Services | Investing & fundraising

How we help

YOHANAN Law advises entrepreneurs, startups, founder-led businesses, investors, and small businesses throughout Brooklyn and New York on fundraising, private investments, equity issuances, and debt financing. Whether you are raising capital to launch or grow a business, bringing on outside investors, structuring a friends and family round, or investing in a privately held company, we provide practical legal guidance tailored to your objectives.

Raising and investing capital involves more than negotiating economics. Securities laws, disclosure obligations, ownership rights, governance considerations, and transaction documentation can all have significant long-term consequences. We help clients structure investments, issue equity, negotiate investment terms, prepare financing documents, and navigate the legal requirements associated with private capital transactions.

Our practice focuses on helping clients complete transactions efficiently while avoiding unnecessary complexity. From SAFE financings and angel investments to debt financing and small business investments, we provide no-nonsense advice designed to help clients raise capital, deploy capital, and protect their interests.

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Client Industries

Technology

Manufacturing

Media

Entertainment

Retail

Professional Services

Healthcare

Insurance

Consumer Products

Technology Manufacturing Media Entertainment Retail Professional Services Healthcare Insurance Consumer Products

Previous clients

Representative investors and companies we have advices on capital raises, equity issuances, and investment transactions.

INVESTORS

Brooklyn-based angel investor in connection with a convertible note purchase agreement

Brooklyn-based angel investor in connection with a small business LLC investment agreement in a Brooklyn restaurant

Manhattan-based angel investor in connection with a convertible note purchase agreement

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Companies

New York-based dating app in connection with sweat equity issuance to key staff

New York-based mental health technology company in connection with sweat equity issuance to key staff

Chicago-based technology company in connection with sweat equity issuance to key staff

