1400 Gables Ct #103 Plano, TX 75075
5601 Bridge Street, #300, Ft. Worth, TX 76112

Before Seeking a Second Round of VC Funding, Ask the Following Questions to a Qualified Dallas Business Law Attorney

Dallas business law attorney, Richard “Ric” Armstrong, weighs in on the pros and cons of getting more investors for your business.

Your start up is doing quite well after its opening rounds, and you’re now making plans for expansion. However, don’t just rush into a second round of fundraising. You should seek the advice of an experienced business attorney, both before you make your pitch for more venture capital and before you sign any agreements.

When talking to your attorney, here are a few key questions to ask:

• What am I giving up by taking on more investors? Every time someone new invests in your start up, you risk losing more equity in your own business—i.e., less of a share in your own success. Make sure you’re okay with taking that risk before giving away more of your company. Sometimes slower, organic growth means bigger profits for you down the road.

• What warning signs should I watch for? Your second round of investors might be a little more aggressive than your first investors because now you have some proven success, so the expectations of a return may be higher. Always have an attorney check your agreements to make sure there are no provisions that work against your best interests.

• Where should I draw the lines in negotiating terms? While venture capitalists may have higher expectations when investing in a successful start up, you also have some clout to bring to the table because you have proven you can produce. A qualified attorney can help you navigate the fine line between standing your ground and letting go on certain provisions.

Don’t take chances with your equity by raising more venture capital without the advice of a good Dallas business law attorney. Contact Armstrong The Law Firm, P.C., today at 972-424-L-A-W-S (5297).

www.planobusinesslawyers.com

Richard L. Armstrong, Principal

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2 Comments
  1. All good points! I dream of starting my own business one day, so your advice for the “second round” of investors was helpful for me as I begin thinking about going in for the first time.

    • I’m glad you received some benefit, Camille!

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Armstrong The Law Firm, P.C.
Plano Location
1400 Gables Ct #103
Plano, TX 75075

Fort Worth Location (By Appointment Only)
5601 Bridge Street, Ste. 300
Ft. Worth, Texas 76112

Phone: (972) 424-5297