Helped Clients Recover Over $25 Billion. Since 1979.
Helped Clients Recover Over $25 Billion. Since 1979.
You have identified investors who are ready to commit funds to your business. The next step is to follow a clear investor onboarding process that ensures every investment is properly documented, recorded, and compliant with legal requirements.
These steps apply whether the founders are handling the documents on their own or if their attorney is managing the process on their behalf.
A structured approach protects the company, builds investor trust, and sets the foundation for future growth. Whether the business is structured as a corporation or LLC, these are the key steps to follow.
The investor onboarding process begins with delivering a complete investment package to each prospective investor. This typically includes documents prepared by your attorney, such as:
At this stage, it is critical not to accept any funds from investors until the necessary legal documents have been fully drafted and executed. This is also an optimal time to confer with your attorney regarding the proper entity structure and the type of stock or units to be issued. Taking these steps before money changes hands helps protect the company and keeps the transaction compliant.
These documents should be delivered securely, either by email or through a secure file-sharing platform. The communication should clearly state:
One item many early founders miss in this process: it’s important to confirm how each investor will hold their interest, whether individually or through an entity such as a trust, corporation, or LLC. If an entity is used, obtain the exact legal name and the name and title of the authorized signatory to avoid issues at closing.
Once investors submit their documents, the company should:
Following up quickly on incomplete or inconsistent documentation keeps the investor onboarding process moving smoothly and helps avoid delays at closing.
Investors typically send funds by wire or check as outlined in the investment package. Once received, funds should be deposited promptly.
While not typically legally required, maintaining a separate bank account for investor funds is considered a best practice. It simplifies accounting and creates a clear audit trail. The company should also maintain a ledger showing each investor’s contribution amount and date received.
Once funds clear:
Accurate recordkeeping is central to the investor onboarding process. It ensures ownership percentages and contributions are properly documented from the start.
When the target raise is achieved or the offering period ends:
Timely compliance filings help protect the company and reduce regulatory risk.
After closing, the investor onboarding process continues. The company should:
Maintaining clean, organized records supports future fundraising rounds and builds investor trust.
An organized investor onboarding process does more than simplify administration. It:
While some founders can handle these steps on their own, having experienced attorneys manage the process provides a significant advantage. Attorneys can identify and address potential issues early, ensure filings and agreements are properly executed, and create a clear, defensible record of the raise. This not only protects the company but also builds credibility with current and future investors.
When handled correctly, onboarding investors becomes a predictable and efficient process that supports the company’s long-term growth.
Raising capital involves more than collecting checks from investors. It requires careful planning, precise documentation, and compliance with complex securities laws. The Schenk Law Firm has worked with hundreds of founders and business owners to manage the investor onboarding process from start to finish.
Our team can:
Whether you are raising your first round or managing a more complex offering, we help make the process efficient, compliant, and investor-ready.
To learn more about how we can support your capital raise, contact The Schenk Law Firm.