Below is a practical, startup-focused checklist of legal considerations when taking investment from Australian venture capitalists (VCs). This is general guidance — laws, thresholds, and tax rules change, and outcomes depend on facts — so engage an Australian corporate lawyer and tax adviser early.

Corporate & capital-structure matters

• Share classes and rights: be clear on the economic and control rights attached to ordinary vs preferred shares (liquidation preferences, dividends, conversion rights, anti‑dilution, voting rights).
• Cap table effects: model dilution (current + future rounds, option pool increases) and how investor protective provisions affect follow-on fundraising.
• Vesting & founder protections: ensure founder vesting, acceleration on termination/change of control, and IP assignment are in place before investment.

Term sheet & commercial negotiation points

• Key economic terms: pre/post‑money valuation, option pool size and who bears the dilution.
• Liquidation preference mechanics: multiple vs single, participating vs non‑participating.
• Anti-dilution protection: full ratchet vs weighted average and practical consequences.
• Control and governance: board composition, observer rights, protective provisions (matters requiring investor consent), and information rights.
• Future financing: pro‑rata (pre‑emptive) rights, rights of first refusal, drag/tag, registration/transfer restrictions.
• Exit terms: transfer restrictions, buyback rights, IPO registration rights, and tag/drag sale mechanics.

Regulatory compliance

• Corporations Act obligations: directors (including investor directors) have statutory duties (care and diligence, act in company’s best interests, avoid conflicts). Make sure directors understand duties.
• Fundraising and securities law: ensure offers of securities comply with the Corporations Act (and exemptions where used). Public offers and disclosure rules are different from private raises.
• Foreign Investment Review Board (FIRB): foreign investors may trigger notification/approval obligations depending on investor type, investor percentage and industry (real estate, media, certain tech/critical infrastructure). Check FIRB thresholds early if investors or founders are non‑Australian or if sector sensitive.
• Industry-specific licensing: fintech, healthtech, edtech, crypto, gambling, and other regulated sectors will have additional licensing/consumer‑protection rules — confirm regulatory requirements before scaling.
• Anti‑money laundering / KYC: VCs and platform investors will do KYC/AML checks; you must provide accurate beneficial‑ownership and identity information.

Intellectual property & employment

• IP ownership and assignment: ensure all employee/contractor agreements assign IP to the company and include moral‑rights waivers where needed. Fix any historical gaps before term sheet.
• Confidentiality: robust NDAs and trade‑secret practices.
• Contractor vs employee classification: Australia’s tests for employee status can be strict — misclassification risks payroll liabilities, superannuation, and penalties.
• Employment law: notice periods, unfair dismissal laws, workplace entitlements and superannuation contributions; local rules differ from other jurisdictions.

Tax & incentives

• Tax structuring: determine whether investor or founder tax positions (and double tax treaties) affect structure; be careful with cross‑border share transfers and withholding taxes.
• R&D tax incentives and grants: eligibility rules exist and must be adhered to (register and document R&D activities).
• GST and payroll tax: understand GST on services/products and payroll tax liabilities at the state level.
• Employee equity tax rules: know the taxation timing and concessions for employee share schemes (ESS) — reporting and compliance obligations exist.

Due diligence & disclosure

• Clean data room: corporate records, cap table, contracts, IP evidence, employee agreements, past financing documents, financials and tax returns.
• Warranties & indemnities: expect investor due diligence and negotiation of reps/warranties. Avoid material undisclosed liabilities.
• Disclosure obligations: be transparent about litigation, regulatory issues, material contracts and cap table complexities.

Commercial contracts & third parties

• Material contracts: supplier/customer contracts, IP licences, distributor agreements, major leases — review assignment/change‑of‑control clauses.
• Debt & security: understand any secured creditors and intercreditor agreements; VCs will want to know priority of claims.

Governance & ongoing obligations

• Reporting and information rights: investors typically require monthly/quarterly financials and board packs — ensure capacity to comply.
• Board dynamics and decision‑making: define the board’s role, reserved matters and escalation paths.
• Share transfer restrictions and buy‑backs: procedures for onboarding new investors and for founders leaving.

Dispute resolution & governing law

• Governing law & jurisdiction: Australian VCs typically prefer Australian law and courts (or arbitration). Understand where disputes will be heard and enforceability of judgments.
• Escalation and deadlock procedures: include mechanisms for resolving board deadlocks or investor‑founder impasses.

Practical administrative items

• Stamp duty and transfer taxes: some Australian states have stamp duty rules (or other transfer obligations) affecting property and in rare cases business asset transfers — check state rules.
• ASIC filings & company maintenance: ensure timely filings with the Australian Securities & Investments Commission (ASIC).
• KYC & AML documentation: have corporate and ultimate‑beneficial‑owner documents ready.

Behavioral and negotiation tips

• Get legal and tax counsel early — ideally before signing a term sheet.
• Keep the cap table simple and documented; fix historical issues before investor diligence.
• Prioritize which terms matter most (control vs economics) and be prepared to compromise on less critical items.
• Understand the practical implications of clauses (e.g., a liquidation preference of 2x participating can make common equity almost worthless in many outcomes).

When to use Australia‑specific advice

• If investors or company are Australian, or investors insist on Australian governing law, use Australian lawyers.
• If investors or founders are offshore, get cross‑border tax and FIRB advice.

If you’d like, I can:

• Provide a one‑page term‑sheet checklist of the clauses to watch, or
• Draft a short due‑diligence checklist tailored to your stage (pre‑seed vs Series A).

(These are general points — for binding advice and to check current FIRB thresholds, regulatory developments or tax rules, consult an Australian corporate lawyer and tax adviser.)