Service · Funding & Investor Relations
Raising a Pre-Seed or Series A, and what happens after the money lands
Most founders negotiate their first term sheet once. The investor across the table has done it two hundred times. That asymmetry is the whole problem, and it is not solved by reading a blog post about liquidation preferences the night before.
The work starts before the raise
A funding round does not create problems. It exposes the ones already there: a shareholder who left two years ago and never signed anything, code written by a contractor who still owns it, a cap table held together by a spreadsheet and goodwill. Investors find these in diligence, and finding them late costs either the valuation or the round.
Fixing them takes weeks when there is no deal on the table and days of panic when there is. If you expect to raise within the year, this is the cheapest legal work you will ever buy.
What I look at first
- Who owns the company. A cap table that reconciles to signed documents, not to memory. Founder vesting, if there is any. Anyone who was promised equity in a conversation.
- Who owns the product. Assignment of intellectual property from every founder, employee and contractor who touched it. This is the single most common hole, and the one investors care about most.
- Where the company sits. Whether the Georgian entity is the right one to raise into, or whether the round needs a holding company somewhere an investor recognises.
- What you have already signed. Advisor agreements, an early loan from a relative, a letter of intent nobody thought was binding.
The instrument: SAFE, convertible note, or priced round
At Pre-Seed the argument is usually between a SAFE and a convertible note. A SAFE is not debt and carries no maturity date; a note is a loan that eventually has to convert or be repaid, which matters a great deal if the next round is late. Both defer the valuation argument rather than settling it, and both can stack up until the founders discover at Series A how much of the company they have already promised away.
A priced round settles ownership now, at the cost of a longer negotiation and real legal fees on both sides. Which is right depends on how far you are from a round that can carry a valuation, not on what is fashionable.
Reading a term sheet properly
Valuation is the number founders look at and rarely the term that costs them most. The terms that decide what you actually keep, and what you actually control, sit further down the page:
- Liquidation preference. Whether it is a plain 1x, and whether it participates. A participating preference on a modest exit can leave the founders with very little.
- The option pool. Whether it is created before or after the money. A pool carved out pre-money is paid for entirely by the existing shareholders, which is you.
- Anti-dilution. Broad-based weighted average is normal. A full ratchet is not, and it bites precisely when things are already going badly.
- Control. Board composition, and the list of decisions the investor can veto. This is where founders lose the company without losing the majority.
- Drag-along, tag-along and transfer restrictions. Who can force a sale, and who can block your exit from it.
Diligence
Once a term sheet is signed the round becomes a document-production exercise on a deadline. Corporate records, contracts, IP chain of title, employment arrangements, tax position, any dispute. The deals that fall apart here rarely fall apart over something serious; they fall apart because a founder answered a question badly, or slowly, or three different ways.
I run this from your side: assembling the data room, answering what is asked rather than volunteering what is not, and telling you early which problems need disclosing rather than hiding.
After the money lands
An investor who has wired money acquires rights: to information, to reports, often to a board or observer seat, and to consent over decisions that used to be yours alone. Founders who treat the closing as the finish line discover the obligations later, usually by breaching one.
Investor relations is mostly a discipline rather than a legal problem: a reporting rhythm you can actually sustain, bad news delivered early and in writing, consents obtained before the decision rather than after. The legal part is knowing which decisions need a consent at all, and keeping the corporate record straight so the next round is not spent reconstructing this one.
Scope, plainly
I act for the company and its founders on the structuring, the documents and the negotiation, and on the Georgian corporate work that sits underneath. Where a round involves a US or EU securities filing, that is done together with securities counsel in the relevant jurisdiction; I will tell you when you have reached that point rather than improvise past it.
Frequently asked questions
Do I need a holding company abroad to raise money?
Not always, and it is worth resisting the assumption. A Georgian company can take investment directly, and for a local or regional investor that is often simplest. The question is what your investors are used to: a fund with an existing template will push hard for a structure its lawyers already know, and restructuring later is more expensive and more disruptive than doing it before the first round. The answer depends on who you expect to raise from, not on what other founders did.
SAFE or convertible note?
A SAFE is not a loan: there is no interest and no maturity date, so nothing falls due if the next round is delayed. A convertible note is debt, which means a repayment date and a creditor if the round does not arrive in time. Founders usually prefer a SAFE for that reason; some investors prefer the note precisely because it gives them leverage. Either way, the valuation cap and discount matter more than the label, and the real risk is stacking several instruments and only learning at the priced round what they collectively cost you.
What most often derails a round in diligence?
Intellectual property that the company does not clearly own. A founder who contributed code before the company existed, a contractor with no assignment clause, a design bought from a freelancer with nothing in writing. It is fixable, but fixing it once an investor has asked means going back to someone who now knows you need their signature. The second most common is a cap table that does not match the documents behind it.