Financing is an essential element for establishing a new business, launching a new product or service, or expanding an existing business through internal growth or acquisition.  For example, cash is necessary in order for a company to continue operations while awaiting payment from customers and anticipated increases in sales; expand the volume of sales of existing products through increased advertising and promotion; develop or acquire new technical skills and assets, including acquisitions of other firms; enter specified new markets, including new facilities and recruitment of personnel; create new products that address a specified market need, including research and development; replace or upgrade aging or obsolete facilities or equipment; or comply with regulatory requirements, such as health standards or environmental laws.

It is likely that entrepreneurs and managers will, regardless of the size of their businesses, need to venture into the world of finance several times over the life cycle of the enterprise.  In that world they will encounter a wide range of participants, including banks, venture capitalists, investment bankers, government agencies, and business advisers, each of which will provide unique resources and experience.  In addition, they will be exposed to the legal requirements and institutions of their own domestic “financial systems”, which are the processes that have emerged for channeling funds from agents with surpluses of capital to agents with capital deficits, as well as the requirements and institutions of financial systems in other countries where they might be seeking capital and/or otherwise conducting business.

Capital suppliers have become increasingly innovative in devising financing techniques that are tailored to their needs and the goals and objectives of the businesses they serve.  However, before managers can begin the onerous process of securing funding, they must develop a careful plan for identifying the financial requirements of the business, the terms upon which the company hopes to secure the necessary funds, and the potential sources for the funding.  Of course, this assumes that management has already developed a “plan” for the business, product, concept or service, and has developed an outline of all of the requirements for successfully completing the plan (i.e., capital resources, human resources, other assets, marketing strategies and tactics).  In addition, in order to be effective in raising and managing their capital, managers must also develop and implement financing strategies supported by a wide variety of specific tools such as budgeting and forecasting and a strong internal finance department that is responsible for important core responsibilities and activities such as controllership, financial reporting, bank and investor relations, financial planning and analysis, treasury, tax reporting and compliance, internal controls, corporate development and participation in strategic initiatives such as mergers and acquisitions.


Business Transactions Solution on Thomson Reuters Westlaw contains a transaction-based practice system for the life cycle of a business entity. Each transaction structures itself around a module design, including transaction summary, memorandum analysis, master forms needed to execute the transaction, commentary analyzing every clause or provision of the form, drafting and review checklists, and specialty forms. The unlimited-use subscription provides regular updates, including new master forms, commentary, checklists, and specialty forms.

Legal Compliance Checkups: Business Clients.  The questionnaire format of this multivolume work shows how to elicit answers, make a diagnosis, and recommend an efficient, safe course of action for your business clients. Each chapter provides business guidance in specific business activities, including forming contracts; buying and selling a business; franchising; operating in the global marketplace; counseling on insurance, pension, securities, and product liability issues; borrowing money; contracting with the government; and resolving patent, copyright, and trademark-related problems and issues. Topics include business organization, estate planning, labor relations, real estate, securities, patents, computer software, advertising warranties, environmental law, and transportation and distribution.  Features include showing how to assess the “legal health” of your clients and suggestions on how to apply the right remedies to legal pitfalls in your clients’ activities.

Introduction to Finance

Training Materials: Counseling the Finance Function

Client Executive Summary: Financing Activities

Client Executive Summary: Offering Documents_

Securities Law Compliance

Securities Law Compliance Questionnaire

Venture Capital

Client Executive Summary: Sustainable Investing

Business Counselors Training Materials: Venture Capital Financing

Series A Preferred Stock Summary of Terms

Investors’ Rights Agreement

Commercial Debt Financing

Business Counselor’s Training Materials: Commercial Debt Financing


The Sustainable Entrepreneur’s Library of Resources for Finance consists of six Parts.  Part I discusses financing activities and the roles and responsibilities of the finance function typically led by the chief financial officer (“CFO”).  The Part begins by a discussion of the scope of financing activities and the factors that should be considered when developing a financing strategy for the company.  The Part includes an overview of the sources of funding and a discussion of the transactional aspects of common financing methods including venture capital, debt financing from commercial lenders and public offerings. The Part also discusses how the finance function should be organized and managed with a particular focus on the duties and activities of the CFO in various functional areas such as controllership, treasury, reporting, financial planning and analysis and tax, as well as the increased responsibilities of the CFO with respect to corporate governance and internal controls.

