Questions to ask your counsel before you sign

This article is general education written by World Enterprise Editorial. It is not legal advice. World Enterprise does not provide legal services and does not act as your lawyer. Hire your own counsel, licensed where your company is formed.

Founders sign agreements long before they feel ready to. A good lawyer is not there to make the decision for you; they are there to make sure you understand what you are signing, what it does to your company and what you cannot easily undo. The quality of that help depends partly on the quality of the questions you bring. This article gives you a structured list. It does not tell you what the answers are, because the answers depend on your documents, your jurisdiction and your facts.

How to get the most from your counsel

Counsel’s time is expensive and limited, so prepare. Send the document in advance and say what you want to learn. Before the call, write down in one paragraph what the deal is supposed to achieve for you, so that your lawyer can check the paper against your intent.

Ask for explanations in plain language and ask for the reason behind any clause you do not understand. If counsel says a term is “standard”, ask what that means in practice: standard for whom, and what would a different version look like?

Keep a record of what you asked and what you were told. Write down the date and who was present. You are not building a case; you are building a memory.

Y Combinator’s page on its SAFE documents carries a notice that is a good model for the attitude: it says users should consult a lawyer licensed in the country where the company was formed before using any of the forms. That is the right default for any agreement on this list.

Which agreement raises which kind of question

Questions that apply to any agreement

These come first, whatever the document is.

1. What does this document do, in two sentences? If counsel cannot say it briefly, ask what makes it complicated.
2. What am I giving up, and what am I getting? Ask for a list, including non-obvious items such as rights over future work, restrictions on what you can do next and obligations that survive the end of the agreement.
3. What happens if I want out? Ask how the agreement ends, what each side owes at that point and what survives.
4. What happens if the other side does not perform? Ask what remedies exist and how realistic they are.
5. Which parts are negotiable, and what would you ask to change first? Counsel often knows which terms the other side tends to accept changing.
6. What would a reasonable person misunderstand about this? The answer often finds the clause that matters.
7. What do I need to do after signing? Filings, notices, record keeping and deadlines are easy to miss.

Questions about an investment agreement

If you are issuing any instrument that gives someone a right to shares, you are entering regulated territory. The questions below are for your lawyer. They are not a guide to the terms of any particular instrument.

• Is this a securities offering, and which legal route does it use? The SEC states that every offer and sale of securities must either be registered or rely on an exemption. Ask which one counsel is relying on, what its conditions are and what you must do to stay within them.
• Who may I talk to, and how? Some routes restrict how an offering may be advertised or who may take part. Ask what that means for your conversations, your website and your social posts.
• What filings are required, and when? Ask who will prepare them and what the deadlines are, including at the state level.
• How does this instrument change my ownership? Ask for a worked example using your own ownership table, showing what the table looks like before and after, under a range of future events. The point is to see the effect, not to rely on a formula in your head.
• How does it interact with what I have already issued? Earlier instruments can affect later ones. Ask counsel to map them together.
• What rights does the investor receive beyond the money? Information rights, side letters and rights in future rounds all matter. Ask for a list.
• What do I promise about the company? Representations are statements you make that may later be tested. Ask what each one commits you to and what evidence supports it.
• Do I need tax advice? Ask whether the structure has tax consequences for you or the company, and whether to involve a tax adviser.

We have deliberately not described the economic terms of any instrument here. They differ between forms and versions, they change and misreading them is expensive. Use the published materials from the source of the form, plus your counsel’s explanation.

Questions about a contractor or team agreement

For engineering teams, the agreement with a freelancer, agency or dedicated team determines who owns the output. The U.S. Copyright Office explains that work by an independent contractor is generally not a work made for hire unless it falls within defined categories and a written agreement says so, which is why an explicit assignment matters.

• Does this agreement assign the work to the company? Ask how, and what is excluded.
• What about material the contractor brings with them? Ask how pre-existing tools and code are handled and what license the company receives.
• Who may the contractor work for at the same time? Ask whether there are conflicts or restrictions.
• How is confidential information protected, and for how long?
• What happens to the work and to access if the engagement ends? Ask how handover works, and what is delivered.
• Who is responsible for the people the contractor engages? If a provider uses its own staff or subcontractors, ask who is responsible for them and how the chain of assignment is maintained.
• Is the arrangement correctly classified? Ask whether the person is properly treated as a contractor or an employee under the law that applies.

Questions about customer contracts

• What have I promised about availability, support and security? Ask for each promise to be restated in your own words and checked against what the team can deliver.
• What liability am I accepting? Ask what the limits are and what is excluded.
• Who owns the data, and what may I do with it? Ask about customer data, derived data and usage data.
• What happens to the data at the end? Ask about export, deletion and retention.
• Does the customer get rights to my code or my brand? Ask for a plain list.
• Are there terms that bind me to this customer for a long time? Ask about renewals, exclusivity and price commitments.

Questions about the company’s own foundation

• Are the founders’ roles and ownership documented, and do the agreements address what happens if a founder leaves?
• Has the company assigned to itself everything it needs? Has every contributor signed?
• Is the company in good standing where it is formed and where it does business?
• Are the company’s records, minutes and ownership table up to date?

What to do with the answers

After each conversation, write a short summary in your own words and send it to counsel to confirm. Add the signed documents and the summary to your records. If a clause surprises you, ask for it to be changed before signing; it is much harder afterwards.

If you are unsure whether you can afford legal help, say so early. Some lawyers offer fixed-fee reviews for specific documents, and some organizations provide guidance for small businesses. Ask what is available where you are. Do not use an agreement you do not understand because it is cheaper.

What this article does not know

We are not lawyers. We cannot tell you what any agreement says, what is normal in your market or what your counsel will advise. We have not described the terms of any investment instrument, and we have not used statistics. World Enterprise makes no promise of funding, and nothing here suggests that any company will receive it. The purpose of this article is smaller: to help you ask better questions of the person whose job it is to answer them.

In the data

These figures describe U.S. businesses in general, not WE’s results. Each one names its source.

Show the data as a table

Median ownership given up in each round, by stage

Round	Median dilution
Seed	about 19%
Series A	about 18%
Series B	about 13%
Series C	about 9.5%
Series D	about 4.9%

Quoted one by one from the publisher’s report; the figures are approximate as printed.

Source: Carta, State of Private Markets: Q1 2026 , 2026-05-29

Retrieved 2026-10-15. Single figures quoted from the report as printed; no dataset is re-hosted.

Sources

1. SAFE (Simple Agreement for Future Equity) documents, Y Combinator . Accessed October 6, 2026.
2. Exempt Offerings, U.S. Securities and Exchange Commission . Accessed October 6, 2026.
3. Circular 30: Works Made for Hire, U.S. Copyright Office . Accessed October 6, 2026.

Spotted an error? Read how we handle corrections in our editorial policy.