capital raising for small businesses and freelancers

Capital Raising for Small Businesses and Freelancers:

Legal and Practical AspectsJune 2, 2015

Jeffrey A. Bekiares jeff@sparkmarket.com / jeff@founderslegal.com

Essentials to Keep in Mind!• Start-up legal essentials.• What makes a company “investable”.• Sources of Capital – From seed, to angel, to IPO.• Traditional and Alternative Finance criteria.• Crowdfunding – Traditional and equity based.• Legal and tax implications in raising capital.

Start-Up EssentialsDIY vs. Professional Assistance

• What You Can Do:• Form Business Entity / Publication• Obtain Tax ID• Register with DOR / DOL• Obtain additional business licenses• Company authorizations (sometimes)• Discuss and (preliminarily) document your business deal!

• When You Should Request Assistance:• Operating Agreements / Shareholder Agreements• Employment / Consulting Agreements• Equity Incentive Plans• Equity Grant Agreements• Securities Sales Agreements• Section 83(b) Election Letters

Capital Raising – High Level Issues

Type of Company State of Company Composition of Team Protections & Future Incentives

Capital Raising: Traditional and Emerging Sources• Seed Funding.• Traditional Lenders.• Alternative Lenders.• Angel Investors.• Venture Capital / Private Equity.• Public Markets – “Firm Underwriting” or “Best-Efforts”

Offerings.• Crowdfunding.

Capital Raising – Seed Funding• Advantages:

Network of first instance. Most favorable terms.

• Disadvantages: Does not work for everyone! Does not diversify Risk

• What makes a Company “Investible”?

Capital Raising – Lenders• Advantages:

Most familiar terms to the most businesses. Most widely available geographically.

• Disadvantages: Credit crunch; recession. Highly regimented credit criteria; onerous paperwork.

• What makes a Company “Investible”?

Capital Raising – Angel Investors• Advantages:

Larger dollar value investment. Addition of expertise to enterprise.

• Disadvantages: Competitive Marketplace; spotty resources by location. Highly industry specific.

• What makes a Company “Investible”?

Capital Raising – VC & PE Markets• Advantages:

High dollar access. High connection quotient.

• Disadvantages: High dollar thresholds. Highly defined exit criteria.

• What makes a Company “Investible”?

Capital Raising – Public Offerings

Four Primary Varieties of Crowdfunding

Crowdfunding – Businesses Best Served

Deals with a local

character

Mom

and Pop

sEarly Stage Start-Ups

Bricks/

Mortar

Small Offering

s

The Invest Georgia Exemption / 2012

Designing a Winning CampaignCommon Elements

• What kind of Company is likely to be the most successful and why?

• What does the Company offer?• Who is the target audience?• How does the Company present the offer?• How does the Company handle its backers after the campaign

closes?

My Contact InfoJeffrey A. Bekiares, Esq. jeff@founderslegal.com404-606-3735

ATLANTA TECH VILLAGE Suite 5553423 Piedmont Road, NEAtlanta, GA 30305

To schedule a consultation with me please e-mail or call anytime!