Got Investors? Well, you probably have more headaches than you bargained for. Having investors in your project, company or partnership means that you have lots of people to please, and keep track of! If you have raised money for your company, partnership or project, you have made great strides towards your commercial goal, whether that is buying real estate, selling products, or investing in that new start up company that is going to be the hottest thing since APPLE! Raising money is fun and most Investors are enthusiastically giving their funds so that they can be on the ground floor of an exciting project or company. However, once you get down to brass tacks, sometimes it becomes clear that you might have bitten off more than you can chew. Especially when the project starts to get bogged down in red tape, there are more expenses than you anticipated and more cash seems to be hemorrhaging out of the company than you predicted. It is very hard to become profitable in one year, or even two years with start-ups.
It is that start-up phase which may turn your enthusiastic Investors grumpy. And then the complaining starts. Sometimes, even though you give them all of the information as to what is happening, these grumpy Investors start to get aggressive and demanding. Some of them even might complain to the Texas Securities Board, or the Texas Attorney General alleging that they were defrauded or wronged and they want their money back. You could even get a “demand” letter from a lawyer representing these Investors.
So what to do? This is a very bad situation to be in and we want you to call us BEFORE you do anything to respond. An angry group of Investors is perhaps the worst thing that can happen to you and your new company or partnership. In fact, few people realize that it is actually a felony for money to be raised without strict compliance with federal and state securities laws. These laws are complex and are indeed, a trap for the unwary. In fact, we encourage everyone to seek competent legal advice BEFORE taking any cash into your start up company or for your pet project. We want our clients to be successful, but raising funds in the wrong way can derail you for years and in ways you never expected. Call me, Bonnie Spencer at 713-961-7770 or contact us by email and we can discuss your issues.