These types of agreements are used by entrepreneurs, large law firms and investors at all stages of start-up creation and financing, from the development of ideas to the sale of shares and banknotes. Ideas Phase: For example, if you and a friend are working on an idea that could turn into a start-up, you can sign a cooperation contract with the founders, in which you will expose your working relationship, confirm the expectation that the work you are doing together will belong to a future entity, and outline steps of communication and conflict resolution that you will take to get you through all the quarrels that may occur. If you invest money in your potential business, you can sign a business creation contract (or a joint purchase agreement if you already have a contract) outlining precisely how much money each founder invests in the potential business, what shareholding everyone receives one after the other and who owns the intellectual property that was created. If you have a mentor or advisor, you can sign a standard model for the founding advisors with them and determine how they will help you and what compensation they will receive. Early stage: When you find a small amount of capital to start things, usually by friends, family or angels, it is customary to use convertible bonds, starting with a convertible credit note sheet and a Memorandum of Terms for Sale of Convertible Promissory Notes. There are no standard conditions that apply to seed investor investments – these types of investments can often be relatively informal and generally do not involve investor protection rules demanded by professional investors or formal investor groups such as angelic groups. It is a free collection of essential rights models for the creation and financing of startups, which are provided by startup lawyers, venture capital firms and accelerator programs. Angel Investing almost always requires a shareholder pact between the founding group and new investors. When considering or developing a proposal, you should keep these fundamental points in mind in the first place: the Seed Documents series was an attempt to take a more modern technology-based approach to seed financing. By creating a simple public standard, we hoped to help reduce the time and cost of these transactions. With version 3.0, we`ve tried to go even further in that direction, creating a series of documents that are easier to use and storing these documents in a place where they can grow and spread more efficiently.
The Seed Documents series is a standardized set of documents that can be provided quickly and easily for a seed investment: to finance a business properly, legally quickly and intelligently. Most Engel concept sheets contain basic confidentiality obligations (especially when proposed investors have not signed a confidentiality agreement). But in the midst of all these other dramatic changes, one aspect of start-up life has not changed at all: the legal documents used to finance these transactions. A typical venture capital investment package consists of five documents: two certificates, one legal opinion and two consents, and measures about 100 pages (without signature). These documents provide for a number of rights, preferences and privileges, some of which are essential to protecting investment from the outset, and others do not become important until after the company`s IPO. This amount of investment in documentation funding made sense if the investments were $3 million to $5 million, but for these smaller seed slices, it is simply exaggerated. 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.