Fundraising: which legal documents to prepare with your lawyer

Preparing fundraising legal documents in advance saves weeks and avoids painful renegotiations. This practical guide details, step by step, the documents a business lawyer prepares with you to secure a transaction (seed, Series A, bridge) under French law.

1) Prepare the foundations before negotiations

Business plan, executive summary and pitch deck

These non-legal but essential documents set out the story, market, KPIs, funding need, use of funds and target valuation. They must be mutually consistent and withstand due diligence questions. Resources from Bpifrance help formalise your financial assumptions and calibrate your round.

Cap table and dilution table

The capitalisation table (before/after) is the basis of every discussion. It must include existing instruments (BSPCE, BSA, convertible bonds), commitments granted, and the projected employee pool. A credible dilution simulation prepares you for sticking points with investors.

NDA/confidentiality agreement and data room

A well-calibrated NDA governs exchanges. Remember that it does not remove the need to comply with the GDPR when sharing information (salaries, client data, etc.) in a data room. Consult the principles of the CNIL to define your legal bases, minimise data and control access.

Preliminary legal housekeeping

Before opening the data room, check: up-to-date articles, registers (securities/decisions), signed key contracts, founders’/contractors’ intellectual property assignments, trade marks and software. To secure intangible assets and filings, use the INPI. A preliminary audit accelerates the next stage — see our guide to preparing your startup for investor due diligence.

2) Letter of intent / Term sheet: the negotiation framework

The term sheet (or LOI) sets key parameters: valuation (pre‑money), amount, timetable, exclusivity, governance, financial rights (liquidation preference, anti-dilution), conditions precedent and instruments used. In principle it is non-binding as regards the investment itself, but its confidentiality, exclusivity (no‑shop) and sometimes governing-law/jurisdiction clauses are binding. To explore the issues line by line, see our guide to understanding and negotiating a term sheet.

On the regulatory side, public-offering and prospectus rules derive from Regulation (EU) 2017/1129, with exemptions (e.g. an offer to fewer than 150 non-qualified persons per Member State, or a limited total amount over 12 months). The text is available on EUR‑Lex and guidance on the AMF website (“fundraising” section). If unsure (teaser, expanded private placement, marketing communications), have your lawyer validate your disclosure strategy against the AMF’s fundraising guidelines.

3) Formalising the investment package

Shareholders’ agreement (governance and liquidity)

The shareholders’ agreement organises governance, reporting, transfer-approval/pre-emption clauses, exit rights (tag/drag), anti-dilution, liquidation preference, founder vesting, non-compete obligations and information rights. The robustness of this document shapes post-funding life. Review sensitive points with our analysis of the essential clauses in a shareholders’ agreement.

Financing instrument

• Capital increase (new shares + share premium): the “standard” route for an equity investment.
• Convertible bonds (OC), BSA‑AIR/convertible notes: useful for a bridge or accelerating closing, with a discount, cap and conversion events. Compare the mechanisms in our guide: BSA‑AIR and convertible bonds: how they work.
• Employee BSA/BSPCE: not to be confused with investor securities; consider the pre-money pool.

For securities, general principles are set out in the law in force and, for markets and public offerings, in the French Monetary and Financial Code — Book II.

Corporate documentation and conditions precedent

• Minutes (shareholders/management body) authorising the transaction, with any disapplication of preferential subscription rights (DPS) and delegations.
• Updated articles (voting rights, preference shares, governance).
• Investment/issuance agreement, subscription forms, certificates of payment of funds.
• Updating registers (securities transfers, decisions) and filing formalities through the single window. See the dedicated guidance on Service‑Public Pro.

To navigate the legal mechanics (SAS/SARL) without pitfalls, follow our guide to the capital increase procedure and pitfalls to avoid.

Representations and warranties

Investors will require representations and warranties (financial position, IP, litigation, compliance). Depending on perceived risk, a price retention or temporary escrow may be negotiated. The level of detail in the warranties depends on due diligence findings.

Funds flows and AML/CFT compliance

Plan payment arrangements (escrow, calls for funds, tranches). The institutions involved apply know-your-customer and anti-money-laundering obligations (LCB‑FT) under the French Monetary and Financial Code. Anticipate supporting documents (investor KYC, source of funds).

4) Investor due diligence: what you will be asked for

Expect legal, financial, tax, employment and technical due diligence. On the legal side: articles, K-bis, registers, commercial and critical supplier contracts, leases, loans, signed cap table, NDAs, disputes, GDPR compliance (records, DPAs, risk assessments), intellectual property rights (filings, assignments, licences). To accelerate the audit, follow our method in Legal due diligence: preparing for the investor audit and, for the data room, follow the recommendations of the CNIL.

5) Disclosure and prospectus rules: watch the scope

In France, fundraising from a restricted circle of qualified investors generally does not require a prospectus. However, extending it to a broad audience may trigger obligations under the Prospectus Regulation (EU) 2017/1129. Check your exemptions (thresholds, investor categories) on EUR‑Lex and the guidance from the AMF. If in doubt, have your materials (teaser, widely circulated pitch deck, website) validated to avoid reclassification as a public offering.

Summary document checklist

• Up-to-date pitch deck, executive summary, business plan and capitalisation table.
• NDA and structured data room (restricted access, logs, GDPR taken into account).
• Term sheet/LOI with valuation, governance, financial rights, conditions precedent and exclusivity.
• Shareholders’ agreement including transfer approval, pre-emption, tag/drag, anti-dilution, liquidation preference and vesting.
• Instrument: capital increase (preference shares if needed) or OC/BSA‑AIR with cap, discount, maturity and conversion events.
• Meeting/decision minutes, updated articles, subscription forms, registers, Service‑Public Pro filings.
• Warranties/representations package, schedules (cap table, contract list, IP).
• AML/CFT/KYC evidence under the applicable law.

Common mistakes to avoid

• Ambiguous term sheet (no timetable, no exclusivity, or unclear financial rights) — a source of renegotiation.
• Shareholders’ agreement inconsistent with the articles (interpretation conflicts and unenforceability risks).
• Forgetting the pre-money BSPCE pool, causing unexpected founder dilution.
• Ignoring the GDPR in the data room (excessive sharing of personal data) — check with the CNIL.
• Incorrect classification of the offer (overly broad communication) under the Prospectus Regulation — refer to the AMF.

Timelines and post-closing formalities

Allow 6 to 12 weeks from the first meeting to closing, excluding complex cases. Capital increase formalities (filing instruments, updating registers, publicity) are detailed by Service‑Public Pro. For post-funding disputes (performance of the agreement, governance), contact the guidance service at Justice.fr.

Brief FAQ

Is a term sheet legally binding?

In principle, not as regards the obligation to invest, but yes for confidentiality, exclusivity (no‑shop), governing-law/jurisdiction clauses, and sometimes transaction costs. See our guide to negotiating a term sheet.

Is an AMF prospectus required for private fundraising?

No, if you remain within the exemptions under Regulation (EU) 2017/1129 (e.g. qualified investors, thresholds). Validate the scope with your lawyer and refer to the AMF.

Which documents do investors actually sign?

The investment/issuance agreement, shareholders’ agreement, subscription forms and, where applicable, specific instrument-related agreements (OC, BSA‑AIR). Minutes and updated articles complete the closing.

How long does a capital increase take?

Generally 2 to 4 weeks for decisions, signatures and formalities if the documentation is ready. Follow the detailed procedure and pitfalls to avoid.

This guide does not replace tailored advice. If unsure about regulatory scope (AMF/Prospectus), data protection (CNIL) or formalities (Service‑Public Pro), seek specific advice.