Startup & Venture · Priced rounds
Seed Round Counsel for Startups and Term-Sheet Review for Investors
A priced seed round is the first time your company sells preferred stock at a set valuation, and the documents you sign now set the template for every round after. We act as company counsel from term sheet to closing, or as investor counsel reviewing the terms. For African startups, we also handle the cross-border questions a U.S. lead investor will raise: the flip, local approvals and where the IP sits.
Two tracks
For companies: what is included
- Term-sheet review and negotiation with the lead investor's counsel.
- Financing documents: stock purchase agreement, amended and restated Certificate of Incorporation creating the preferred stock, and investor rights, voting, and right of first refusal and co-sale agreements, as the deal requires. We start from widely used industry model forms so investors' counsel recognises them.
- Conversion of outstanding SAFEs and notes, with a closing cap table.
- Option pool increase and plan amendment if required.
- Board and stockholder approvals and the Delaware charter filing.
- Disclosure schedule support and a closing checklist.
- Form D and state notice filings after closing.
What is not included
- Tax advice, and home-country legal work for a local subsidiary.
- A flip or major clean-up of past records, which is scoped separately on the flip page.
- Additional closings beyond those agreed, or a change of lead investor mid-deal.
- Disputes with shareholders or employees.
The scope is set out in an engagement letter, so you know before the term sheet is signed what is in and what would be extra.
For investors: term-sheet review
You receive a written memo on the term sheet within the agreed turnaround: what is market and what is unusual, the economic effect on your stake, the control rights you have and lack, and the company-level issues to resolve before closing. For an African company, we flag whether a flip is needed and what local approvals could delay closing. For full company review, add due diligence.
Key seed terms explained
| Term | What it does | What to watch |
|---|---|---|
| Pre-money and post-money valuation | Sets the price per share | Whether the option pool and converting SAFEs are counted in the pre-money |
| Option pool | Shares reserved for future hires | A pool sized in the pre-money dilutes founders, not new investors |
| Liquidation preference | Who is paid first on a sale | Multiple above one times, or participating preferred |
| Board composition | Who controls the board | Investor seats relative to founders and independents |
| Protective provisions | Investor veto over major actions | How broad the list is |
| Pro rata rights | Right to invest in later rounds | Thresholds and who qualifies |
| Right of first refusal and co-sale | Controls founder share sales | Exceptions for estate planning and small sales |
| Founder vesting | Shares earned over time | Whether vesting restarts, and acceleration on a sale |
| Anti-dilution | Adjusts price if a later round is lower | Broad-based weighted average versus full ratchet |
Cross-border rounds: flips and local approvals
A U.S. lead investor will usually expect to buy preferred stock in a Delaware parent. If your business still sits in a local company, the flip normally closes before or at the same time as the round, and local exchange-control or registry steps can set the timeline. We plan the two together so the investor's closing conditions match what your home-country counsel can deliver.
Form D and government fees
| Filing | Fee | Notes |
|---|---|---|
| SEC Form D (Regulation D offerings) | No SEC filing fee | Due within 15 days after the first sale; filed online on EDGAR (SEC) |
| State notice filings | Varies by state | May be required where investors live; we check |
| Delaware amended and restated charter | Set by Delaware | See the current fee schedule |
From term sheet to closing
- Term sheet reviewed and negotiated; closing conditions identified.
- Records review: cap table, SAFEs, notes, option grants, IP assignments.
- Draft financing documents and circulate to investor counsel.
- Negotiate, prepare disclosure schedules, and obtain board and stockholder approvals.
- File the amended charter in Delaware, sign and close; investors fund.
- Issue shares, convert SAFEs and notes, update the cap table, file Form D.
Common problems
- Unmodelled SAFEs that convert into more of the company than founders expected.
- Missing IP assignments or undocumented option promises found in diligence.
- A local operating company that has not flipped when the investor wants to close.
- Disclosure schedules prepared at the last minute.
