Best Legal Practices AFTER You Raise Capital

Whew! You have completed your strenuous capital raising campaign and now you have cash, you have a new set of partners, and you are ready to scale your business. Well—not so fast! Remember that there are still on going legal compliance measures that must be taken to ensure that you are operating legally for the sake of your business, stakeholders, yourself and your employees.

REMEMBER, you can avoid having to worry about any of this by securing knowledgeable legal counsel to take that burden away from you.



  1. Best Legal Practices When Raising Capital: AFTER you raise DAR’SHUN KENDRICK, ESQ./MBA KENDRICK LAW PRACTICE (678) 739-8109 DKENDRICK@KENDRICKLAW.NET
  2. Who are We? We provide LEGAL COMPLIANCE for companies seeking to raise $250,000 or more in private equity. We do NOT find investors or other sources of capital as it violates securities laws. For more information, check out our Slidedeck on The New KLP. Kendrick Law Practice * (678) 739-8109 *
  3. How can you avoid ALL of the following? Hire competent legal counsel AS SOON AS you know you want to raise private equity Kendrick Law Practice * (678) 739-8109 *
  4. 1- Find alternatives to investors who want to invest. There are various options for investors who want to invest in your company after you have reached your capital raising goal (remember that there are limits to how much money you can raise in 12 months). You can give them a place in the next round, for example. Kendrick Law Practice * (678) 739-8109 *
  5. 2- Consider the “WHO” you do business with. Not everyone is meant to have an involvement with your company before, during and after you have raised capital funds. Consider not only the professional accomplishments of individuals and institutions you do business with but also their personality. Documents can be drafted so that the company can use the professional accomplishments and decrease the personal flaws of investors. Kendrick Law Practice * (678) 739-8109 *
  6. 3- Be patient. It’s understandable that companies want to raise money and they want to raise it relatively quickly to start growing their business. However, you don’t want to seem too hasty in your dealings with investors and others. A company will come off as desperate if the sense of urgency is too much. Kendrick Law Practice * (678) 739-8109 *
  7. 4- Be honest about your limitations. This applies BEFORE and DURING the capital raising process as well. As with everyone, be honest about the limitations of the company and the management team. This is especially true before you are securing capital but also during and after the process to limit expectations and develop honesty with your investors. Kendrick Law Practice * (678) 739-8109 *
  8. 6- Get OUT if you need to get OUT. Staying in a bad business relationship with investors or founders is bad, if not worse, than staying in a bad marriage. Once you see signs that you need to depart ways, make sure you have legal counsel ready to do it the RIGHT and LEGAL way. But do it FAST to stop the bleeding. Kendrick Law Practice * (678) 739-8109 *
  9. 7- Stay realistic on your future options. Just run your business and create value for the investors. Running the company with the “hope” that you will be bought out may be a recipe for disaster, although nothing is wrong with having that as a goal. Deliver what you can and the options will present themselves in time. Kendrick Law Practice * (678) 739-8109 *
  10. 8- Limit your investors and lenders. You know the saying: “Too many cooks in the kitchen spoils the soup.” Same concept. Although there are laws that now allow for crowdfunding, it may be more strategic to raise capital from a few strategic investors as opposed to many. There is a lot of accounting and relationships to keep up the more investors you have when you should be focused on running your business. Kendrick Law Practice * (678) 739-8109 *
  11. 9- Reach out to your lawyer for additional help. This is NOT the end for legal compliance. Make sure you continue to retain and reach out to your lawyer to deal with lingering legal issues and any on-going compliance and reporting issues your company has with federal and/or state agencies. Kendrick Law Practice * (678) 739-8109 *
  12. Don’t want to worry about ANY of this? Hire an attorney. (678) 739-8109 • Book a FREE 15 minute services consultation HERE • Sign Up for Our Enewsletter HERE • Let’s talk about strategic partnerships HERE Kendrick Law Practice * (678) 739-8109 *

NOTE: I will be discussing this subject in detail during my “Power Raisers” weekly conference call this Monday (Oct. 12th) at 11 am EST. Visit the News & Events section of my website for more information.***************************************************************************

I am Dar’shun Kendrick, Private Equity Attorney and Owner of Kendrick Law Practicehelping businesses raise capital the LEGAL way. We work with “for profit” companies seeking to raise $250,000 or more through private equity that have a line item budgeted for legal services. I have 2 B.A.s from Oglethorpe University, a law degree from the University of Georgia and an M.B.A. from Kennesaw State University. NOTE: I will be discussing this subject in detail during my “Power Raisers” weekly conference call this Monday (Oct. 12th) at 11 am EST. Visit the News & Events section of my website for more information.

We are ONLY authorized to practice law in Georgia and therefore any legal advice in this blog only pertains to Georgia based businesses. Please visit us online to sign up for a time to discuss services or for our famous 10 point Business Legal Consultation for 1 hour.

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