Finance and Securities Offerings 

Every growing venture requires capital at various stages of development: for start-up costs, to grow infrastructure or staff, to increase sales and marketing, to enter new markets, to make acquisitions, to cover cash flow shortfalls, or to grow to scale. 

 

At Bromberger Law, we understand private finance transactions and the laws that govern them. More importantly, we understand that raising capital is both an art and a science; the art is in setting the terms of the deal, and the science is in documenting things correctly. 

 

We have experience with a wide range of private financing transactions such as equity offerings and debt offerings, representing companies and investors alike. We understand how a social mission affects these transactions, how to balance economic interests with other interests, and how to document everything in ways that are clear and avoid misunderstandings. 

 

Social ventures most often raise capital through private financings such as stock sales, loans, convertible loans, SAFES, and other kinds of profit participation arrangements. These are often done in “investment rounds,” where multiple investors provide capital at the same time on the same terms. For nonprofits, which don’t have owners and cannot issue shares, financings usually involve loans, restricted gifts, or recoverable grants.  In hybrid structures, a social venture can have its cake and eat it, too, by taking tax-deductible contributions through a nonprofit, and investing those funds in the for-profit, in a joint venture alongside other investors, in another company, or providing loan guarantees or credit enhancements, opening up other possibilities for creative finance.

 

Private finance transactions can be simple or complex, depending on circumstances. Small deals can usually be done fairly simply and easily, but more significant transactions require greater time and effort. Federal and state securities laws regulate almost every aspect of these transactions, and compliance is critical, so experience and attention to detail are important. 

 

We advise our clients through the entire fundraising process, from initial conversations with investors through negotiations, preparation of documents, and due diligence to closing and post-closing matters. We start from the premise that all parties want the venture and transactions to be successful. Still, they have different interests and needs to be accommodated, which happens through negotiation. Those negotiations often result in term sheets (including social term sheets), which in turn lead to letters of intent, offering circulars, private placement memoranda, and definitive documents such as loan agreements, convertible notes, share purchase agreements, subscription agreements, SAFES, and program-related investment agreements. The legal and financial arrangements described in these documents are the foundations upon which the venture is built, and they had better be right!

 

Because of our experience with social ventures, and our focus on “win-win” outcomes, we can recommend ways to strike a balance between the interests of the company, the founder and the investor that meets everyone’s needs, especially where a social mission is involved. We know how to create legally enforceable obligations around mission while protecting everyone’s interests. We work with the lawyers on the other side to make sure the terms are clear, the proposed transactions make sense, complying with the law and best practices and reflecting the parties’ agreements with no tricks or surprises. And most importantly, when it is all done, our clients are satisfied and can look forward to a bright future.