What is an Investor Side Letter?

Saturday, 11 October 2014 by

Often, when conducting a private offering raise, there comes a time when a key group of investors demand terms that are more favorable to them, relative to the other investors. Common sense dictates that there should be some mechanism to accommodate those investors, provided their demands don’t unfairly prejudice the other investors. But how to

No one disputes that raising capital isn’t paint by numbers easy. In short, it’s hard…sometimes very hard. From startups to companies seeking growth capital, the principals’ network often does not provide access to venture capital or angels. Even with the right names, getting real introductions to the people who can invest seems impossible at times.

With most crowdfunding, funders can “donate” monies to a startup or going business concern that is raising capital. Critically, however, they won’t get a stake in that company in exchange. As a result, those funders are “technically” not “investors” and technically not governed by federal and state securities laws. The JOBS ACT’s goal (among others)

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