lead: you most need to guard against the right of redemption terms.
last week it real Fund released two pages of "SPA" investment contract, compared with the traditional hundreds of dozens of pages of the contract, the terms of the investment is indeed very friendly. The angel Bay is recognized business practices, as the industry’s leading angel investment institutions, public investment contract is to need courage.
actually, angel Bay is also a brave pioneer. Since 2011, we have a tisiwi.com page on the web page of a "investment letter of intent". In the business before the announcement, we have already used in minimalist version of the "investment contract". Now, we are also open on the site directly Angel Bay version of the investment contract.
(1) you need to be vigilant when financing the terms of the redemption of
each fund has its own standards and norms of conduct. Investors and entrepreneurs, one would like to play a willing to endure, it is the rules of the game, in fact, understandable.
, however, in the financing time, especially in the angel stage financing, all entrepreneurs need to be vigilant is the right to redeem the terms of the investment.
general terms of Redemption:
if the company failed to achieve the qualified listed on the delivery date after the five anniversary of the investment within the party is entitled to require the company to the original investment amount plus XX% years of compounding for the price, all investors to repurchase shares.
‘s evil redemption clause:
if the company failed to achieve the qualified listed on the delivery date after five years, the investment party founder to the original investment amount plus XX% years of compounding for the price, all investors to repurchase shares. The company jointly and severally liable for redemption.
there are several questions in the above terms:
1, from the angel stage, a company to complete the listing within five years, which is almost impossible task. So this provision means that entrepreneurs must consider the risk of redemption exercise. Venture in the early stages of the risk is huge, if the entrepreneur to buy back, it will cause entrepreneurs face huge personal debt. If the investor uses the clause, it will ruin the future of a young man.
2, if entrepreneurs believe that the terms of acceptance, must be replaced by the company to buy back, rather than by the entrepreneur personal repurchase. But even if the company buy back, the exercise of the right of redemption should be based on the premise that the company does not lead to the loss of cash and the survival of the company.
3, to clear the right of redemption or exercise time, always like Damour Damocles hanging over his head.
so, we think that the terms of the redemption terms are more appropriate:
if the company failed to achieve the qualified listed on the delivery date after five years, investors in the investment since the date of completion of the fifth anniversary of the N after a