you know

looking uh looking for problems so my

presentation goes through um 10 mistakes

that you can make when you're um

starting up your company and that's the

way that we'll talk about the things

that you should try and make sure aren't

going to show up in your due diligence

so um we'll walk through that and then

there's question time I know from

experience I'm not going to see your

questions in the chat while I'm

presenting um so by all means throw them

in the chat and we'll answer them um

after the fact but I will likely not see

them while we go just because it's hard

to pay attention to

everything all right hopefully I don't

mess this up because I'm not doing so

many Zoom presentations

anymore do we have my presentation now

looks great okay let's make sure I can

change Pages

too okay then you go we're good okay all

right so let's walk through these top 10

mistakes and then think about how that

would show up um in your due diligence

process if you have made them so number

one is to not be starting your company

on your employer's time equipment or IP

so this happens more um more frequently

if you're a first-time founder and you

um have started the company because

something that working on um in your

current workplace makes you think of

another solution that might be aligned

hopefully not competitive because that

would be really bad um but you got to be

really really careful that um if you are

starting your company while you still

have um your job let's call it a side

hustle um that you are making sure that

there's a really clear divide because

you will have questions about this in

due diligence if it's obvious that

you've started um your company while you

are still working somewhere else so

they're going to want to make sure that

you've answered those questions and if

um let's see it's as simple as looking

at your LinkedIn profile it's really

clear that you're doing something and

the time overlap might have um indicated

that there could be a problem with your

past employer um they're going to want

to know answers about what was your

employment agreement do you have sign

off from your previous company that this

isn't competitive investors don't want

to invest in a company that is going to

get challenged down the road by your

previous employer um that they actually

own the intellectual property for the

company that you've started up so look

if this is a concern for you look at

your employment agreement um it's

possible that you've signed an IP

assignment agreement that you didn't

read very thoroughly and it says

anything that you dream of while you're

working for the company belongs to them

that's probably overreach on their part

but you might have signed them because

I've seen them um so you want to be

really careful that if there is that

overlap that you're able to answer that

particular question and we can dive into

that um with anybody that has specific

questions I won't belabor it in case

nobody in the room is remotely concerned

about it um but you definitely don't

want to use their computer um to

code um if you still have another job

that's NE

okay the next um big mistake that's made

um and you want to make sure that your

paperwork doesn't reflect this or or

reflects that this is not the case um is

that you didn't start the company um

particularly pre-incorporation in such a

way that you had other people involved

with it that are no longer with the team

um this can happen whether you're you

know coming out of a university

incubator style um issue or if you're

just working with a number of people

maybe co-workers on something your

investor wants to know that there isn't

anybody hanging around in the background

that might step up and say I was part of

that

business um and I got shut out of it but

I have a claim to some of this business

that um and and this idea um for this

company so nobody wants that kind of

problem um hiding in the background so

if that is the case there's ways to

solve that you can have a release signed

by the person um that they don't have

any interest um if you know that there

there is somebody out there harboring

those sorts of um beliefs that they have

an interest in the business and they're

not a

shareholder um and you're worried about

them stepping up when the business

becomes successful and you don't think

you can get a release from them then

maybe um you give them a small ownership

interest um in the company um to make

sure that that's not going to be an

issue and you can answer that question

now how is an investor going to know

that that's the case if you don't tell

them okay probably they

won't unless the person somehow is you

know out on social media or or otherwise

um speaking about but know if you've got

that kind of skeleton um sort of hanging

around in the background of your company

that's not something you want um coming

out in the future and it should be dealt

with in

advance okay one of my favorites um this

my my image for this is the Bor cat

because this has got to be one of the

most boring things ever to talk about is

the incorporation of your

company um if you have uh Incorporated

your company on your own or if you've

Incorporated with a company with um an

adviser that doesn't regularly work with

startups that are going to seek

financing then it's probably a good idea

to get um some advice before you go for

financing on whether you're set up

correctly for this type of um investment

round um so for example if you've

Incorporated on your own or with

some support from somebody who

doesn't necessarily work with startups

they might have issued 10 shares or you

might have issued yourself one share um

or you might have not issued shares at

all because if you did it on your own

you might not know yet that setting up

your minute book is an important thing

um you want to make sure that your

directors that are documented are still

directors they've been elected you've

got to create a minute book again it's

hard to imagine talking talking about a

more boring topic than this but if you

haven't gone through a due diligence

process yet um and in particular if you

haven't worked with a team that's used

to supporting um startups it's

worthwhile looking at this because it

really um can get the due diligence

process off on the wrong foot with

people that your company just doesn't

look right you don't have the minute

