to understand what you want to achieve, then step you through the advice and the documents.

Share our knowledge

We pass on as much as we can, so you can make your own informed decisions.

Stick to our knitting

We only do what we are good at, so you never pay for our learning.

Work as one team

Someone is always available to answer your question or point you the right way.

Fair pricing

A fixed or capped quote for advice and documents, so you do not carry the price risk.

It is your show

We are in it for a front row seat to witness your success, not for our egos.

Structure the raise before you commit to anything

Tell us how much you want to raise and who you are talking to. We will tell you which exemption you are relying on and what you can safely say, then document the round so it closes cleanly and still reads well in three years.

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