There is no doubt that a successful and developing business attracts investors, and having investors is a great thing for a company. That is why it is essential to meet their expectations. According to an Article by Accion, one of the most important things that professional investors look for in a company is a clear investment structure, and part of it includes a proper investment contract. Therefore, before you make an investment transaction, you need a well-written investment agreement. What is it, what is such a document and why is it important? Find out all about this business agreement by reading this article. The use of standard documents (or recognized documents) contributes significantly to a quick and effective investment, and therefore – a design approach is to ensure that a certain set of standard documents is used for project drafting and then verified by lawyers (proposed changes to standard documentation are clearly highlighted). This removes a lot of time from the thought process, so that details can be targeted by those who check the documentation. In the investment agreement, there may be a provision that indicates the intention of the parties to try to withdraw, for example. B a listing of the company on a recognized exchange or a sale of the company within a specified period (usually 3 to 5 years). This intention is generally related to the recognition that an investor will not provide any guarantee or compensation for the company`s operations and business in the event of an exit, along with other guarantees as to its ability to sell its shares. Investors establish that certain conditions must be met before the first tranche of the investment can be closed. These conditions may include that all existing shareholders (and in particular the founders) and the company should be parties to the agreement, although it is possible that not all minority shareholders can be non-partisan if there are many. No matter how well written your investment contract is, if it doesn`t have the exact content, it still won`t justify its purpose.
That is why it is important to know what such a document is. An investment agreement is a business document that contains important data on an investment agreement.