book um you're missing resolutions you

don't have register and ledgers which

you know is really just your your

spreadsheet of who who owns shares and

and who um are in officer and director

positions so getting all of that right

is important for looking um to investors

that you know what you're doing and that

you have the right advisors in

place and and so issuing shares I I

mentioned you've issued one share or 10

shares when you're going into an

investment round you want to have

hundreds of thousands or millions of

shares issued to Founders because you

need to be able to dilute the company by

bringing investors in um so if you're

sitting there with you know a 100 common

shares to each founder this is probably

something you want to change up before

you get uh to the investor around it's

fine like that alone isn't going to turn

off an investor but you're going to have

to fix it before they come in because

nobody wants to invest a million dollars

in your company and get one share for

10% because everybody has 10 shares so

uh we just need numbers we can work with

because everyone's going to be diluted

um with subsequent fundraising rounds so

um that's something that you need to

have right out of the

gate okay um this this is something that

you don't necessarily need as you go

into your first round of due

diligence but it is something that you

can expect to maybe be raised by your uh

potential investors and that's a way to

restrict even the founder

shares um and and what the investor

wants to know is that one or more of

your Founders isn't going to abandon the

company and still have a big stake of in

in the company but have decided their

you know moving across the world to take

up surfing and they still own a third of

the company so there's various ways to

do that uh and to deal with that and you

can wait um until you're through you're

into the investment round and the

investor says listen we want a reverse

vesting agreement on the founders or we

want a voting trust or we'd rather um

particularly you know if if you are

don't have the right number of shares

issued already um you could say okay

we're going to give the founders stock

options um for the most part it would be

with the founders you would be doing

something like a reverse vesting which

is just a hold on the shares you have

already and you have to sell them back

if you leave the company

early um a voting trust would just say

if you leave sure you've helped build

the company already we're not going to

ask for your shares back but we don't

want to be trying to track you down with

this huge shareholding that you have to

vote on things you're going to have to

assign the votes for your shares to

somebody else so do you need these

things in advance and do you need to

have them um in your data room not

necessarily but know that it is coming

and if it's something that you can

anticipate is an issue um it's maybe

something to talk to your advisers about

whether you should do it

now um okay so the not planning for a

breakup

is um another thing you have to be very

careful of but probably when we're

talking about in the context of an

investment round you're almost certainly

going to be redoing this paperwork along

the lines that the investor wants to see

so if we weren't like if you're not in

the middle of an investment round you

should have a shareholder agreement even

if there's two of you in fact especially

if there's two of you um you need to

have a way to deal with the breakup of

the business and somebody leaving for

completely you know innocuous purposes

um somebody gets sick and they can't um

you know they can't participate as uh

one of the founders anymore you need to

have that kind of paperwork in place um

if you don't have it already going into

an investment round um particularly if

you're very early stage probably doesn't

look terrible um but but if you've been

around for several years and you're not

sure how long it's going to take for the

fundraising round to close I strongly

suggest you get a shareholder agreement

in place um what it will look like

coming out of the investment round will

depend upon the investors and what their

demands are it might be a single

agreement it might be a set of multiple

um voting rights agreements and and VAR

investor rights agreements so you don't

I would never suggest to somebody on the

verge of an investment round to try and

anticipate what your investor is going

to want to see in those documents almost

certainly you're G to be wrong because

every investor is slightly different um

and that's what we do all day um is is

refine those agreements for investor

preferences so I wouldn't suggest you

try and anticipate it but if you're not

closing the round soon and you don't

have some sort of agreement in place

absolutely need to get it place as soon

as

possible okay a really common mistake

that's made um with a company is to

forget that even the founders need to

have fundamental agreements in place so

you may be a very conscientious founder

and start hiring contractors or

employees and make sure that they have

IP assignments agreements and employment

and contractor agreements but even

founders should have written agreements

in place definitely on the IP assignment

agreement um but they there should also

be employment and contractor agreements

um and and they're very very commonly

forgotten because you're the founder why

would why would you need an agreement

well once people start putting money

into the company those agreements

absolutely need to be um in place and I

do recommend that those get put in place

um in advance of your due diligence it's

possible your investors will have

different terms that they want to see in

those um but it it's almost certain if

you don't have them they're going to

want them uh put into

place the other thing um that I'll I'll

focus on here because I don't think it's

really covered in another slide um if

you have come out of any kind of

environment where somebody else owns

your IP so academic or uh clinical

relationship where you're

commercializing um research based

intellectual property um you definitely

need your agreement in place um going

into your due diligence with the um

owner of that intellectual property it

might be a license agreement and you

might have been able to um actually buy

the IP um and have a full assignment of

