Investment Ready
Scott Sands, Partner and Head of Corporate at Slater Heelis Solicitors on how to prepare your business for funding
Securing investment can be transformative. It can fund growth, fuel innovation and take your business to the next level. Yet too many founders approach fundraising like Dragon’s Den, charging ahead with big promises, inflated valuations and generic term sheets, sometimes assembled without proper professional advice.
Becoming investment-ready is about more than delivering a strong pitch. It means protecting your interests, structuring the deal correctly and ensuring the business is set up for sustainable, staged growth. One of the most valuable early steps is speaking to a solicitor. The cost of not doing so can far outweigh the cost of getting it right at the outset.
Whether you are a high-growth start-up seeking seed funding or a scale-up preparing for private equity, there are five key areas to consider.
#1 Get your house in order
Due diligence is not just the investor’s responsibility; founders should be equally prepared. Investors will expect clean company records, robust contracts, clear ownership of intellectual property and a company structure that does not raise concerns.
A lawyer can quickly add value here. Are your articles of association suitable for investment? Do historic shareholder agreements or option schemes create future risks? Sorting legal housekeeping early reduces surprises later and makes the investment process faster and smoother.
#2 Structure the deal to protect you and the business
Large investment figures can be distracting, but founders must focus on the detail. Term sheets are usually non-binding, yet they set the tone and framework for the final deal. If you do not fully understand the terms, you may give away more control or value than intended, and negotiating changes later can be difficult.
Common pitfalls include excessive dilution, unnecessary preference rights or control provisions that transfer too much influence to investors too early. Protecting future value and maintaining flexibility is vital, particularly if this is only the first of several funding rounds. A clear and accurate share capital table is essential to help founders understand how many shares they are issuing and how much ownership they are prepared to dilute.
#3 Use the right tools
Many founders are unaware of legal structures designed to support early-stage investment. The Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) provide tax relief to qualifying investors, making opportunities more attractive and reducing perceived risk.
One particularly useful tool is the Advanced Subscription Agreement (ASA). This allows businesses to bring in funding quickly while waiting for SEIS or EIS approval or until a future funding round completes. ASAs are especially valuable during pre-revenue or product development phases when cash flow is tight and speed matters.
#4 Be realistic about valuation
In high-growth or technology sectors, companies often seek funding before revenue begins, making valuation less precise. However, unrealistic valuations can damage credibility. Investors are increasingly experienced, and inflated expectations may drive away strong investment partners. Conversely, undervaluing the business can mean giving away equity that will be needed later.
The aim is a valuation that recognises growth potential while ensuring founders and early teams retain sufficient ownership and motivation.
#5 Plan for future funding rounds
Investment is rarely a one-off event. Businesses raising capital through angel investors, crowdfunding or venture capital will often require multiple rounds before maturity or exit.
This means thinking ahead and planning backwards from eventual exit or long-term goals. Can your current corporate structure accommodate future funding? Are shareholder rights clearly defined? Is governance investor-friendly and transparent? Investors prefer clarity and forward planning, which builds confidence and supports long-term success.
Scott Sands is Partner and Head of the Corporate team at Slater Heelis Solicitors. He specialises in supporting high-growth businesses across investment, M&A, and corporate structuring.
T: 0330 111 3131
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