Are you looking to bring in investors to help your start or scale your business? What do you need in place to make sure that this process goes smoothly? Babs Neilan is the founder of Jamieson Law, and an expert in business law, brand protection and helping businesses grow safely. Babs was the perfect guest to join me on podcast episode 66 to share the things you need to have in place which will give investors peace of mind, increase the value of your business and help the process move more swiftly.
If you’re a business owner looking to secure investment, it’s crucial that you get your business investor ready. This means having key legal and operational aspects in order before potential investors take a look under the hood.
There are the key things investors will expect you to have in place:
Business Structure
First, make sure your business is set up properly and all registrations are in order. This includes registering as a company, filing required documents, registering with the Information Commissioner’s Office for GDPR, and having the right insurances like professional indemnity and product liability. Taking these basic steps shows investors you know what you’re doing.
Client Contracts
Investors will want to see you have strong contracts or terms & conditions in place with clients. For service businesses, this may be a standard client contract for a fixed term that guarantees revenue. For ecommerce sites, solid T&Cs protect you legally and cover things like returns procedures. Formal agreements indicate you value your business relationships.
Supplier & Contractor Agreements
Similar to client contracts, investors want to see you have formal arrangements with suppliers, manufacturers, contractors etc. Verbal agreements make investors nervous – they want to see terms in writing that cover things like ownership of intellectual property produced.
Brand Protection
Every investor will expect you have at least applied for trademarks in your operating countries. A trademark application shows you are serious about protecting your brand IP. They’ll also want your website, eBooks etc to have copyright disclaimers.
Website Documents
Investors will review your site for terms of use, privacy policy, cookie policy, and other aspects that show you are covering legal bases. Everything should be compliant and professional.
Contractors
Many small businesses use contractors and freelancers without formal contracts in place, which can be an issue for investors. Even simple 2 page contracts specifying services, payment terms, copyright ownership etc. are better than nothing. Without contracts, freelancers/contractors likely own copyright on work done and could potentially delete or restrict access to this work.
Lack of proper contracts with freelancers/contractors is a common issue that can turn investors away. It is much better to put good contracts in place proactively.
GDPR
If you collect any customer data, you need to demonstrate GDPR compliance. This means having required policies in place, securing consent, and signing data protection contracts with any third party vendors.
The investor due diligence process allows them to review all these aspects of your business and assess if it’s worth investing in. Being investor ready makes the process smoother and faster, reducing delays in securing funds. It’s wise to get these ducks in a row piece by piece over time, rather than stressing to do it all at the last minute before investors start poking around!
Reviewing Investor Documents
Finally, if you have investors ready to go ahead it is vital that you seek independent legal advice to review the investor documents and contracts. These contracts are designed to favour the investor rather than the founder. You want to make sure that you understand what you have signed up to and rights your investors will have. Babs and her team at Jamieson Legal specialise in helping business in the UK and Ireland with jargon free expert advice, and can be contacted at Jamieson Legal.
I hope that this post helps you to continue on your journey to success and if you need any extra support then check out my free resources on my website, follow me on Instagram, subscribe to my monthly newsletter or get in touch at nicole@thebuyerandretailcoach.com
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The Buyer and Retail Coach is a global retail expert with over 18 years experience working in the industry as a buyer and head of buying for companies such as Primark, M&S, and George at Asda, developing and sourcing a broad range of products from Lingerie to Health & Beauty and driving strategies and innovation.
Having worked for the big blue chips, Nicole Higgins now brings that expertise and experience to entrepreneurs and SME’s to help you make your product ideas a reality, scale your business, and increase your bottom line and profits.
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