Investment agreements are contracts used when businesses raise funds from investors. They outline the terms under which investors provide capital to the business, and what they receive in return. These agreements are crucial to protect both parties and ensure clarity on rights, responsibilities, and expectations.

 

The investment agreements are tailored for the specific circumstances and nature of the business, and can take a variety of formats.  Typically, they will deal with -

 

• The type of investment: whether it is “equity investment”, which means the company issues the investor with shares in exchange for the cash injection; debt investment, in other words a loan; convertible notes, which means that the investment starts off as a loan, with a right to convert it to shares at a later date; or an agreement to provide the money up front, and shares later on, called an ‘agreement for future equity’.

 

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