After agreeing that the investor may have legitimate reasons for requesting appropriate documents, the objective of interested parties should be to establish and regulate documents effectively and at a lower cost. Legal documents (in the author`s opinion) should be prepared on the basis of fairness and fairness. As a founder, you should be aware that an investor has a number of legitimate protections that he will reasonably need in documentation (z.B. that their likely minority position is not diverted by your continued majority control over the company in which they invest). The terms of the investment depend on the type of financing the company needs (for example.B. Is the investor required to proceed with multiple financing cycles? Should the investor provide immediate interim financing before the main investment round?) and the nature of the financing agreements will determine the negotiating power of the parties in negotiating the investment agreement. Many companies, from start-ups to companies at a later stage of development, may need an injection of funds at some point. This may be to finance a particular project or simply to allow the company to grow faster than it would otherwise be. Private companies may attempt to raise this money from family and friends or a bank through a formal loan.
However, an injection of funds can also be made through interested investors through a cash investment in the company in return for an equity in the company. Our goal is simple: to promote sectoral legal documentation in the UK, so that investors and entrepreneurs can focus on deal-specific topics. This will inevitably save time and money and follow the precedent in the United States. We encourage all parties to use these documents as a starting point for their investments. At least your investor will want to see that his or her ownership shares (in shares) are properly documented, as was issued on behalf of the investor. This is (in itself) some red tape, even if it is not scandalous for an investor to subscribe shares solely on the basis of the widely held statutes of an English limited company (i.e. the Corporate Law – “model status”). In general, investor lawyers will prepare the documents (although the company is able to instruct lawyers on what is designed as a market practice document – which is intended to assist in participation and which are designed as reasonable and impartial documents between the parties).