the IP but it's more likely to be a

license agreement so that also needs to

be done if as a Founder you don't

actually own your IP um those agreements

need to be in place as well but if

you're in that environment I'm sure

you're very aware of that

already okay oops sorry about that um

not maintaining your record so even if

you've you've Incorporated correctly um

and you've gotten everything done uh

correctly making sure that your

paperwork

is correct and up to date is really

important in the due diligence process

again it shows an investor that you are

conscientious and that you are on top of

the

recordkeeping um one

of the key uh mistakes that can be made

in the very early stages is if you've

done if you've brought money into the

company and it hasn't been well

documented it really needs to be nailed

down what that is so if that's a Founder

loan was it a loan was it paying for

shares it's very common that you've

thrown 10,000 or $50,000 of your own

money in um and that hasn't been

documented so if it's a shareholder loan

that's going to be repaid it should be

documented um if it's going to be

sometimes they want that converted to

shares that's fine um very importantly

if the money hasn't come from the

founders if it's come from friends or

family um

often it it's really very common to have

taken money from friends or family um

particularly family and if it's written

down anywhere it's definitely not on a

share purchase agreement it's you know

scribbled

somewhere you can have 5% of the company

um that sends complete shers down they

spine uh please don't sell percentages

of your company um so we need to go back

and absolutely very clearly document

what that money was for did it purchase

shares did it purchase um a right to

have shares in the future under a safe

document or a convertible note whatever

the money that came into the company um

was for maybe everybody's expectations

about that weren't clear at the time

because they were friends and family

that were just being supportive of you

but once you get to outside money you

they want to know does that person have

ownership interest in the company do

they own shares did they loan you money

was their interest so if any money has

come into um the company it has to be

cleared cleared up what it was for and

um make sure there's paperwork to

support it uh to support the

characterization of that

money

um not secur securing your brand and IP

um so making sure that you can can

answer questions that people have about

um if you've shared any um intellectual

property with people did you have

confidentiality agreements in place um

if you have something that might be

patentable have you had an early

discussion with that with a patent

professional about that and have you

taken steps to protect your brand um and

and often in the very early stages you

haven't taken the steps to protect your

brand because maybe you're not totally

sure that that brand is going to stick

yet you've you've sort of thrown a a

name on um on your company and then as

you develop a brand you've actually used

a different word it's completely common

to totally change your brand over time

um but if that brand is key to um your

product then you really need to be

careful about having uh showing that

you've

secured um your trademarks and

potentially internationally as well if

that's um important if you can easily

Rebrand your product and most of your

focus is on um the product

development potentially less um

important okay um this also goes along

with that recordkeeping piece and um it

goes to a few of you mentioned you've

done friends and family rounds um making

sure that again that paperwork is in

place accurately represents what the

investment intention was was it buying

shares

um

ideally if somebody did think they were

buying shares and you thought you were

selling shares it's been accurately

documented what the value of those

shares was um and

also making sure that you've sold shares

to people that you were allowed to sell

shares to I can do an entire

presentation on who you're allowed to

sell shares to so I won't go to down

that hole but if you're remotely

concerned about whether they they

actually fell into the category of

friends and family um or whether they

were accredited investors those are some

questions to answer in advance um of of

having that looked at so um there's lots

of exemptions that allow you to sell

shares to people without listing them on

a public um exchange as I'm sure you

know that's what what we're doing here

that's what we're aiming for is selling

um shares under um under those sorts of

circumstances but often in those early

stages you might have sold shares to

somebody that wasn't um necessarily

qualified um to be sold shares to so if

you have any potential U problems there

you want to know about them in

advance a friend of a friend is a good

example of somebody that might not have

been entitled to buy shares from

you

um and then moving beyond the founders

making sure that as you do start

bringing on those team members that you

have everything documented this is your

data room right here every investor

wants to know that you've got enforcable

signed contracts with employees and

contractors um that there's IP

assignments in there if there's stock

option plans that that is um well

documented um a common pitfall is that

you make an offer letter um to somebody

and you never go any further the offer

letter um contains a promise of some

shares it's not clear whether there's

stock options or shares and it's the

offer letter doesn't form well it it

forms to some degree an employment

contract but it's not a full employment

contract so if you have anything sitting

out there where you gave an offer letter

to somebody and the full documentation

hasn't uh been completed those are

things you want to know and fix

um before they're showing up in your

data room and and literally go through

the checklist of every single person

because I've been in many data rooms

where uh it's all over the place and

there's a few contracts for some people

there's offer letters for other people

um there's stock options for somebody

and there's no corresponding contract

with them anywhere in the data room

those are all things you can fix in

advance of having somebody go through

your data room and you should if

somebody's

left and you didn't have a contract for