Part II creates a foundation for many of the issues and activities covered elsewhere in the Library by describing the types of securities that will be offered and sold to investors.  Assuming that the business is operating in the corporate form, a choice must be made between “equity securities”, such as common or preferred stock, that provide investors with a true ownership stake in the corporation, or “debt securities” that provide investors with enforceable contractual rights against the corporation to recover the amount of capital advanced for use in the business but no permanent ownership interest in the corporation.  The choice between equity and debt securities depends on a variety of factors described in Part II and companies must choose carefully and pay close attention to the terms of the securities and their impact on the business of the company, existing shareholders and anticipated future financing needs and opportunities.  Prospective investors will have their own preferences based on how they wish to allocate their funds and balance their investment portfolios.  In many cases, the parties agree on a “middle ground” that involves the issuance of debt securities coupled with rights in favor of the investor-debtholders to convert those securities into equity and/or invest additional capital in exchange for an equity interest.

Part III begins the discussions of various stages of funding for companies by focusing on raising the “seed capital” required to complete the initial business plan and the first version of the product prototype.  While the amount of seed capital that may be required may be quite small in relation to the money that will eventually be needed to fully develop the business model, finding sufficient funding from the right sources can be a frustrating experience, even for founders who have previously been successful in raising venture capital funding for prior companies.  Approaching friends and family can be uncomfortable for the founders and they need to be sure that they carefully explain the risks to persons who generally have little experience with this type of investment.  So-called “angel investors” often promise access to connections and advise based on their own successes; however, caution should be exercised when taking money from professional investors with whom the founders do not have a pre-existing relationship.  Venture capitalists set aside only a limited amount of funds for seed financing and “accelerators” and “incubators” often demand a generous percentage of founder’s shares while falling short on their promises of support.  Also not to be ignored is that raising seed capital will be the company’s first step into the world of securities law regulation and bringing new stakeholders into the company beside the founders.

Part IV opens with an extended discussion of the advantages and disadvantages of venture capital funding and an overview of the stages of development for companies that are supported by venture capital investors.  The Part then continues with coverage of all of the key steps in launching and maintaining a business relationship with a venture capitalist including a discussion of how venture capital funds operate, how to local potential venture capital investors, the factors that venture capitalists general consider when making their investment decisions, the questions that founders and managers should ask when evaluating and selecting venture capital investors, the terms of securities typically issued to venture capitalists, the considerations that go into valuation and pricing for a venture capital financing and, finally, the covenants and agreements of companies and their managers that are generally included in venture capital deals.  The Part also covers the procedures used by venture capitalist to monitor the performance of their portfolio companies and exit strategies.

Part V begins with a discussion of various factors to be considered when analyzing and comparing national financial systems including investment and savings, growth and financial structure, risk sharing, information provision, corporate governance and political and legal factors.  The Part continues with an investigation of the determinants of capital structures in different countries and then compares and contrasts various types of financial markets around the world: public financing markets, bank financing and private equity markets (including venture capital).

Part VI provides an overview of finance in various developing countries.  In each instance attention has been paid to banking systems and stock markets, as well as private capital markets to the extent that they exist.

A complete Table of Contents for the Library is available here and information regarding ordering materials from the Library can be obtained by contacting


West Legal Ed Center:  Click for list of all programs presented by the Institute on West Legal Ed Center. Programs relating to finance include several videos prepared for the Beyond the Bar training initiative and the following webinars (available on demand):

Business Counselor Institute on West Legal Ed Center

  • Counseling the Finance Function (05.2016)
  • Equity Financing (05.2016)
  • Debt Financing (05.2106)

Beyond the Bar Training Programs

  • Counseling the Finance Function
  • Offering Documents and Procedures
  • Equity Financing
  • Debt Financing
  • Venture Capital Financing
  • Commercial Debt Financing


Finance Articles from Business Counselor Institute

Finance Articles from Sustainable Entrepreneurship Project