Investors Agreement

Legally Mapping The Allocation of Raised Finances



An investor’s agreement is the legal document of assignments that are used to assist in articulating the terms of an investment. The agreement relates to the details of how the parties will decide the proportion of funds invested will be allocated.

It regulates the operations between the existing shareholders of the company and the new shareholders. It becomes a term sheet that outlines the conditions between the company and the investors.

Importance of Investors Agreement

Safeguarding Investors Best Interests


Allocation of Funds

Outlining the utilization and purposes of the allocation of the invested funds. The fundraiser agreement clearly defines how the funds will be utilized.

Background check

Before entering into an agreement with a partner there need to be carried out appropriate background checks to ensure confidence in building relationships.

Protecting both parties

Monitoring if the benefitted company is keeping to the agreement relating to the contract that has been outlined.

Components of an Investors Agreement

Getting an investor for companies can be a great contributing factor for entrepreneurs. In order to maintain the investor relationship, an investor agreement needs to be carefully drafted. Usually, the investor’s agreement contains the following terms.

Terms of investments
Risk management
Terms of ROI
Rights of the investor
Purpose of investment

Value Proposition

Due Diligence

Carrying a carefully orchestrated background check on the investors.

Drafting the Agreement

Ensuring every necessary aspect is included in the agreement to safeguard both part interests.

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