FAQ

Getting Started

A fundraising attorney helps founders and investors structure financing transactions, prepare and negotiate investment documents, and ensure compliance with applicable securities laws. Depending on the transaction, this may involve SAFE financings, convertible notes, preferred stock financings, stock purchase agreements, investor rights agreements, promissory notes, and other financing documents.
Beyond document preparation, a fundraising attorney helps clients understand the legal and business implications of financing terms, negotiate investor protections, manage dilution concerns, and prepare for future fundraising rounds. The goal is not simply to close a financing, but to structure the transaction in a way that supports the company's long-term growth objectives.
The best time to hire a fundraising attorney is before you begin soliciting investors, not after you have already agreed to terms. Many founders wait until they receive a term sheet, SAFE, convertible note, or investment offer, but by that point they may have already made commitments that are difficult to renegotiate.
In our experience, many of the most costly fundraising mistakes occur at the beginning of the process. A founder who gives away too much equity, agrees to unfavorable investor rights, or fails to comply with securities laws can create problems that affect the company for years. Involving an attorney early can help identify potential issues, structure the transaction appropriately, and avoid unnecessary complications before capital changes hands.
The biggest mistake is treating fundraising as only a business problem instead of a legal one. Founders understandably focus on raising capital, but every financing decision affects ownership, control, future fundraising flexibility, securities law compliance, and taxes.
Many founders give away too much equity too early or rely on online templates without fully understanding valuation caps, discounts, investor rights, or dilution. Others fail to maintain proper corporate records, issue equity correctly, or document investments appropriately.
Tax planning is another commonly overlooked issue. The structure of a financing can have significant tax consequences for both the company and its founders. Addressing those issues early can help avoid unnecessary tax liability and preserve future planning opportunities.
Founders also frequently underestimate securities law compliance. Many assume that raising money from friends, family, or angel investors does not trigger legal requirements. In reality, even small fundraising rounds can implicate federal securities laws as well as state "Blue Sky" laws. In New York, that may include state notice filing requirements even when a federal exemption applies. Mistakes at this stage can create significant issues during future financing rounds or acquisitions.
In most cases, yes.
Many investment offers appear straightforward at first glance, but the legal and economic consequences are often more significant than founders realize. An investor may propose a SAFE, convertible note, equity investment, or debt financing arrangement that seems simple but contains terms affecting ownership, dilution, governance, future fundraising, and investor control.
For example, a valuation cap that seems reasonable today may result in substantial dilution later. Investors may also request information rights that require the company to provide ongoing financial and operational reporting, as well as provisions governing when and how they can exit their investment. These terms can significantly affect the company's operations and future financing flexibility.
At the same time, founders should conduct appropriate diligence on prospective investors to ensure they are working with reputable parties and avoid transactions that could expose the company to fraud or other unnecessary risks.
In our experience, founders should not sign investment documents they do not fully understand. The cost of reviewing an investment offer before signing is often far lower than the cost of correcting a poorly structured transaction after the fact. An experienced fundraising attorney can identify potential issues, explain the practical consequences of the proposed terms, and help negotiate an investment structure that aligns with the company's long-term goals.
The required documents depend on the type of financing being used.
For an equity financing, the transaction may involve a term sheet, stock purchase agreement, investor rights agreement, shareholder agreements, board approvals, disclosure documents, and related corporate records. For a SAFE financing, the primary document is typically the SAFE itself. For a convertible note financing, the transaction generally involves a convertible promissory note and related financing documents. Debt financings often require loan agreements, promissory notes, security agreements, guarantees, and other lender documents.
Regardless of the structure, fundraising transactions should also include appropriate corporate approvals and securities law compliance documentation. This is particularly important in friends and family rounds, where parties sometimes rely on informal agreements or handshake deals that create confusion later. Proper documentation helps establish expectations, protect relationships, and reduce the risk of future disputes.
An experienced fundraising attorney can help determine which documents are necessary for a particular transaction and ensure the financing is properly documented from the outset.
There is no universal timeline. Some financings can be completed in a matter of days, while others take several months.
The timing depends on factors such as the amount being raised, the sophistication of the investors, the financing structure, due diligence requirements, negotiations, and the company's preparedness. A simple friends and family SAFE round may close relatively quickly, while an institutional equity financing can involve extensive diligence, negotiations, and documentation.
In our experience, the biggest delays are usually not caused by legal documentation. They are caused by investor sourcing, valuation discussions, diligence requests, incomplete corporate records, or disagreements regarding key terms. Companies that maintain organized corporate records, understand their capitalization table, and engage counsel early are often able to complete fundraising transactions more efficiently.
Founders should also recognize that fundraising itself can be a lengthy process. Finding the right investors often takes significantly longer than documenting the investment once terms have been agreed upon. An experienced fundraising attorney can help streamline the legal process, identify potential issues early, and keep the transaction moving toward closing.

