Capital Raise Due Diligence & Compliance FAQ
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Legal Answers for Founders, Fund Managers & Investors Raising Capital
Raising capital without legal missteps is essential to protecting your company, preserving investor confidence, and avoiding future regulatory or litigation risks. At LawVisory, we guide startups, funds, and private issuers through the complex legal and compliance landscape of private offerings, fundraising, and due diligence.
Below are the most common questions we hear from founders and managers navigating capital raise strategy.
Legal Structures & Planning
The most common fundraising entities include:
- LLCs with membership interests
- C-Corps (especially for venture capital or stock options)
- Series LLCs for multi-asset structures
- Fund vehicles like LPs or offshore feeder funds
The right structure depends on your tax goals, investor type, and funding strategy. LawVisory helps determine the optimal setup and handles formation end-to-end.
Not necessarily. Most private capital raises rely on registration exemptions like:
- Regulation D (Rule 506b or 506c)
- Regulation CF (crowdfunding)
- Regulation A+ (mini public offering)
- Regulation S (non-U.S. investors)
Each exemption has specific requirements. LawVisory ensures you choose and document the right exemption.
Yes—under Regulation S, you can raise capital from non-U.S. investors without SEC registration, provided the offering complies with offshore solicitation rules. Cross-border raises require extra care, especially with KYC, tax compliance, and securities laws abroad.
Investor Documentation & Filings
Typical documents include:
- Private Placement Memorandum (PPM)
- Subscription Agreement
- Investor Questionnaire
- Operating or Shareholder Agreement
- Risk Disclosure Statements
LawVisory drafts, reviews, and files all documentation in line with SEC and investor expectations.
Form D is a notice filing required by the SEC when you raise funds under Regulation D. It must be filed within 15 days of the first sale of securities. We prepare and file Form D as part of all Reg D offering packages.
- This document helps confirm whether an investor is accredited, as required under Rule 506. It protects the issuer and documents regulatory compliance. LawVisory provides SEC-compliant investor questionnaires and helps with verification protocols.
Due Diligence for Capital Raises
Legal due diligence is the process of reviewing your company’s structure, contracts, IP, finances, regulatory filings, and risks before investors commit capital. It helps avoid red flags that can delay or sink a deal.
Common requests include:
- Cap table
- Formation docs (Articles/Bylaws/LLC Agreement)
- Tax returns and financials
- Material contracts
- Regulatory filings (Form D, state notices)
- IP ownership or licensing documentation
LawVisory helps organize your data room and ensure legal readiness.
The top risks include:
- Improper solicitation or general advertising under the wrong exemption
- Failure to verify investor accreditation
- Missing or inaccurate Form D filings
- Misrepresentation or omission of material facts
These can lead to investor lawsuits or SEC enforcement. We mitigate all of these risks through structured documentation and legal review.
Post-Raise & Investor Compliance
Yes. Most U.S. states require “blue sky” filings (state notice filings) even if you're relying on a federal exemption. LawVisory handles multi-state filings and annual renewals.
Q:Can I reuse my documents for future rounds?
A: Not always. Each round (SAFE, Seed, Series A, etc.) may involve different terms,
Not always. Each round (SAFE, Seed, Series A, etc.) may involve different terms, exemptions, or investor classes. Existing documents may need to be updated to reflect valuation, governance changes, or rights.
Late or missed filings can still be submitted, but regulators may view this as a red flag. You’ll need to assess whether any rescission offers or remediation steps are necessary. LawVisory can guide you through corrective filings and investor communications.
Litigation & Regulatory Defense
You may face arbitration, mediation, or formal SEC scrutiny. LawVisory helps:
- Review investor claims
- Coordinate defense strategy
- Represent in arbitration or negotiate settlements
- Mitigate reputational and regulatory fallout
Yes. We provide legal representation in civil, regulatory, and administrative proceedings involving fundraising, investor disputes, or alleged misrepresentations. We also coordinate with specialized securities litigation counsel when needed.
Ongoing Legal Support
Yes. Our fractional GC or CLO service gives your firm continuous access to strategic legal guidance—ideal for startups, private funds, and family offices raising capital in multiple rounds or jurisdictions.
We offer:
- Flat-fee raise packages (Form D, docs, filing)
- Hourly legal support for ad-hoc due diligence
- Monthly GC retainers with 5–15 hours of legal coverage
We tailor pricing based on your needs, raise size, and jurisdiction.
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