Founder visas
Forming or restructuring a U.S. company does not give anyone a visa or permission to work in the United States. Founders who want to live and work here need their own immigration strategy, and the company structure you choose now can help or hurt it later.
- E-2 treaty investor. The State Department's treaty country list shows E-2 treaties with Morocco, Senegal, Egypt, Tunisia and Cameroon, and E-1 and E-2 treaties with Togo and Liberia. Founders who are nationals of those countries can look at the E-2 treaty investor visa.
- O-1 extraordinary ability. Nigeria, Ghana and Kenya do not appear on that treaty list. Founders from those countries more often look at the O-1 visa, which turns on the founder's own record rather than nationality.
If a founder's petition is delayed or denied, see the federal-court options for E-2 denials and O-1 denials.
Who handles your matter
DC Federal Litigation PLLC performs the U.S. corporate and venture work on this page itself, from our office at 1717 N Street NW, Washington, DC, for founders and investors wherever they are. Meetings and signing happen remotely, so you do not need to travel.
We advise on U.S. law: Delaware corporate law, the U.S. transaction documents and the federal securities filings that go with them. We do not advise on the law of your home country, and we do not give tax advice. Where those questions arise, we work alongside your home-country counsel and your tax adviser, and we say in writing at the start which questions belong to them.
Before any work begins you receive an engagement letter that sets out the scope of the work, what is included and what is not.
Frequently asked questions
What drives the cost of closing a seed round?
The legal work scales with the number of investors, whether SAFEs or notes convert, the state of your records and whether a flip is involved. Delaware charges a filing fee for the amended charter, and Form D carries no SEC fee. Investors' counsel fees are often paid by the company up to a cap set in the term sheet. Our legal fees are set out in writing in your engagement letter after we review your case.
How do you keep a priced round from growing in scope?
By defining the scope up front. Ours assumes standard model-based documents, one lead investor and one closing, and lists exclusions such as a flip, a records clean-up or a change of lead. If the deal changes, we tell you before doing extra work and agree any change in writing.
Which documents does a priced seed round use?
Usually a stock purchase agreement, an amended and restated Certificate of Incorporation creating the preferred stock, an investor rights agreement, a voting agreement, and a right of first refusal and co-sale agreement, plus board and stockholder consents. Smaller rounds sometimes use a shorter document set. We start from widely used industry model forms.
How long does closing take?
It depends mostly on how clean your records are, how quickly the investor's counsel responds and whether a flip or local approvals are involved. We give a written timeline after the records review. Form D is due within 15 days after the first sale.
What should an investor look for in a seed term sheet?
Price and how the option pool and converting SAFEs affect it, liquidation preference, board seats, protective provisions, pro rata rights and founder vesting. For a cross-border company, add the entity: is the investment going into a Delaware parent, and are local approvals needed before closing? Our review memo covers each.
Do we need to flip before a U.S. investor will lead our round?
Often, yes. Most U.S. lead investors expect to buy preferred stock in a Delaware corporation. Some will invest in a foreign company, but on documents under that country's law. If a flip is needed, plan it with the round so the timelines align. See Delaware flip for African startups.
Can you represent the company and the investor in the same round?
No. The company and its investors have opposing interests in a financing, on price, control and protections. We act for one side only, confirmed by a conflict check at intake. If we represent the company, the lead investor will have its own counsel, and the term sheet often says who pays that counsel's fees.
What happens to our SAFEs at the seed round?
They convert into preferred stock at the price set by their cap or discount, and they are counted in the closing cap table. Investors negotiate whether converting SAFEs fall in the pre-money valuation, which affects founder dilution. We model this before the term sheet is signed.
Bring us your term sheet
Whether you are raising or investing, send us the term sheet. We identify the issues, the closing path and the scope of work. Start with a paid consultation. If you engage the firm within 30 days, your consultation fee is credited in full toward your initial retainer.