Fundraising is a milestone — but it’s also a test. When investors evaluate your startup, they aren’t just betting on your pitch. They’re looking at your structure, documentation and readiness to scale.
At VSQ Legal, we work with high-growth startups to get legally and strategically prepared before the first investor call. Because the truth is: if your house isn’t in order, you won’t get past the second meeting.
Here’s your no-fluff guide to preparing for a funding round, with a focus on what actually matters in 2025.
1. Get Your Corporate Structure Right
Investors want to see a clean, investable legal entity. If you’re a founder still operating as a sole trader, or using a messy structure with shared IP and no clear ownership — fix that now.
Checklist:
- UK Limited Company with share capital
- Clear shareholding structure
- Up-to-date Companies House filings
- Articles of Association that reflect your current cap table
VSQ Note: If you’re planning to issue SEIS/EIS shares, make sure your company is compliant before raising. We regularly fix SEIS messes for founders who didn’t plan ahead.
2. Get the Cap Table Crystal Clear
Your cap table is one of the first documents any serious investor will ask for. They want to see who owns what, how much dilution has already occurred and whether there’s headroom for option pools or follow-on rounds.
Checklist:
- A single, up-to-date cap table spreadsheet
- Fully diluted equity included (including SAFEs, ASAs, and options)
- Founders and key team members properly recorded
- No unresolved share transfer issues
VSQ Tip: If you’ve raised on SAFEs or ASAs, make sure you understand how and when they convert — and how they’ll affect valuation and control.
3. Formalise Your Founding Team and Key Hires
Investors will scrutinise your team — not just for talent but also for legal clarity. Are contracts in place? Are IP rights assigned? Are share options documented properly?
Checklist:
- Employment or consultancy contracts for founders and key hires
- IP assignment clauses signed
- Option pool set up through a proper EMI scheme (or equivalent)
- Board structure formalised with minutes and resolutions
VSQ Tip: If you’re offering equity but haven’t formalised it through a proper option plan, you’re creating risk for you and your team.
4. Review and Lock Down IP
If your startup relies on proprietary technology, brand identity or data, investors will want to know who owns what — and that it’s legally protected.
Checklist:
- Trademarks filed or in progress (at least for brand name and logo)
- Code written by contractors covered by IP assignment clauses
- Domain ownership registered to the company, not a founder
- No outstanding IP disputes
VSQ Tip: We’ve seen funding rounds collapse over unclear IP ownership — especially when contractors or ex-cofounders built early versions. Don’t let that happen.
5. Prepare Key Commercial Documents
By the time you're raising, you should have signed contracts in place for customers, suppliers and strategic partners. Investors want to see that you’re not just an idea — you’re already delivering value.
Checklist:
- Terms of business or SaaS agreements signed
- Any pilot deals or letters of intent documented
- Clear data processing agreements (especially if B2B SaaS or handling personal data)
- NDAs and employee contracts with confidentiality clauses
VSQ Tip: Don’t wait until due diligence to clean this up. The earlier your documents are in shape, the smoother your round will be.
6. Get Data Room Ready
You don’t need a massive VC-style data room at Seed, but you do need to be ready to share a package of clean, accessible documents when asked.
Checklist:
- Corporate documents (incorporation certs, articles, resolutions)
- Cap table
- Shareholders agreement or founder agreement
- IP assignments
- Key commercial contracts
- Financial projections and management accounts
VSQ Tip: We provide founders with a streamlined, investor-friendly data room checklist so you’re never scrambling to pull it together post-pitch.
7. Know the Terms Before the Term Sheet
When that first term sheet lands, will you understand it? Participating preference vs. non-participating? Drag-along vs. tag-along? Founder vesting? Anti-dilution?
Don’t nod and hope for the best.
VSQ Role: We review, negotiate and explain term sheets line by line. Our focus is founder protection — making sure you keep control, avoid dangerous clauses and raise on terms that support long-term growth.
Final Word: Fundraising Is a Strategy, Not a Scramble
Most fundraising mistakes aren’t made during the pitch. They’re made before — by skipping legal setup, rushing term sheets or ignoring dilution risks.
At VSQ Legal, we help founders raise with confidence, speed and clarity. From structuring your first round to negotiating your Series A, we give you the legal backbone to support your ambition.
Raising soon?
Let’s talk. We’ll help you prepare, negotiate and close — with no fluff and no loose ends.
VSQ Legal — For startups ready to scale on solid ground.
