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PREPARING FOR
FUNDING
Michael D. Hool
Hool Coury Law, PLC
@M_Hool
Hashtag:
#PHXstartupweek
#ChaseBasecamp
#yesphx
Focusing on these Investors:
ANGEL INVESTORS:
High net worth individuals who invest their own personal
capital in early stage companies (Ashton Kutcher)
VENTURE CAPITALIST:
Professional investor deploying OPM from a fund structure
into companies of various stages (Kleiner Perkins) NOTE:
“Super Angels”
STRATEGIC INVESTOR:
Typically an investor deploying capital from corporate parent
into companies of various stages (Google Ventures)
Proactive
Simple
“Clean”
Focus on Stages:
Founding
(Structure/Relationships)
Funding (Capitalization/Money
Raised)
Finishing (Exit Friendly?)
Founding:
Who gets what?
Who contributes what?
Vesting?
Type of Entity:
 LLC versus C Corporation
 Where formed?
Founding:
IP Ownership Trail
•Software Code;
•Patents (“Inventorship” issue)
Other Assets to Assign or Re-title?
Invention Assignment/Confidentiality/Non-
Compete?
Founding:
Operating/Shareholder Agreements
(1) transfers;
(2) voting/board/management;
(3) confidentiality; non-compete;
(4) sale/conversion provisions?
Advisor/Consultant/Board Relationships
Employment Agreements?
Funding:
Create a pro-forma “Cap Table”:
Funding:
•Sale of “Securities”
•The 3 C’s of Liability
•The 3 Issues (E,D,L)
•Be Aware (Beware?)/Prepare!
Funding:
Common Stock
SAFE
Convertible Notes (with Cap)
Series Seed
Series A
Finishing:
What is your investor’s exit?
What is your exit?
Documents exit friendly?
Follow me @M_Hool

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Preparing for funding Phx start-up week 2015