Investors Agreement

Legally Mapping The Allocation of Raised Finances

Overview

An investors agreement is the legal document of assignemtn that is 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 shareholder. It becomes a term sheet that outlines the conditions between the company and the investors.

Importance of Investors Agreement

Safegaurding Investors Best Interests

Allocation of Funds

Outlining the utilisation and purposes of the allocation of the invested funds. The fundraisers agreement clearly defines how the funds will be utilised.

Background check

Before entering int an agreement with a partner there needs to be carried out approporiate background checks to ensure a 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 maintan the investor relationship, an investor agreemtn needs to be carefully drafted. Ususally the investors agreement contains the following terms.

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

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 safegaurd both part interests.

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