Guests On Raleigh Founded Podcast, Smith Anderson Trio Advises on Traps and Pitfalls that Startups Face
"Legal virtuosos" Josh Diver, Merrill Mason and Mike Saber joined Raleigh Founded on its Founded Connect podcast, “Legal Traps for the Unwary Founders” and shared their wealth of experience to help entrepreneurs avoid the traps and pitfalls that many face while navigating the start-up and growth phase of business.
The attorney trio has dedicated their careers to assisting startups, entrepreneurs, investors and founders, and navigating the intricate realm of mergers and acquisitions. Among their advice: Don’t fear risk; ask for help when you need it; meet with as many as investors you can; and a “no” isn’t a failure, because it can lead to other leads through referrals.
From the beginning, fundraising is a fulltime job, Merrill said, and it’s important for startups to keep sight of operational issues. It’s also crucial that in talks with investors, startups define how much they are going to raise and what they are going to with do it.
"What milestones are you going to reach and what is your worth on the backside?" Merrill said.
Mike said one mistake startups makes is over valuing their companies. They need to seek out the highest investors, they think, because that will set them up for success. But they have to be realistic about the valuation of their business, because an inflated one can backfire.
A startup/investor relationship is akin to a marriage, the attorneys said. The whack-a-mole process in finding the right investor includes vetting them and contacting other companies the investor has worked with. Startups should inquire how things are working out for both sides, particularly when things go south. The more conversations startups and investors have, the more they are going to learn about each other’s goals, and that leads to the right decisions.
“Be inquisitive not just about the check the investor can write, but also the relationships and the input they can have as a partner going forward in terms of post-investment, really trying to bring the business to the next level and viewing investors as a long-time strategic partner, not just financial investors,” Josh said
The trio noted that attorneys are crucial to review documents involving startups and investors to avoid future issues that could cause cracks in the partnership. With extensive experience representing technology and life sciences companies, Merrill works with companies on their corporate transactional activity, including mergers and acquisitions, venture capital, capital-raising financings.
Josh practices start-up, venture capital, M&A and securities law, assisting entrepreneurs, founders and angel, venture and private equity investors, and Mike works with companies on their corporate transactional activity, including mergers and acquisitions, venture capital, capital-raising financings, technology transactions and other mission critical matters.
The entire podcast can be heard here.
About Founded Connect
Founded Connect is a podcast produced by Raleigh Founded, where resource providers in the Triangle talk about their services, provide valuable insight and answer frequently asked questions regarding their area of expertise for the entrepreneurial community.