them but they might still have stock

options or their stock option agreement

is going to have shown up somewhere you

want to make sure whether their their

options have now expired and remov them

from the stock option uh table so those

are all things that a very diligent

person going through your your data room

will pick up because they want to know

who the people are and what they have

and where their Agreements are and don't

forget your advisor so probably a lot of

you have um some advisors that have have

maybe formed a formal um Advisory board

or maybe are less formal

arrangements and if you have given them

any expectation that they have um stock

options or some sort of interest in the

company you need to make sure that that

is documented that there are advisor

agreements in place that detail that and

of course include confidential it um

information and make sure everyone's on

the same page maybe they think they're

getting paid somewhere down the road um

but you've never thought that they were

getting paid uh you know for for their

advisory services so make sure that all

of those documents are done

too all right um note this down if you

want Dentons Venture hub.com is our free

platform it's got a lot of startup

information and some startup documents

on it um you

just shoot us your email and you're on

the platform and there's lots of great

um free information there that is my

contact and that's it those are my

10 biggest mistakes that people make and

now I'm all yours thank you uh thank you

Megan that's really great uh we're going

to go straight to Q&A uh we've already

got hands up or we got a clap going on

not a hands up thank you thank you so

much um yeah I just wanted to check in

for a minute you talked about all the

things that need to be in your data room

and then the next layer is the judgment

and the decision making behind how you

reached those places and um investors

are looking to

drisk uh all the time so whatever they

read They're going to try to get a sense

of where that uh Founder's judgment is

um when it comes to the relationship

between a uh Venture lawyer and other

professionals uh the other professional

experts in a Founders sort of perim um

Circle how how typically what does that

relationship look like is sitting with a

Denon let's get your paperwork done or

is there some like deeper kind of

conversations going on about how you get

the right things on these p on these

documents is that a good question does

that make sense yeah yeah it does um I

mean you're you're asking someone who

has believed for 20 over 20 years that

the real you know that the biggest value

ad that professionals have whether it's

lawyers or financial advisers like uh

number crunch or working with um uh

other investment advisors that are value

is not in the paperwork we provide but

the advice and the the sort of

troubleshooting and in our experience

over time so my answer is g to very

obviously be that um you should be

looking for a relationship of trust um

with people who are experienced in

dealing with this type of work um do

they need to be experts in your

particular field to some

degree it's helpful because um there's

different sort of investment interests

in different um buckets so um life

sciences uh we had a few um people that

were in in that space you know it's a

it's a really different investment

thesis if you've got to invest in um a

company that's going to be going through

clinical trials and and and taking

several years to get through

uh various processes with government

regulation um than somebody who can

build the best app ever and you know if

you happen to hit the sweet spot that

you know is interesting to the public if

you're in the right place at the right

time uh you can scale your product

really fast with the right team behind

you um so having some experience like

that in all your advisors is is

definitely helpful does it turn the tide

with the investors I mean I'm going to

be honest with you know I think your

biggest risk um on that front is if you

have an advisor that's not willing to

work collaboratively with your investors

so um if there is a negotiation on terms

you want someone that's going I I

believe that is going to work um

collaboratively with the investors and

not not um turn them off with really

aggressive deal terms um so I I hope

I've answered your question but I I do

think it matters to work with an

experienced team but I don't believe

it's it will determine things for the

investor so that should make you feel

better if you you know I don't think an

investor is going to leave a promising

company um because they don't see your

Council kind of out threatened Center um

ultimately they're investing at this

early phase in you um and I I'm sure

that's been a common conversation uh

point across cam Labs is they believe

they're investing in you um as much as

your product and frankly I believe a

well-organized and complete due

diligence room says a lot about you as

the founders and and leaves the right

first

impression um on that front thanks I I

will let you do you want to just take

the questions yourself directly from the

room yeah sure um I'm just

double-checking we don't have

have I'm not see anything we don't have

any in the chat okay I'm I'm going to go

left to right because I don't know when

people put up their hands but my left to

right I'm starting with

Dave Hi Megan thanks um one question

around your slide four which was the

restrictions on Founder shares and so on

yeah is there a difference is there a

different

is uh the amount of the the amount of

the investment at a sort of a safe level

like what's the leverage that an

investor has around sort of pushing down

that level of sort of CH business change

I suppose like if someone's giving me

$330,000 like why would I do all that

but

yeah great question and it it runs uh

Beyond those ter by Beyond just that

question um you know I would say the

best um the best position you can find

yourself in in terms of what you're

going to agree to in an investment round

is to find a lead investor that's taking

enough of the round that they can set

the terms that you can live with so if

your first investor says I'm giving you

30,000 of a of a $2 million raise do not

agree to terms with that person say

that's awesome we'd love to have you on

board we'll come back to you when we get

