Angel Investing almost always requires a shareholder pact between the founding group and new investors. When considering or developing a proposal, keep in mind these fundamental points: common shares are residual value shares of the same class issued to the founders of a startup. Convertible preferred shares are shares that have a liquidation preference over common shares (with Engel transactions, usually the initial price of the investment) and can be converted into common shares of residual value. Most Engel concept sheets contain basic confidentiality obligations (especially when proposed investors have not signed a confidentiality agreement). Without a standard trading style, startups and angels end up turning their wheels into negotiations. In this context, many angelic groups have attempted to standardize their concept sheets in order to streamline the consideration and resolution of some of the key issues (such as corporate governance) that startups and their investors face. If you are an angel who negotiates with a company or company on the way to a tour of angels, you should take a look at the one-way concept sheet of Basil Peters. It is full of good ideas on how to reach an agreement without huge legal bills. Angel investment structures vary, but angels usually invest in one of three types of securities: I`m not a fan of convertible bonds as a form of angel investment. When I make an angel investment, I prefer to rent the tour and do a “series A light” (simple terms, but always a preferred instrument.) Basil Peters has published a series of articles on Angel`s Blog, which talks about convertible note issues for Angel Investing, offers exchangeable shares for Angel Investors and even offers a one-page sheet for Angel`s Investors.
Your conversation with the angels (even passive ones) does not end at the end. Regardless of the actual conditions of the shareholders` pact, it is worth recognizing that the quality of a founder`s personal relationship with his investors informs the tone of corporate governance. This can be a mixed blessing. It allows founders and angels to achieve stylized arrangements that correspond to circumstances, and an angel`s terms can sometimes be easier to “digest.” The fund, along with all union investors (the “investors”) acquire common shares (the “shares”) at a price of USD per share. The global cycle for all investors is , by which the fund – invests to acquire a total of shares. As long as investors hold their shares and up to a liquidity event, they have the right to exchange them for the same type and class of securities issued by the company (the “new securities”) in any financing follow-up if these new securities have rights greater than the shares.