Model agreements can be downloaded from the CSA and SVCA website (click here to access the Singapore Law Watch and svca website). Each document contains an essay or explanation of the various clauses contained in the documents. The documents were also drafted on the basis of Singapore law and include Singapore law as a law in force and Singapore as a dispute settlement forum. The VIMA initiative aims to speed up the negotiation process between entrepreneurs and investors at an early stage of financing and to further reduce the costs and time of preparation of documents. The appointment sheet, subscription contract and shareholder contract contain options and rights more suited to a Series A financing cycle (as opposed to an initial funding cycle) and based on the following assumptions: Please note that VIMA does not provide the full range of potential options available or appropriate for early-period financing cycles , because they often depend on the transaction or the parties involved. Depending on the circumstances, the parties must therefore, if necessary, adapt the specific conditions of the documents to their needs. Additional documentation may also be required for an early funding cycle (for example. B the creation of the company, the agreement of other investors, the employment contract of the founders, etc.). However, we believe that the venture capital model agreements would remain relevant by providing a useful guide to the typical structure of funding cycles. According to the SVCA, venture capital investment in Southeast Asia was $2.7 billion in 2017 and $3.2 billion in the first 8 months of 2018. 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. Liquidation preferences for investors: not all investment agreements are the same. 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 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 form contains several conditions, but the most negotiated are these: take, for example, the standard shareholder contract, which defines the conditions that govern the rights and obligations of investors and founders as shareholders of the company. Certain provisions of the shareholders` pact relating to the rights of “Series A shares” should be taken into account in the company`s bylaws under the Corporations Act. In addition, it is customary to include certain provisions (which may also be included in the shareholders` pact) in the incorporation of companies, which is due to the fact that the Constitution requires a shareholder, whether or not he is a party to a separate agreement, and that remedies in the event of a violation of the Constitution may go beyond contractual remedies (which, as a rule, , are damages). In deciding whether to include it in the Constitution (beyond those prescribed by law), it should be considered whether it will be available to the public through CARA, while the shareholders` pact is subject to confidentiality obligations.