a lead investor because you whatever

that person coming in at a at a small

percentage of your raise might say um

you don't want to set terms according to

them um that said sometimes that first

initial investor might be somebody

that's going to do a lot of

introductions for you um

so if they're willing to work with you

without coming up uh with a term sheet

yet um and and help you build those

relationships um that's better than

having a term sheet that has a bunch of

terms you don't want to live with

including potentially reverse uh vesting

and and other sort of onerous founder um

roles but I've certainly seen reverse

vesting requests in preced and Seed

rounds um and and really what they're

trying to do is ensure that particularly

in a Founder team um if you've got

co-founders that um you don't you don't

have someone leave and and just

disproportionately own a chunk of the

company before um the value that they

brought is really realized so um picture

you know a typical reverse vesting term

period might be three

years um so if if you put it into place

when you're first starting your company

and you have three

co-founders um you know you're all

entitled you all agree we're we're each

going to have a third of the company

um you want to make sure that everyone's

actually contributed a third of the

company by the time you get to that

vesting threshold that that you've set

and so the investor is thinking along

the same um same lines it's not to say

that a

soul uh founder isn't going to face a

request for the same um sort of

restrictions on their shares uh

particularly I mean if you're a soul

founder and you decide to F the company

it's probably not going anywhere so the

fact that you still own your shares

doesn't really matter um depending upon

the investment terms the investors may

be able to take the company and sell off

um the assets that you've created so far

um but they may still just as a as a

habit even ask a soul founder um to

enter into reverse festing and then

you're going to be entitled to whatever

shares have vested but you're going to

have to sell back um the balance of them

so I hope I haven't totally dodged your

question Dave but no no I was gonna what

about that's you are you talking spec

more specifically around priced rounds

or is the same transfer your same

comments transferable around unpriced

safe or convertible notes yeah yeah

you'll you'll often find investors still

want to see that there's investors that

just really believe in them um and and

really want to say if I'm giving

and especially at the early stage

because there's no value other than the

founders in a lot of these companies yet

or there's maybe a bit of code but

they're really truly investing in you

and so um there's just investors that

say yeah they got to be tied to the

company um and we want to make sure that

that team is still around or our money

is just gone thank

you okay Nick nichas was the next one on

my cycle here I have a question a just a

Shameless plug for D because uh Dentons

actually did our um our IP Tech transfer

assignment from the University and it

was a very very easy experience so they

they good at

that that's great to

hear all right

David thank you thanks so much for the S

today um question I have is I'm

currently Sol founder pre-revenue and um

still still filling out the the market

and also doing a lot of validation but

we've launched already so but and we've

also been getting a lot of traction as

well so my question my question bothers

around

um valuation so in cases when the

investors don't agree with the valuation

how do do

we go around with that uh how do we go

about that conversation with them sry

you mean the foundation like how the

company has been set up no

valuation oh valuation sorry um oh I

love it when when Susan's here to to

answer those questions I always punt

valuation questions um listen it is

absolutely the toughest part um of this

what I the the easy answer really is at

the early stage is you don't price the

round um and then while there may be um

so if you're doing a saf for convertible

note there is a cap that everyone has to

agree to it's really the the whole

purpose of those um forms of investment

is to push the valuation down the road

because when you are pre-revenue it's

very very hard to to Value the company

yeah um so that's

um that's my best advice is to

absolutely avoid a priced route okay um

you know that that said you sometimes

you can't escape it someone wants to do

a price round and you want their money

and they're the only people at the table

um and

you you have to come up with this

fabricated value frankly for the company

um and and then it's pure negotiation

unfortunately yeah okay but yeah push it

off as long as you can if if you're not

comfortable with it okay sounds good

thank

you

well yes thank you for the presentation

and uh my question is I don't know if

you have if you had experience with the

companies from Quebec because we have

data that that are in French and also

it's it's it will be probable that we'll

pitch to investor that are that speak

English

so are there like specific documents

that you you would say that we should

focus on translating and to make sure

that uh we don't waste our time

translating all the the

documentation good question

um my French is atrocious I apologize

for that so I'm not uh I I always cringe

when I when I see a great French um

company a great Quebec company come

along and their documentation is in

French because I can't support them um

Quebec has some fantastic um financing

resources um so if you think you can

build for a good period of time

internally on quack or or any of the

other financing sources then maybe you

don't worry about it um but but really

if you're going to go outside Quebec for

financing or your

customers um which is

likely um all your fundamental documents

are going to need to be translated and

and maybe um signed uh signed in English

um your customer contracts would be a

big one um because you're outside of

Quebec your customers aren't aren't

obviously going to be able to um sign

something that they don't understand and

a translated version is maybe not ideal

for them your company founding documents

your shareholders agreements those

things might be okay in French um and

and investors might be okay with a

translation of those

[Music]

