You have been through the drill before. It is not your first rodeo. You know you have a great idea. Friends and family have already invested money. As you take it to the next level there are many issues to be addressed from how your existing investors and founders are treated to how the investors in the next seed round will look to invest. And we speak start up.
When a company is ready to take on investors it generally accepts capital through several instruments, including preferred stock, convertible notes, SAFE notes, and KISS notes. These various agreements track the terms and rights for each group of investors. In addition to the agreements, startups need to ensure they are following state and federal securities laws. Ensuring compliance involves navigating a myriad of state and federal securities regulations based on the type of investors and the states where securities will be sold.