Pitch for funding while the company is in the process of being registered
I have applied for the registration of my company, but it might take around 3 months to get all the formalities clear. In the meantime, is it possible to approach any VC and ask for funding? I ask this because everywhere I've learned that VCs only fund companies that are at least registered, but the kind of work that our company does might lose its significance in 3 months if not marketed in a big way in these 3 months, and hence we need funding now.
Also, if there are such VC's could you please point out some relevant links.
Thanks in advance friends.
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I don't get clearly the "might lose its significance in 3 months". I guess you mean you started already your marketing campaign and with lack of money you can't make it bigger? Or it will lose it's significance of other reasons ? – Nikolai 12 years ago
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@Nikolai : Exactly, u got it correctly. We need funding to make it big, since our product targets the market that has just started picking up here in India, and we want to capture as much of market as we can at the earliest :) – Nitin Bansal 12 years ago
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Why wouldn't you? Google did the exact same thing back then on their first round. :) – Mihaly Borbely 12 years ago
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This should be the least of your worries. You are probably delusional if you think you can raise funding in the coming weeks. Either you have great traction, and investors will find a way for you to take their money, or you don't, and no amount of paperwork will change your lack of traction. – Alain Raynaud 12 years ago
2 Answers
Ye standard disclaimer: IANAL
I don't see any reason that you can't start pitching for VC capital before the company is fully legally registered. What you should be up front about is that the company in the process of being registered and the money could be held in escrow for example until you are able to claim it or they don't allocate any money until the company registration is complete.
The fact that you might need to market your company before it's a legal entity you might come against laws that prohibit you from doing so, finding out whether or not you will be able to do marketing legally under your company's umbrella before it's a legal entity would require a lawyer's consultation.
Now if in 3 months your product could lose significance altogether I would suggest finding ways of differentiating from the competition because I am fairly positive that your competitors are already trying to enter the market as we discuss this.
Why would it take so long to get registered? I'll assume you are going for a Delaware C corp (since many investors will not invest in anything but a Delaware C). You can go to any number of online incorporation services and get expedited services - If you really had a pressing issue, go directly to the Delaware site and get same day incorporation (didn't say it was cheap, just possible).
If time is that critical to you, then expedite the process.
IMHO: VC's know that incorporation doesn't take that long - so any explanation you have for not having a C corp in place will likely not put you in a favorable light - unless its related to conversion from a S or LLC.