um yeah I I think you want to take a

look now at how deep you think you'll be

able to go from a financing perspective

in Quebec and um if you think you're

going to tap out those those resources I

would make the switch to English

unfortunately as soon as you can

probably I don't know maybe Suzanne has

a different perspective on

that I mean I think that just makes

sense um the other thing is it depends

like if you're going to be in just

french-speaking countries um but if your

if your trajectory if your projection

for scaling the market includes others

it's not it's it's going to send a sign

when English speak investors come in

that you're not looking at a a more

Global kind of business so there is a

message there when is the question right

at what point would you have to do that

and is

everything Megan you would have more

experience than I do but just from like

being in

publishing not everything's easily

translated the

essence yeah yeah it's a tough one I

mean internally I would send it to my

Montreal office if it came to me in

French so so I'm not very helpful

unfortunately on that question because

that's my solution um and we would just

if if it was uh you know the document

certainly if the company was

incorporated in Quebec and definitely if

most of the documentation was in uh

French we would be doing it out of uh

our Montreal office um but certainly

there's there's any number of of

bilingual or you know translation needs

around the world

so we would have to to translate their

incorporation documents also for

instance not no I wouldn't say your

incorporation documents um but if you

have shareholders agreements that

investors are going to be signing I

would take the lead from them maybe not

rush to do them now but if your

investors ask for you to translate them

which they typically would

um okay yeah and and I am just G to take

one moment to talk about um customer

contracts because the that 10-point

slide actually doesn't really touch on

customer contracts um but some of you

are

um are uh re have customers already and

have Revenue that is of course something

that needs to be in your due diligence

room and you'll be asked about um if you

have um if you have not had

legal help preparing your customer

contracts or your terms of use if it's a

a platform and your privacy policy Etc

that is something to invest in um

depending upon the

investor there may not be a really deep

dive on those document that

documentation but um it's not uncommon

for particularly if you're building an

app um or web-based platform to have

pulled your first terms of use from

um the

internet and and found somebody who does

something similar to you and it might be

in a jurisdiction that doesn't apply uh

particularly around privacy

policies um so it may not get picked up

in the due diligence um but but making

sure that um your current agreements

look the way they should look it's

probably not going to turn off an

investor but they might say hey we need

to update your customer contracts going

forward um we want to make sure that

when we reach the point of of wanting to

sell the company all of us that you've

got contracts that that do what they

need to do that you can assign them or

you can transfer them and that sort of

thing so um it's not like the it's not

remotely a deal killer but do put a bit

of time um into starting to think about

those things if you don't yet have

customer contracts then get those right

right um from the

start uh Oscar is next on my

list now I think you're just on mute we

definitely don't have your audio

still no you're off mute but we can't

hear

you you can put your question in the

chat uh if you want Oscar yeah because I

we've got you now there you

are yes here I am

okay I do believe that Kevin is

on okay very

good Hi Megan first of all uh thank you

for um thank you for a great

presentation I'm going to make an

Express presentation of my company

because I was not able to do it h I'm

CEO CSO of body mechanics we do Biomet

weable technology uh for highend

athletes and people that perform on

Extreme

environments uh we are uh due diligence

ready uh we have been six seven years

almost to the date right now uh on the

making we just signed our Manufacturing

in Montreal so all our Technologies is

made in in in Canada we are a nin strong

team I have other three co-founders uh

that are that we have a subscription

agreement we have share H shares issued

everything is uh made down to the last T

we have one legal challenge H that we

have already negotiated uh the dealing

on how we're going to be repaying that

legal challenge so it has been taken

care of uh my my question is the

following because that legal challenge

is in in Quebec and we were doated in

Quebec but we brought the company to

Ontario to Ottawa we closed the our neq

our

numc it's it's closed so it has been

radiated we don't have anything to do

with with Quebec how would that be

perceived uh by any potential uh

investor that would actually have

interest into jumping into our company

taking into account that we're running

right now uh marketing campaign with

sports that's that's huge uh they're our

partners uh we have other International

trone Union is now our partner

