An investment agreement is a legal contract between a company and an investor, whether an individual or an organisation. It sets out the terms of a capital investment and defines the rights and obligations of all parties involved.
The agreement establishes a transparent framework for cooperation and is of key importance, particularly when it comes to start-up funding.
Typical provisions of a shareholding agreement include:
- Level of participation and share ratios
- Voting rights and the right to be consulted
- Regulations governing the sale of shares
- Representations and warranties of the parties
- Rights to information and oversight
- Arrangements for future funding rounds
A carefully drafted shareholding agreement helps to clearly define expectations, avoid potential conflicts and protect the interests of founders and investors alike. At the same time, it lays the legal foundations for a long-term and successful partnership.
It is particularly important for start-ups to understand equity investment models at an early stage and to structure them strategically. innoWerft supports founders in preparing for discussions with investors, developing funding strategies and laying the foundations for sustainable growth and successful equity investments.