A subscription agreement contains details of the purchase price for the sale of your company`s shares. It also contains the assurances and guarantees that each party gives to each other within the framework of the agreement. (For more information about subscription agreements.) The nature of the investment (shares or convertible bonds): convertible bonds are a type of hybrid investment. The contract starts as a debt and turns into a share purchase if the money is not repaid. As a general rule, both parties expect the debt to be converted into shares on an agreed date. A regular share purchase is a transaction in which an investor acquires a number of shares of a company at a predefined price. According to the SVCA, venture capital investments in Southeast Asia amounted to $2.7 billion in 2017 and $3.2 billion in the first eight months of 2018. Each year, the corporate sector completes several thousand funding rounds, each of which takes a lot of time and effort from investors, management teams and lawyers. Conservatively, the sector spends about $200 million a year on direct legal fees to complete private funding cycles. In an all-too-typical situation, lawyers start with documents from recent funding, go back and forth to bring the documents in a way that matches their shared vision of the appropriate language (which reflects the specifics of the cases and the best practices of the general industry), and all parties review many revisions in black, in the hope of: avoiding significant problems, while the documents slowly move to their final form. Please note that VIMA does not provide the full range of options available or appropriate for early funding rounds, which often depend on the transaction or the parties involved.
Depending on the circumstances, the parties may therefore have to adapt certain conditions in the documents to their needs. An early funding cycle may also require additional documentation (e.g. B the creation of the company, the agreement of other investors, the contract for the creation of work, etc.). However, we believe that venture capital investment model agreements would remain relevant by providing a useful guide to the typical structure of funding cycles. Liquidation preferences for investors: Not all investment contracts are the same. One of the main factors that influence an investor`s final payment when your business sells is liquidation preference….