officially so taking into account that

balance uh how would a a potential

investor take a look at our company in

on a serious basis given the legal

challenge that we have that it's not

encumbering but it's something that

might uh buil us more into a kind of a

let's wait and see scenario because

we're raising our our preit at this

moment yeah so there's a couple answers

to that the fact that it's in another

jurisdiction won't um make anyone feel

any better I'll say that um but there

there's ways to deal with it obviously

companies have um have legal claims that

they you may want them to go away and

you may do everything you can to get

them to go away but there's somebody

else involved and you can't always make

that happen right um so there there's

different ways to deal with it the

really easy one is to create an

indemnification for the investors around

it that that sounds easy but in fact

it's not necessarily as easy as it

sounds because how big is the litigation

you know is it a claim to ownership is

it an IP claim like it's it's Financial

it's it's a financial claim it's not

even IP it's not ownership or control

it's just a financial claim because they

didn't have a a food to stand on yeah

when they wanted to make any other of

the claims they were completely

dismissed yeah okay it came to it

happened but they the only thing that

they want is money but they do not want

the whole amount in one goal so we

negotiated with them to be to have a

payment plan once that we get a an

injection of capital yeah yeah so I mean

that's kind of the best position to be

in um is to be able to show that it's

been it's been settled and there's terms

of settlement and then offer up um the

the founders offer up an indemnification

around that nice boxed amount that

they've claimed it's it's when it's

open-ended that it's scary to

investors um and so if it's a you know

you pass your contract or whatever it is

if it's if it's sort of in a box you can

deal with it a little

more yeah right thank you very much

great no problem

Nar hey man so um we've gotten some

interest from uh the states do we need

to have a separate data room for you

know uh for let's say International

investors um the short answer is no okay

if you

have data and and probably for a startup

that's the end of the story yeah um if

you're a more established company and

there's any concern about where the data

is being held um and in particular when

that would come up is if you have

employee details that are going to go in

the data room or um customer contracts

and your customers have been very picky

about where their their information is

held um then you need to look at the

jurisdiction of where the data is is

going to be domiciled but for I I think

I'm G to guess for you at this stage

it's not an issue and you don't need to

um to worry about setting that up okay

um and one more question while I have

your ear um the documents that are in

the data room are there standardized

templates or like do I do we just open

up an Excel spreadsheet and a word doc

and just start writing stuff

down so that's a good question I think

we circulated our Denton or Ken

circulated our Denton's list so that's a

fairly standard one um that being said a

particular investor May request the

information in their form so you may get

an Excel spreadsheet from an investor

where you need to answer every question

in the Excel spreadsheet even if it's

you know no not relevant no not relevant

and so you can't just say go to my data

room and figure it out for yourself yeah

um and so it can be frustrating because

you put all this time into this nice uh

data room and I think W is probably

crying from what he said at his intro

unfortunately it's it's not necessarily

as easy as my data room's up it's done

because you will get a series of

questions and for the most part it will

be uh they won't be asking for something

that's not in your data room you've

you've there may be the odd thing that

you're like oh I didn't know anyone

would want that I didn't put it in my

data room okay fine put it in it's more

the the leg work of answering these

questionnaires um you can't really

anticipate those in advance they are

what they are and they're they're going

to be in the format um that they want

some investors will just say okay we'll

have our due diligence team go into your

data room go through it with their

checklist you never get a checklist from

them they're just going through your

data room and they're making notes

asking for something that's missing so

um

it's not real templat but generally

speaking what they want to see is what's

on our um Denton's list gotcha good

thank

you yeah that's really a comprehensive

uh

list uh you're absolutely right

will uh there don't see any more any

more questions

uh we're coming uh to our time uh May

before we close is there anything that

you want to leave uh the group

with no I mean I think we can do this is

the session we've done today I'm sure as

you get into your investment round the

biggest questions that you're going to

have

are what's normal I'm being like I I was

given this term sheet is this normal is

this you know should I should I accept

this can I do better that that's the