Friends & Family and Angel Investing

A friends and family round is often the first outside capital a business raises. In typical friends and family financing, founders receive investments from relatives, friends, colleagues, or other personal connections who are investing primarily because they believe in the founder rather than because they have conducted extensive diligence on the business.
Many founders make the mistake of treating friends and family investments informally. In our view, this is a mistake. Friends and family investments should be documented with the same care as any other financing transaction. Proper documentation helps establish expectations, reduce misunderstandings, and preserve personal relationships if the business does not perform as expected.
The appropriate structure depends on the company's goals and stage of development. Some friends and family rounds are structured as equity investments, while others use SAFEs, convertible notes, or loans. The optimal approach depends on factors such as valuation, future fundraising plans, ownership considerations, and investor expectations. An experienced fundraising attorney can help founders select an appropriate structure and ensure the transaction is properly documented and compliant with applicable securities laws.
The required documents depend on how the investment is structured. A friends and family financing may involve a SAFE, convertible note, stock purchase agreement, promissory note, subscription agreement, investor questionnaire, corporate approvals, and other supporting documentation.
One of the most common mistakes we see is founders relying on verbal agreements or informal email exchanges because the investors are friends or family members. In practice, these transactions often create more disputes than transactions involving sophisticated investors because the parties frequently have different expectations regarding ownership, control, repayment, or future involvement in the business.
Regardless of the size of the investment, the terms should be clearly documented and the transaction should be structured in compliance with applicable securities laws. Good documentation protects both the company and the investors while reducing the likelihood of future misunderstandings.
An angel investor is an individual who invests personal capital into a startup, small business, or growing company in exchange for equity, a SAFE, a convertible note, or another investment instrument. Angel investors are often among the earliest outside investors in a business and frequently invest before institutional investors become involved.
The rights received by angel investors depend on the size of the investment and the structure of the transaction. Common rights may include ownership interests, information rights, voting rights, inspection rights, preemptive or pro rata rights, participation rights in future financings, and certain protective provisions.
In our experience, founders often focus too heavily on valuation and not enough on investor rights. Two investment offers with identical valuations can have dramatically different long-term consequences depending on the governance and control rights being granted. Understanding those rights before accepting an investment is often just as important as negotiating the economics of the deal.
There is no universal answer because the appropriate amount depends on the company's valuation, stage of development, growth prospects, capital needs, and negotiating leverage.
In our view, founders should avoid thinking about fundraising solely in terms of how much money they need today. Every equity issuance permanently affects ownership of the company. Giving away too much equity early can make future fundraising more difficult, reduce founder incentives, and create challenges when bringing on employees, advisors, or future investors.
The better question is often not "How much equity should I give?" but rather "What is the company worth, how much capital do I need, and what ownership structure positions the company for future growth?" An experienced fundraising attorney can help founders evaluate the long-term consequences of a proposed financing and avoid unnecessary dilution.
Potentially, yes.
However, many founders incorrectly assume that raising money from friends, family, or other personal contacts is exempt from securities laws. In reality, most fundraising transactions involve securities laws regardless of who is making the investment.
Whether a company can accept investments from non-accredited investors depends on the structure of the offering, the applicable securities law exemption being relied upon, the number and type of investors involved, and other factors. The analysis is highly fact-specific.
In our experience, founders should never assume that a small financing round is exempt from legal requirements simply because the investors are friends or family members. Securities law compliance is often overlooked during early fundraising, but problems frequently surface later during due diligence, future financing rounds, acquisitions, or investor disputes.
An experienced fundraising attorney can help determine whether a proposed offering complies with applicable securities laws, prepare the necessary documentation, and structure the transaction in a way that minimizes regulatory risk while achieving the company's fundraising objectives.

Equity Financing and Ownership

The right structure depends on the company's stage, valuation, and fundraising goals. Equity financings provide investors with ownership immediately but typically require negotiating valuation and a more extensive set of legal documents. SAFEs and convertible notes are often used in earlier-stage financings because they allow companies to raise capital without immediately determining a valuation.
In our experience, founders are often too focused on getting money in the door and not focused enough on the long-term consequences of the financing structure they choose. SAFEs may be simpler and less expensive initially, but they can create unexpected dilution later. Convertible notes introduce debt-related considerations that many founders overlook. Equity financings provide more certainty but often require greater upfront negotiation.
There is no universally "best" option. The appropriate structure depends on the company's circumstances, future fundraising plans, and investor expectations. An experienced fundraising attorney can help evaluate the tradeoffs and select the structure that best aligns with the company's goals.
Dilution occurs when a company issues new equity, reducing the ownership percentage of existing shareholders. As new investors come into the business, founders and existing investors typically own a smaller percentage of the company than they did before the financing.
Dilution is not necessarily a bad thing. Most successful companies experience dilution as they raise capital and grow. The more important question is whether the value created by the investment outweighs the ownership being given up.
In our experience, founders often focus exclusively on how much money they are raising without fully understanding how future financing rounds may affect their ownership. Before accepting investment, founders should understand both the immediate and long-term dilution consequences of the transaction.
There is no standard percentage that works for every company. The appropriate amount depends on the company's valuation, stage of development, capital needs, growth prospects, and negotiating leverage.
In our view, founders should be cautious about giving away significant ownership early in the company's life cycle. While raising capital may be necessary, excessive dilution can create challenges during future financing rounds and reduce the founders' ability to control the company's direction.
The better approach is to determine how much capital the business actually needs, establish a reasonable valuation, and evaluate how the proposed financing fits into the company's long-term fundraising strategy. An experienced fundraising attorney can help founders understand the ownership and control implications of a proposed investment before they sign definitive documents.
Valuation is part finance, part negotiation, and part market reality. Investors typically evaluate factors such as revenue, profitability, growth potential, industry trends, intellectual property, management strength, competitive advantages, and overall risk. Early-stage companies may also be valued based on their team, product, market opportunity, and traction, even if they have limited revenue.
In our experience, founders often focus too heavily on maximizing valuation and not enough on finding a valuation that supports a successful financing. An unrealistically high valuation can make future fundraising more difficult if the company does not meet expectations.
The most effective approach is to evaluate the company's fundamentals, review comparable transactions where possible, and consider how the valuation will affect future fundraising rounds. An experienced fundraising attorney can help founders understand how valuation interacts with dilution, investor rights, and the overall structure of the financing transaction.

