Investing in a startup? A legal review before you sign or transfer funds
Investing in a startup can be a significant opportunity — but also a legal and financial risk. Before signing a SAFE, convertible loan, investment agreement or transferring funds — it's important to review the company, the founders, the rights, the shares, the intellectual property and the legal documents.
An investor looking to invest in a startup needs to review not only the business idea but also the company's legal situation: does the company exist, who the shareholders are, whether there is a founders agreement, who owns the intellectual property, what the term sheet includes, whether the investment is made via SAFE, convertible loan or shares, and what the investor's rights are. Adv. Zion Bahalul advises investors reviewing startup investments before signing or transferring funds.
Who is this page for?
You don't need to be a venture capital fund to get legal counsel. Even a relatively small private investor needs to understand exactly what they are signing.
Why is a legal review important before investing?
Legal checklist before investing in a startup
Document types an investor should review
Investment types you need to understand
Equity investment
The investor receives shares in the company at the time of investment. Important to check the share type, rights, dilution, voting rights and protections.
SAFE
The investor transfers funds now and receives shares in the future at a conversion event. Important to check Valuation Cap, Discount, MFN, conversion terms and additional rights.
Convertible Loan / CLA
The investment starts as a loan and may later convert into shares. Important to check interest, maturity, conversion event, security and conversion terms.
Bespoke investment agreement
In some cases a dedicated investment agreement is required, including representations, warranties, information rights, conditions precedent and protective mechanisms.
Common risks for investors
What can Adv. Zion Bahalul do for an investor?
Adv. Zion Bahalul can accompany private investors, business people and parties interested in investing in a startup — from the initial document review through negotiation and amending the investment agreement.
Frequently asked questions
Startup investment review before signing
Send your details and we'll check whether legal support is needed before signing, transferring funds, or receiving shares / SAFE / a convertible loan. The goal is to understand what's being offered, the risks, and what should be amended before the investment.
Your information is kept confidential and used only to review your request.
Adv. & Notary Zion Bahalul
A lawyer specializing in business-legal counsel for startups, founders, tech companies and investors. Extensive experience in investment agreements, SAFE, convertible loans, cap tables and investor-side review. Service in Hebrew, English and Spanish.
Read more about Adv. Bahalul →The information on this site is general information only and does not constitute legal advice. Each case depends on its circumstances, and it is recommended to obtain individual legal advice before making a decision or signing a document.