When financing a business, owners need to evaluate how funds will be allocated. What part of the business needs the most funds? How liquid does the business need to be? When onboarding investors, business owners need to articulate a clear vision of how the business will be run and where invested funds will be allocated. The two sides will draft a contract based on that vision, and it will include how risk will be managed and how investor money can be liquidated.
Part of gaining financing is protecting the business’ product. If a business is manufacturing a product, it should have proper intellectual property protection through trademarks, copyrights, and licensing. Without that protection, it may not be able to garner financing. Businesses often have to defend against claims that they breached another company’s intellectual property rights.
Also, when financing a venture, businesses need to allocate funds for regulatory requirements, including employment matters. Businesses must provide employees with proper working conditions and equipment. They should be prepared to defend themselves when employees file employment claims.
If you’re operating a business, you need a law firm that understands your business. Contact the law firm of Littleton, Park, Joyce, Ughetta & Kelly.