Investing and Investor Rights

Investors should conduct legal due diligence before investing, regardless of whether they are investing in a startup, small business, or more established company. At a minimum, investors should understand what they are buying, who owns the company, and what legal risks could affect the value of their investment.
Legal due diligence often includes reviewing the company's organizational documents, capitalization table, material contracts, intellectual property ownership, existing debt, litigation history, regulatory compliance, and prior financing arrangements. Depending on the industry, investors may also need to evaluate licensing requirements, data privacy practices, employment issues, or other sector-specific risks.
In our experience, investors often spend too much time evaluating the business opportunity and not enough time verifying the underlying legal foundation of the company. A great business can still be a bad investment if ownership is unclear, key intellectual property is not properly assigned, or significant liabilities are hidden beneath the surface.
Minority investors should focus not only on economics, but also on protection. While minority investors typically lack control over day-to-day operations, they can negotiate rights that help protect their investment and provide visibility into the company's performance.
Common protections include information rights, financial reporting rights, inspection rights, pro rata rights to participate in future financings, and certain protective provisions requiring investor approval before major corporate actions occur. Depending on the investment, investors may also negotiate board representation or observer rights.
In our view, sophisticated investors spend less time negotiating valuation and more time negotiating rights. A slightly better valuation is often less valuable than meaningful protections that help an investor monitor and protect their investment over time.
The biggest risk for many minority investors is not losing money. It is having no meaningful ability to monitor what happens after they invest. Once capital is invested, majority owners and management often control most business decisions.
For that reason, minority investors should focus on obtaining appropriate contractual protections before closing. These may include information rights, access to financial statements, inspection rights, pro rata rights, protective provisions, buy-sell mechanisms, and other governance protections depending on the transaction.
In our experience, investors should negotiate these rights at the beginning of the relationship. Once the investment closes, a minority investor's leverage is often significantly reduced. An experienced attorney can help identify appropriate protections based on the size and nature of the investment.
The most common risk is that the company is not what the investor believes it to be. This can include inaccurate financial information, ownership disputes, intellectual property issues, undisclosed liabilities, regulatory compliance problems, or contractual obligations that were not properly disclosed before the investment.
Investors also face governance risks. A company may perform well financially while still creating problems for investors if management lacks transparency, key decisions are made without investor input, or future financing rounds significantly dilute existing ownership.
In our experience, many investment losses can be traced back to insufficient diligence or inadequate investor protections. Investors should focus not only on the company's growth potential, but also on understanding the risks and negotiating appropriate safeguards before investing.
Additional fundraising is common, particularly for startups and growing businesses. While future financings may help the company grow, they can also affect existing investors by reducing their ownership percentage through dilution.
Whether an investor's ownership is diluted depends on the terms of the original investment and whether the investor has rights to participate in future rounds. For example, investors who negotiate pro rata rights may have the opportunity to invest additional capital and maintain their ownership percentage.
In our experience, investors should think about future fundraising before making an investment, not after. A company's capital needs rarely end with a single financing round. Understanding how future financings may affect ownership, control, and investor rights is an important part of evaluating any private investment. An experienced attorney can help investors negotiate protections that reduce the risk of unexpected dilution and preserve flexibility in future financing rounds.

Updated June 2026