Tony Davis is a Director at Avid.legal, a Wellington law firm focused on supporting New Zealand’s high-tech and high-growth ventures. With deep experience helping founders navigate equity, funding structures, and investor negotiations, Tony has worked alongside some of Aotearoa’s most ambitious startups as they scale globally.
This guide distills those lessons into a clear roadmap for Kiwi founders to manage legal essentials without draining time or cash. From understanding founder equity to making sense of SAFEs, CLAs, and ESOPs, Tony shares practical, founder-focused insights to help startups avoid pitfalls, accelerate progress, and stay investor-ready.
Tony Davis | Avid.legal
builds The Kiwi Startup Founder’s Guide to Managing Legal Before the First Dollar In
A practical playbook for early-stage founders to cut through the legal noise, understand the essentials, and make smarter decisions on the road to their first investment or customer.
Startup Legal
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Bonus! Downloadable NZ Startup Legal Templates
Part 1: Company Formation
You’ve got the idea. You’ve started building. Now it’s time to make it real.
Part 2: Founder Equity
How founder equity works, why dilution happens, and how to fairly split, issue, and vest shares to protect co-founders, motivate teams, and attract investors.
Part 3: The First Capital Raise
A NZ founder’s guide to raising capital, comparing priced vs unpriced rounds (SAFE/notes), post-money SAFEs, and legal investor rules.
Tony’s What Founders Want Startup Legal Glossary
For comprehensive guide to terms commonly used in the NZ high-growth and investment space, check out this excellent glossary from Angel Association of New Zealand: https://www.angelassociation.co.nz/resources/glossary/
Basic Terminology
Board | The board of directors (or just "the board") is the group of people appointed to govern the company |
Business | Your business is the thing your company actually does — the product or service you’re building, selling, or scaling. |
Cap Table | A table describing the capitalisation of a company. The cap table should describe the number, type and percentage of shares (and convertible securities) owned by each shareholder / investor. |
Constitution | The constitution is like the rulebook for your company. It adds to or replaces the default rules in the Companies Act. |
Director | A person validity appointed to govern and oversee a company on behalf of its shareholders |
Shareholders | Those individuals or entities who own the shares |
Shares | Shares represent ownership in the company. Think of ownership like a pie, and the shares are the slices. Shares can come in different types, but we will get into that later. |
Capital Raising Terminology
Pre-Money Valuation | The value of your company before new investment goes in. |
Post-Money Valuation | The value of your company after the investment lands. It’s your pre-money valuation plus the new capital raised. |
Round Size | The total amount of capital you’re raising in a given funding round — whether it’s from one investor or several.
You’re usually targeting enough to get to your next big milestone (whether that’s product launch, revenue, or market validation) so that your next raise can happen at a higher valuation.. |
Minimum and Max Round Size | Sometimes your raise is framed as a range (e.g. $500k–$1.5M):
• Minimum: The least you’re willing to raise for the round to proceed — below this, the round doesn’t happen. Investors will also want to know that this amount is enough for you to make a difference.
• Maximum: The cap on how much you’ll accept, even if there’s more demand. Too much capital early tends to create too much dilution.
This helps create structure and urgency for investors, and ensures you're not raising too little or taking more money than you can put to good use. |
Price per Share | The value of one share in your company. It’s calculated by dividing the pre-money valuation by the total number of shares on issue (including any shares that would be issued if options or convertible securities were exercised). |
Dilution | The reduction in your ownership percentage as you bring in investors. |
Exit Event / Liquidity event | The moment founders and investors turn shares into cash. Usually through a company sale. |
Term Sheet | A short form document summarising the key terms of your capital raising round. |
Pre-Seed Round | Often called the "friends and family" round, but can include angel investors or early backers too.
You’re raising a small amount to validate the big idea: customer discovery, market research, and MVP development |
Seed Round | You’ve proven there’s a spark, now it’s time to build a fire.
Seed capital is usually used to build your team, launch your product and prove you can acquire and retain real customers |
Series A | You’ve found product-market fit, now it’s about scaling. Series A is for companies with real traction who need capital to expand the team, scale customer acquisition, enter new markets and lockdown repeatable revenue |
Forward Thinking New Zealand Lawyers
Avid.legal is a team of forward-thinking New Zealand lawyers passionate about partnering with high-growth companies, especially in the fast-moving technology sector. We believe in the power of Kiwi entrepreneurs as global problem solvers and stand alongside them as both legal experts and advocates. With innovation at our core, we’re dedicated to strengthening New Zealand’s startup ecosystem and helping shape a future where technology and ingenuity drive sustainable growth.
