How to raise investment in the USA: guide for UK startups
Want to attract US VCs? US legal expert Daniel Glazer of Wilson Sonsini explains what US investors look for, when to do...
You might have spotted the blog post about how to raise investment on the personal website of Tom Blomfield, founder of Monzo and GoCardless. Or if you didn’t read the post, you might have seen how it was reported in the media.
While the media buzzed about Tom’s allegations of bad behaviour by investors (waiting for hours, smoking, feet-picking – urgh), at SeedLegals, we read Blomfield’s extensive post in full to take in what he had to say about working with VC and angel investors.
Overall, we agree with Blomfield:
But… raising investment doesn’t have to be a slog. SeedLegals exists to solve many of the problems Blomfield notes in his post. In this article, we look in detail at Blomfield’s advice and how SeedLegals can help.
In the introduction to his post, How to raise investment, Blomfield writes that it contains the advice he gives to founders who ask for his help in fundraising. Here’s what we’d like to add to his points:
Usually, yes. But if you’re going after VC investment, at SeedLegals we recommend creating the term sheet yourself to be on the front foot when you meet VCs. It’s your company, why shouldn’t you get to specify the terms?
WIth us it’s easy to create a Term Sheet: log into SeedLegals, go to Funding and select a round. Answer the questions to complete your Key Deal Terms and that’s it. We automatically generate your Term Sheet. Share it with VCs, negotiate, and update the terms as you need to. VCs can easily send you a counter-proposal via SeedLegals which avoids a back-and-forth email rally of endless tracked changes in documents. When you’re ready, go right ahead to create the Shareholders Agreement and Articles to match the deal terms in the Term Sheet, ready for everyone to sign.
Under Legals and Diligence, Blomfield recommends founders “[get] your corporate paperwork in order & up-to-date in a single Google Drive folder before you start fundraising”.
Yes, you could use GDrive, but your investors would need a Google login, they’re bound to keep asking you for the link because they’ve lost it, you’ll have to keep re-uploading documents as they change… it’s a pain. Which is why we created SeedLegals Data Room, so you can store all your documents on SeedLegals – your deal docs and your diligence docs, all in one place.
Yes… or you can use SeedLegals to create legally robust and reliable documents and do your round for a fraction of the cost and time.
At a traditional law firm, funding rounds are a slow manual process often handled by junior lawyers. (Did you know that Linklaters and other top firms recently upped the pay for newly qualified lawyers to over £100,000 a year? And of course it’s customers who are paying those big salaries.) Painfully steep legal fees are particularly baffling because most funding round documents are almost entirely (95%+) identical.
SeedLegals automates the creation of your legal documents, on whatever terms you and your investors agree on. This is backed up by our team of legal and accounting experts who are on hand to support founders. Between them, our team has done hundreds of funding rounds – more than any typical paralegal or junior lawyer.
Blomfield looks at the ‘standard terms’ you can expect for Pre-Seed, Seed and Series A rounds. When you do a funding round on SeedLegals, there’s built-in help and bite-size tutorial videos to explain the terms step-by-step. There’s no need to pay an expensive lawyer to walk you through the terms – using our up-to-date comprehensive data about thousands of funding rounds, we explain what’s normal, what founders usually choose, and what some particularly demanding investors might ask for. And if there’s anything you’re not sure about, just hop into the online chat to ask us.
“Make sure you file your new investment docs somewhere safe. You’ll need them for diligence in the next round.” Well, no kidding. With our Data Room, your documents are all kept securely together on SeedLegals. You can download them to store offline. To access them again, just login.
Blomfield looks in depth in this blog post at what investors are looking for. Any investor wants the founders they put money behind to be focused on growing the business. That’s obvious, of course they want a big juicy return on their investment. And investors know that traditional fundraising is a time-consuming distraction for founders – so why aren’t more of them using SeedLegals, the fast, smart, modern way to do their deals? Especially since VCs often claim to be pioneers, driving investment in tech-for-good. Why are their own operations often so outdated?
Actually, forward-thinking VCs do use SeedLegals. For example, we work with Fuel Ventures, Haatch Ventures, SFC Capital and Deepbridge Capital who use SeedLegals to automate the legals for their deals. These VCs want to make sure their investments happen quickly, at a sensible price, and with clear communication with the founders throughout – and SeedLegals helps them deliver on all these.
Never mind funding rounds taking months, with SeedLegals, you could close your investment deal with a VC in just a few days. Don’t believe us? PPC Protect closed a £2 million Seed Round on SeedLegals, led by Fuel Ventures – they went from term sheet to close in just 9 days. And AI Rehab closed their round on SeedLegals, led by Deepbridge Capital, in just 10 days.
We exist to make legals and admin tasks super speedy for founders and investors, at transparent, low prices. We do this so you can get back to developing your product or service, leading your team, and growing your business. Of course, we’re assuming that you didn’t start your company because you just love spending all your working hours (and a chunk of evenings and weekends) fundraising…
We’d like to think anyone advising startups about fundraising would include tips on how to get it done as fast as possible, and how to dramatically cut down your legal bills, And for that, you’ll want SeedLegals. There’s a reason we close more funding rounds in the UK than anyone else.
Find out how our range of agile funding services can help you raise anything from a one-off investment to a full Series A or B round: SeedLegals | Raise »
For more detail on how we make investing quicker and easier for VCs, take a look at our Deal Manager »