Before making a deal between an investor and an innovator, you should check the terms of the investment agreement so that they meet all the necessary criteria. It is important for the innovator to pay attention to the honesty, transparency and fairness of the requirements specified in the contract. In fact, the investor himself should be focused on the same criteria, for which you need to look at the presence of all the necessary legal documents of the startup team.
In particular, when concluding an investment agreement, you can prescribe options for startup employees or the possibility of holding a director accountable if he does not manage the startup project.
After the initial analysis of the contract, the procedure for preparing the project for the transaction or checking the project in the interests of the investor, due diligence, which includes structuring the transaction and its support in accordance with the laws of the country in which it is concluded, follows. Due diligence is the verification of audited accounts, management reports, patent searches, the review of recommendations and a track record and any other information and / or documents that are necessary to make a decision on investments or control their use. ⠀
In addition, the negotiation process on the startup's investment intentions can also be included here. The development of an agreement of intent, the volume and structure of investments, obligations and remedies, precautions for the investor, and the stages that must be passed in the process of conducting a comprehensive examination of a startup.
Therefore, the amount of expert workload depends on the startup business, the stage of its development and the number of team members.
An important point that you should definitely pay attention to when concluding an investment transaction is corporate governance, which includes the development of a management structure in the company, corporate contracts; as well as tax advice to participants in investment transactions.
If you become a member of the EX1P business accelerator, then experienced project lawyers will help to take into account all the important points of the investment agreement with further legal support for the startup project at all stages of its existence, which guarantees the success and profitability of any startup.
It is very important at what stage of startup development the investor enters the project. The most aggressive moment when the startup is at the first stage is ideas, but then the investor can become one of the main participants in the creation of the project and get the maximum profit from the implementation of the startup itself.
As a rule, the most aggressive investors can simultaneously enter into 5-10 projects that they invest. According to statistics, out of 10 startups invested in the first stage, one can cover the costs of the rest and bring tangible profits.
The amount of investments in the early stages ranges from $ 3-10 thousand per startup, this money is necessary to verify the business model.
When an investor enters the second stage of startup development, when there are already first sales, then we are talking about amounts from $ 100-500 thousand and the risks of losing money are much lower. It all depends on the competent calculations of financiers and, in general, on the investment proposal.
At the third stage, when the money is needed to scale the business, it is more difficult to enter the project, since the shares in the business can already be distributed, and it is difficult to control its part. However, it all depends on negotiations, competently executed legal documents, calculations of financiers and other factors.
Therefore, if you want to invest in startups, you should contact the business accelerator, where you can choose a promising startup for investing, further participating in its development and making a profit.
One of such business accelerators operating in Ukraine is EX1P, which, thanks to the use of modern IT solutions, allows you to protect and guarantee the legitimacy of all transactions carried out online on the platform. The project is registered and legally drawn up under British law, which makes it possible in case of disputes to apply to international English arbitration, the decisions of which are binding on the territory of any state.
The CEO of EX1P