Venture capital investments are becoming increasingly popular and widespread in Singapore and Southeast Asia, and this trend is expected to continue. Each investment may be unique, but founders and investors (and their respective advisors) don`t need to spend time and cost preparing and negotiating any investment from scratch, especially for start-up financing. In order to reduce transaction costs and reduce friction during the negotiation process, Investment Venture Capital Agreements (VIMA) offer a series of models for use in seed cycles and start-up financing. A concept sheet is a legal document that describes the agreements between investors and the company`s founders. If the two parties agree on the terms in an appointment sheet, the agreement can be reached, and the investors actually buy shares in the company. The concept sheet contains several terms, but the most negotiated are these: liquidation preferences for investors: not all investment agreements are established in the same way. One of the most important factors that affect an investor`s final payment when your business sells is the liquidation preference. The liquidation preference indicates who is paid first when the business is sold. Liquidation can also take place when the business dies and assets are sold to reduce losses. Individuals who hold advance shares are usually reimbursed before anyone else. A venture capital investment is a partnership between an investor and a growing company. To create a productive relationship that supports a fast-growing business, the partnership must be good for both the entrepreneur and the venture capitalist.
In order to ensure the fairness of the agreement and to promote the interests of both parties, pay particular attention to the appointment sheet and the evaluation of your company. In other words, the risk industry undergoes an expensive and inefficient process of “reinventing the disc tire” every day. The provision of a range of industry-wide standard documents, which can be used in venture capital financing, unlocks the time and cost of funding and, as a result, frees up the client`s time to review hundreds of pages of unknown documents, so that the parties can focus on high-level issues focused on the compromises of the agreement. The type of investment (equity bonds or convertible bonds): convertible bonds are a hybrid type of investment.