Entrepreneur pit Manual how can you defend yourself in the face of powerful investors

capital financing is the most important to get the money, even if no financing can at least listen to investors, some may not be what depth, but it is very representative of the problem based on the experience accumulated by many investment, good at learning entrepreneurs will not meet a real "not worth a hair" investors.

, an investor tore up the letter of intent to invest, entrepreneurs cannot sipolian

The letter of intent

investment, and the list of clauses (Termsheet or TS) and other investment intentions in the same file, using the VC circle with practice gradually promote open, not in long history, the parties to the transaction is mainly depend on the "handshake" or oral agreement gentleman about, just the speed of development of the business world the more difficult to trust more and more and more dependent on the parties to the transaction contract, such as a written contract or later with more equivalent mode technology development appear (such as fax, mail and electronic contract etc.).

if you get an investment letter of intent, which means that investors agreed to hand. But don’t get too happy, entrepreneurs need to realize is that investment intent often only the intention of "a gentleman’s agreement", investment intentions usually specification file: this file clearly stipulated in the law is not binding, in addition to several provisions expressly agreed with legal effect (such as: confidentiality, exclusive and the dispute settlement clause etc.), the other including valuation, investment in commercial terms is not legally binding "a gentleman’s agreement".

The logic of the

letter of intent often lies in the fact that investors do not know enough about the company and that it is necessary to pass the due diligence process and to sign the final binding investment agreement after the completion of the agreed terms. However, investment intent is morally binding in the circle of professional investment, such as no accident, professional investors usually invested according to the investment agreement of intent, and ultimately determine the legal documents to the intention of the agreement is based on the most. Therefore, the importance of self-evident, the founder of the agreement should be understood before the core content of the investment intention agreement, the mainstream market practice and risk.

investors after the signing of the investment letter of intent, if not given proper reason not to complete the investment from the investment and financing circle is a justification for unethical behavior, including due diligence and find no major issues or risk disclosure of the company, certainly not included below said investors have no money.

for entrepreneurs, investors eventually decided not to vote for entanglement for the legitimacy of significance, it is important to have no good planning and arrangements, to prevent investors is not the result of investment, regardless of others without reason is justified. If the time is urgent financing, may have to agree to investors of exclusive rights; or he can schedule a month, but the six month exclusivity period may be in a very passive position; if the exclusion period is too long, can work to think: whether can let investors sign in the investment intention simultaneously or later.

Leave a Reply

Your email address will not be published. Required fields are marked *