Navigating Business Change with Confidence: Building the Legal Foundations for Growth

By Katie Selves

Is your business legally ready for investment? 

Raising investment is a defining moment for any business. It signals ambition, growth, and the next chapter of your journey. Investors want to put their money into credible, sustainable businesses that are well-managed and ready to scale, and undertake due diligence to gain a clear, comprehensive understanding of the business they’re considering backing.  

However, all too often legal work in an investment transaction is limited to due diligence, and seen as a transactional box-ticking exercise - something to be rushed through once a term sheet lands.  In reality, the legal foundations you lay in the months (or even years) before investment can shape the outcome of the deal, the valuation, and your future control of the business. 

In my experience, strategic legal involvement prior to a transaction enables you to optimise the elements of your business that are essential to revenue and future growth, be that commercial terms, IP protection or your people, and frees up your leadership team to focus on what they do best.  

If you’re considering future investment, here are the legal foundations for growth you should be building now:  

Ownership: Your cap table should be clean, accurate, and fully documented. Any ambiguity around shareholdings - especially founder equity, early-stage investors, or unallocated options - can raise red flags. Now is the time to resolve informal arrangements, and to separate the founder’s affairs from the business if that’s not already been done. 

Founders’ Agreements and IP Ownership: Investors want to see that the founding team is aligned and that the business owns its core assets. If intellectual property (IP) was developed by founders, contractors, or third parties, ensure all rights have been properly assigned to the company. I’ve seen due diligence processes drag on for months due to small issues, such as domain names being registered in the name of an individual, rather than the business.  Getting these issues in order now saves time (and cost) further down the road when you’ll want to be focused on getting the deal done. 

Commercial Contracts: Review your key customer, supplier, and partner contracts. Are they in writing? Have they been signed or accepted by the other party?  Do they include appropriate limitations of liability, termination rights, and confidentiality provisions? Are there change-of-control clauses that could be triggered by an investment? Do your current templates reflect your ambitions? These details matter, and no-one wants to be chasing down a key client to sign a contract just to get investment over the line.   

Employment and Incentives: Ensure employment contracts are up to date, legally compliant, and reflect current roles and seniority. Investors will want to ensure that your key people are engaged and committed to the business, so as well as ensuring restrictive covenants are appropriate and enforceable, consider any negative employee engagement feedback or poor performance, and deal with any issues now.  Ensure you have the right processes to deal with employee issues swiftly but fairly to mitigate future risk, and that your managers are trained on how to use these procedures.

Governance and Compliance: From statutory registers to data protection policies, the basics matter. A well-governed business signals maturity and reduces perceived risk. If you haven’t already, consider implementing a formal board structure, documenting key decisions, and ensuring you can demonstrate how you comply with regulations governing your industry.   

Horizon Scanning and Risk Anticipation: Investors are not just interested in where your business is today - they want to know that you’re looking ahead. Horizon scanning is a critical part of legal and strategic readiness. It means actively monitoring the regulatory, commercial, and geopolitical landscape to identify emerging risks and opportunities. Whether it’s upcoming changes in employment law, data protection regulation, or sector-specific compliance, demonstrating that your business is alert, informed, and proactive in its risk management can significantly enhance valuation and investor confidence. 

The Value of Strategic Legal Leadership 

Legal readiness isn’t just about having the right documents in place - it’s about being prepared, proactive, and transparent.  It’s about showing investors that you’ve built a business with strong foundations and a clear path to scale.  Investing in strategic legal leadership to build these foundations, and help you prepare for exit, will demonstrate the professionalism of your business so you can maximise valuation.  

This kind of strategic legal input doesn’t require a full-time hire, but it is about having the right legal leadership at the table.  Someone who understands the nuances of your business model, can anticipate concerns, and is comfortable working alongside executives and investors.  

I help businesses navigate change complexity with confidence. If you're preparing for investment and want the clarity, confidence, and commercial edge that comes with strategic legal leadership, get in touch to start the conversation.

This article is for general information purposes only and does not constitute legal advice. Specific legal or strategic advice should be sought separately and tailored to the particular circumstances of your business. If you would like to discuss how these issues apply to your organisation, please get in touch.