When small entrepreneurs talk about taking an extra investor, they usually say something undilble like, “We take an angel investor.” What they are not discussing is the many ways in which this investor can actually invest. But they should, because the different way an investor can invest in a business, radically change the deal you agree with. Almost all external investors will apply for an anti-dilution clause in any form. As a small entrepreneur, the goal is simply to understand how to negotiate the clause to best serve you. Among the many contracts and agreements that are available for all sizes and development, investment agreements and shareholder agreements remain two of the most useful, as they accelerate the process of transformation of the exercise or lack of proper power by shareholders and, more importantly, set the investment conditions for new partners. While an investment agreement establishes a contract for people wishing to acquire owners in a company, a shareholders` pact defines the rights of a new shareholder to the company. Over the lifecycle of each company, companies inevitably enter into a large number of ubiquitous agreements to implement a concept of development growth and promote the chances of success in the business market. It is essential to fully understand which agreements and contracts should be used in various negotiations, to properly apply the rights of shareholders and thus to succeed in your business. With the right articles, documents and contract templates, you can grow your own business towards greener pastures, with the certainty that each contract is safely developed to offer your business the most important benefits. If you are an enthusiastic spectator of Shark Tank, you will see that there are two types of investor sharks: Mr.
Wonderful and almost all the others. All other sharks generally make a traditional stock offering; For example, they invest $100,000 for a us$1,000,000 business valuation and take 10% of the business. This is called a traditional equity investment. If you are in a business relationship with shares or are already in such a business relationship, you can use an investor agreement to secure your fundamental interests. Whether you`re investing capital or owning an investor-backed business, an investor contract can help protect you. This means that if you offer additional shares limited to a high-level investor for employees or family or a small number of shares at a significant discount just to get them on board, they should offer the same discounted prices to the original investor.