Legal Project Management Plan & Checklist
Purpose of this Guide: Open this plan when your client is a company (typically an Australian proprietary or unlisted public company, or a Delaware C-corporation with Australian operations) raising its Series A venture capital round. Use this plan when a lead investor has expressed interest and the parties are ready to move from informal term sheet discussions into binding legal documentation, investor due diligence, and a formal closing. Verify current guidelines on the official WA Legislation. Access services via the WA Courts.
Jurisdiction: Primarily Australian (Corporations Act 2001 (Cth)) with Delaware C-corp considerations where applicable. Where the company is incorporated in Australia, the Amended Constitution and share issue are governed by the Corporations Act. Where the company is a Delaware C-corp, the Amended Certificate of Incorporation is filed with the Delaware Secretary of State. Verify current guidelines on the official WA Legislation.
The Process at a Glance: The process begins with engagement, conflict checking, and scope definition. The legal team then sets up a virtual data room and audits all corporate records, intellectual property assignments, and option grant documentation. The lead investor's term sheet is reviewed and negotiated, covering pre-money valuation, option pool sizing, board composition, liquidation preference, anti-dilution protections, and protective provisions. Once the term sheet is executed, the counsel team drafts the core financing agreements: the Subscription Agreement (or Stock Purchase Agreement), the Investor Rights Agreement/Shareholders Agreement, and an Amended Constitution or Amended Certificate of Incorporation. Investor due diligence requests are coordinated and responded to. Once all parties sign the closing documents and the investor transfers the agreed funds, the transaction closes. Post-closing, ASIC lodgements are made (including s 254X notification), the share register is updated, new share certificates are issued, and the capitalisation table is updated. Verify current guidelines on the official WA Legislation.
Key Legislation and Case Law: Corporations Act 2001 (Cth) - Part 6D.2 governs disclosure obligations; s 708 provides key exemptions for sophisticated investors, professional investors, and small-scale personal offers. Australian Securities and Investments Commission Act 2001 (Cth) - ASIC's regulatory oversight framework. For US-incorporated entities, the Delaware General Corporation Law (DGCL) - Title 8 of the Delaware Code governs corporate formation and the authorisation and issuance of preferred stock. Series A transactions are typically documented using the National Venture Capital Association (NVCA) model documents or Australian equivalents. Securities law compliance: the issuance of Series A shares is typically exempt from the disclosure document requirement under s 708 Corporations Act, but practitioners must verify the applicable exemption for each investor. Liquidation preference: typically structured as 1x non-participating preferred. Anti-dilution protections are typically broad-based weighted-average. Option pool: the ESOP is typically expanded to 10-20% of post-money capitalisation before the Series A closes, which dilutes existing founders rather than incoming investors.
* Disclaimer: We're nobody's lawyer, because we aren't lawyers. You are, so you know better than to take legal advice from an app. We also aren't accountants or dog trainers - just digital spirit guides taking zero liability for any of this. This site exists to gather the collective knowledge of practitioners like you. Verify everything and submit your feedback on the Series A Preferred Stock Equity Financing matter plan to improve the playbook. THIS IS NOT LEGAL ADVICE, it's a request for input.
This legal matter plan provides a structured workflow for AREA_CORP_MA cases, outlining the standard PROC_TRANSACTIONAL process. Utilize these tracking templates to manage your legal cases efficiently.
Conflicts check completed, engagement letter signed, and scope of work agreed with the client before any substantive work commences.
Verify all prerequisite documentation has been obtained, cross-reference against the statutory requirements for this matter type, and confirm compliance with practice direction protocols.
Prepare the relevant forms and supporting materials required under the applicable legislation, ensuring all mandatory fields are completed and all attachments are properly certified.
Draft and dispatch formal correspondence addressing the procedural requirements at this stage, including any required notices, requests for information, or proposals for resolution.
Virtual data room set up, all corporate and IP documents uploaded and audited, and pre-emptive rights holders identified.
Coordinate the collection and review of all financial documentation required for disclosure, including statements, valuations, and supporting schedules as mandated by the rules.
Each investor classified under the applicable s 708 Corporations Act exemption and supporting evidence (e.g. accountant's certificate) obtained and filed.
Verify all prerequisite documentation has been obtained, cross-reference against the statutory requirements for this matter type, and confirm compliance with practice direction protocols.
Conduct a thorough review of all filed materials to ensure compliance with court requirements, verify service obligations have been met, and prepare for the next procedural milestone.
Assess the strategic considerations for interim applications, prepare supporting evidence, and draft the necessary documentation for urgent or time-sensitive relief sought.
SAFE Notes - Y Combinator Standard: Y Combinator's standard SAFE (Simple Agreement for Future Equity) is the most commonly used convertible instrument in Australian seed rounds before a Series A. A SAFE is not a debt instrument and does not bear interest. It converts into preferred shares at the next priced round using a discount rate (typically 10-20%) or a valuation cap (or both). Practitioners must identify and review all existing SAFEs at intake, as they will convert into Series A preferred shares at closing and will affect the fully diluted cap table and the s 708 headcount.
FIRB Approval for Offshore Investors: Under the Foreign Acquisitions and Takeovers Act 1975 (Cth), a foreign person (including foreign funds, foreign government investors, and companies with foreign persons holding 20%+ interests) may require FIRB approval before acquiring a substantial interest in an Australian company. For national security businesses, the threshold is zero dollars. Practitioners must screen each investor for foreign person status early in the classification process - the FIRB approval process can take 30-90 days and must be built into the transaction timeline if triggered.
s 708 Headcount - SAFE Conversions Affect Offer Count: Each SAFE holder who converts at the Series A closing is receiving an offer of shares. If SAFE holders are not classified under a s 708 exemption in their own right, the conversion may count towards the 20-investor cap in the small-scale personal offer exemption under s 708(1).
Prepare the relevant forms and supporting materials required under the applicable legislation, ensuring all mandatory fields are completed and all attachments are properly certified.
Series A Preferred Stock Structure: A Series A typically involves preferred stock with: (1) a liquidation preference (commonly 1x non-participating, meaning investors recover their investment before common shareholders, but do not participate further); (2) anti-dilution protection (broad-based weighted-average is market standard - adjusts conversion price if shares are issued below the Series A price); (3) participation rights in board governance via reserved matters/protective provisions.
Term Sheet Non-Binding Nature: A venture capital term sheet is non-binding in substance except for the exclusivity/lock-up period (typically 30-60 days no-shop) and the confidentiality obligation. A Most Favoured Nation (MFN) clause in a SAFE or convertible note gives existing noteholders the right to the most favourable terms offered to any new investor - practitioners must check all existing SAFE notes for MFN clauses before the Series A term sheet is finalised, as MFN holders may be entitled to match or upgrade their conversion terms.
FIRB - Foreign Investment Review: If any Series A investor is a foreign person as defined in the Foreign Acquisitions and Takeovers Act 1975 (Cth), FIRB approval may be required before the investment proceeds, depending on the target company's sector, the investment amount, and the investor's country of origin. Practitioners must check the FIRB thresholds and sector-specific rules for each offshore investor at term sheet stage, not at closing.