Venture Capital & Growth Financing Law in Canada

Startups, and emerging businesses regularly raise external capital to fund expansion, product development, and market entry. The appropriate financing structure depends on the company’s stage, leverage, and long-term objectives.

Early-stage companies often raise capital through SAFEs or convertible notes, while more established businesses typically pursue priced equity rounds, such as seed or Series preferred financings, led by venture capital investors. Each stage introduces different legal, governance, and economic considerations that must be managed carefully.

At Shekarian Law PC, we advise founders and investors through venture capital transactions using established CVCA model documents, as well as customized agreements where the business requires tailored solutions.

Stages of Financing

1. Bootstrapping & Friends-and-Family: At the earliest stage, founders often rely on personal savings or capital raised from family and close contacts to validate the business model. These rounds typically prioritize speed and flexibility but must still be structured carefully to avoid future governance or tax issues.
2. Early-Stage Financing: Early-stage rounds are designed to fund product development, initial hiring, and early market entry. Financing is commonly raised through SAFEs, convertible notes, or seed equity rounds, often involving angel investors or early-stage venture funds.
3. Growth & Institutional Rounds: As companies scale, capital is raised through priced equity rounds such as Series A, B, or later-stage preferred share offerings. These rounds introduce more complex governance rights, investor protections, and exit considerations, requiring disciplined legal structuring.

Common Financing Structures:

SAFE (Simple Agreement for Future Equity): A flexible early-stage financing instrument that allows investors to convert their investment into equity at a later valuation event. SAFEs are commonly used in startup financing due to their speed and reduced upfront complexity.

Convertible Debt: A loan that converts into equity upon a future financing round or maturity date. Convertible notes introduce interest and maturity considerations, making them more structured than SAFEs.

Royalty-Based Financing: An alternative financing model where investors receive a percentage of future revenues until a predefined return is achieved. This structure may be suitable for revenue-generating businesses seeking non-dilutive capital.

Seed or Series Preferred Share Offerings: Priced equity financings that establish company valuation and allocate preferred rights such as liquidation preferences, board representation, and protective provisions.

Bank and Commercial Loans: Debt financing provided by financial institutions, typically requiring collateral, revenue history, or personal guarantees.

What Our Financing Legal Services Include

Fundraising strategy & structure

• Choosing the right instrument for your stage and goals
• Cap table planning and dilution visibility (high-level, legal side)

Term sheets & negotiation

• Drafting/reviewing term sheets and advising on key terms
• Negotiating economics, control, and investor protections

Convertible instruments

• SAFE agreements (including valuation cap/discount mechanics)
• Convertible notes (interest, maturity, conversion triggers, security)

Equity rounds (priced rounds)

• Preferred share financings and subscription agreements
• Share rights and investor protections
• Closing mechanics and conditions precedent

Governance & compliance

• Board composition, voting thresholds, reserved matters
• Shareholder agreements and investor rights
• Corporate records and minute book hygiene

Due diligence & closing

• Legal diligence readiness and data room organization
• Closing checklists, filings, and post-closing updates

Fees and Scoping

Financing work is typically scoped based on the instrument (SAFE/note vs priced round), negotiation intensity, number of investors, and timeline constraints. We can structure engagements as:

• fixed-fee term sheet review (where suitable)
• phased scope (term sheet → docs → closing)
• hourly for complex or fast-moving negotiations

We confirm scope and pricing before we start so you know what’s included.

Ready to Raise or Invest with Confidence?

Whether you’re raising capital or investing in a Canadian company, we help you structure the deal, negotiate terms that make sense, and close efficiently—so today’s round doesn’t create tomorrow’s problems.

Book a Consultation

Or send your term sheet for a structured review.