Venture Capital

The one that matters most is a failed exemption. If a round was sold without registration and without a valid exemption, every purchaser holds a statutory right to rescind and recover the price paid, exercisable for a year, and the company's later rounds inherit the problem as a disclosure item. Behind that sit the smaller ones: a late Form D, a bad-actor disqualification nobody checked, an unverified investor in a 506(c) round. For the investor the risks are different in kind: a liquidation preference that does not survive a down round's anti-dilution math, information rights that lapse below a holding threshold, and a cap table that was never reconciled. We work both lists.

The SEC sets the exemption the round relies on, Regulation D for nearly all of them, and the states keep the right to require a notice filing and a fee even though they cannot review the offering itself. A foreign investor taking a board seat, an observer right or access to technical information in a company with critical technology can bring CFIUS into the round, and in some cases a filing is mandatory before closing. For a fund investing in the round, the Investment Company Act and the venture capital adviser exemption govern how the fund itself is organized. We identify which of these the round touches at the term sheet, and we have represented clients in matters before the SEC.

The whole file. At the term sheet, the valuation mechanics, the preference and the board composition, since those are hard to reopen later. Then diligence and the cap-table reconciliation, with every SAFE and note converted on paper before the lawyers on the other side convert them differently. Then the definitive set, the five NVCA-form documents from the stock purchase agreement to the right-of-first-refusal agreement, negotiated as one document in five parts. Then closing: the consents and the charter filing, the wire, and the Form D with its state notices within fifteen days. Between rounds, the option grants, the board minutes and the next financing's groundwork.

Due diligence is where legal and financial risks surface before they are locked into a deal. A disciplined review of corporate records, intellectual property, contracts, and compliance history lets investors price and structure a transaction with eyes open, and it gives founders a chance to clean up issues that would otherwise stall a round.

Yes, and the expensive mistakes happen before the first investor appears. Founder stock issued without a Section 83(b) election within 30 days becomes ordinary income as it vests. A company formed as an LLC and converted later starts its five-year Section 1202 clock at the conversion, so the founders' first years do not count toward the exclusion that can shelter up to $15 million of gain per shareholder on stock acquired after July 4, 2025. Code written by a contractor who never signed an assignment is not the company's. An investor's counsel will find each of these in a week; we fix them for a fraction of what the fix costs mid-round.

By front-loading it. The diligence request list goes out with a data-room index the company can fill in a weekend, the cap table is reconciled once in a shared model both sides sign off on, and the closing checklist is circulated with the first draft of the documents rather than the last. One partner runs the round and signs every email about it. The founders' job during a financing is to keep the business growing into the valuation; ours is to make sure they are asked for a signature, not a decision, in the final week.