If you’re creating a Florida startup, or you’re thinking about creating one, you’ll need a few things to be successful. In no particular order, these are: a little bit of luck, a great deal of intestinal fortitude, and some money. Oh, you’ll also need a lawyer. Here’s why:
A 2017 analysis of new business creation ranked South Florida first in the nation for new startup activity. Specifically, as reported by the Miami Herald, the Miami-Fort Lauderdale area “ranked No. 1 among the 40 largest metro areas in the U.S.,” in the Kauffman Foundation’s 2017 Index of Startup Activity, topping Austin, Texas, for the first time.
This means there’s lots of competition for resources – especially money. At Eskander Loshak LLP, our business attorneys can provide the legal support you need to secure the initial funding to get your business off the ground. Specifically, we can help you identify which legal documents you’ll need and draft them for you. Depending on your unique circumstances, these may include one or more of the following:
- Convertible Term Sheets – Which specifies terms such as the interest rate, maturity date and discretionary conversion at that time, price cap, and so forth if your startup has less than $1 million in preliminary or opening stage investments.
- Simple Agreement for Equity (SAFE) Agreement – If your startup is not yet generating revenue, this is the document that summarizes the terms under which investors will get shares in the company in the future, including incentives, but exclusive of valuation, share prices or maturity dates.
- Keep It Simple Security (KISS) Agreement – Includes investment options based on debt or equity. The former specifies the conditions for accrual of interest at 5 percent; maturity at 18 months; and conversion to preferred stock if your business raises $1 million in the ensuing qualifying round of fundraising. The latter does not include interest rates and specifies provisions for equity securities including maturity at 18 months and automatic conversion into equity contingent upon the receipt of $1million in new funds during the next round of financing.
- Promissory Note — A succinct statement including all of the terms for repayment of the investment.
If you’re new to the game, you’ll also need someone who can introduce you to the right people and knows how to make those introductions. In other words, you need someone who can connect you with potential investors at the right time, in the right way. As attorneys with a proven track record in real estate and business law, we have developed the key relationships and skills necessary to facilitate this process.
For more specific information about how we can help if you’re launching a startup in Florida, contact us today.