hardest thing in your first fundraising

rounds um and there is the first thing

to know is there is no normal there's no

there's yeah investors tend to ask for

this but it's you know I have companies

that have never sold a share outside of

their their two Founders and now

somebody wants to buy a priced round and

like your first round isn't always a

safe round like it's unfortunately it's

all over the place and so um I I think

having somebody to talk to about what is

uh what you can expect is really

important um you can do everything in

advance on due diligence and get all

your paperwork in place but making sure

you have um someone that you can get a

sense of whether the first term sheet

you get is the one that you should

commit to um is

going to be the most important thing for

you absolutely because you've set the

bar it's Megan thank you so much for

those of you are fortunate enough to be

joining us at Denton on the 21st for the

P Labs investor founder Boutique Summit

it's gonna be very special uh in the

boardroom at Denton uh with some other

folks there for Mayan's team as well

well and uh following this Sarah will'll

send out a link for you to follow on

with Megan and her team or her team

however that may uh shake out whatever

however that makes sense uh just know

that uh now you have a new friend her

name is called Megan she's awesome and

she's really smart and yeah well she

likes that paperwork stuff so great to

have somebody like that around super

knowledgeable you know she's helped

companies that are scaling in Ottawa

that are are famous that are really well

known and she is I've worked with her

before at can she makes life simple

she's really she's a breeze to work with

so that's um awesome so we'll see you um

we'll see you at the one of ones the um

open Office hours and for those of you

again um coming on the 21st we'll see

you there if you are raising or you

getting close to raising don't forget

that you can apply at Capital Angel

Network and then you'll see Megan again

because she's on our selection committee

we didn't meet we didn't well I GNA try

to get through this really fast because

I

want somebody's talking maybe that was

to somebody else anyways um thank you

very much Megan for supporting this

program for hosting us on the 21st and

for sharing so generously of your

time cheers thanks everybody for coming

thank

you just I don't know if you're still

here you asked you for the RSVP we send

a link for canlab Summit if you register

on that link you will send an invitation

on your calendar also awesome thank you

very much thank you you have a great day

so much for taking with us

um I think we're losing everybody so

cheers Sarah Sarah you want bye you want

to hang back for a sec I gotta jump on

to another call actually but I just want

to touch

Bas thank you s and have a good one take

care thank you so

much than

you oh

God okay are we just us okay people are

slow to get

out I had to

remove oh you did okay I was going to

and then it was like asking me to report

them and that was what I wanted to do um

yeah I think I just kind of for the

people that aren going to calabs it

might be a little bit um of a short but

um we didn't really kind of wrap it up

as the end of the

program uh so let's think about

survey um I still have some work to do

but I saw that there's quite a few

investors actually coming to the

investing in AI but I got to jump off

I've got one founder that's up tomorrow

in selection and I've got it this is my

last final uh coaching do you need

anything right now I have a question

about the email I want to send to

Partners but I can wait un I can ask it

later after your I think oh just jump in

if it's

quick um for the email I want to send

this one is only for the deal flow or I

send it to both deal flow and partners I

think deal flow they have to list some

of the people in some of the people in

partners aren't going to want to be

hearing from you every month about your

deadline so Community Community Partners

really is for

hey this is what's going on if you'd

like to share it with your network and

deal flow are really those people that

have maybe an accelerator they've got a

number of founders with them it's not

like they know one or two they know

Founders and where they're at and who's

raising and what stage they're at that's

a differ does that make sense yeah I

understand if you want to go you can go

but I have still one question about this

ask me ask me quickly because I don't

want you waiting um yeah you asked me to

send my link to them for if they want to

have like a 15 minutes meeting because

of Brian's one once I still have my own

personal calendar integrated with

HubSpot so if I give them the link it

will send the invitation with my

personal calendar is there is no problem

with that it's fine doesn't matter okay

no I wanted to just check

because as long as it works for you I

mean um yeah because I mean I think it's

easier I and I just I changed that

letter around a little bit so it was L

you asking and more you

providing okay okay great it's pretty

much the same clent okay I gotta go Miss

guy at 3:15

actually I was writing your email okay

cheers thank you Sarah thank you bye bye

by