2) “charter” or “founding certificate”: when a new class of shares is created or the number of shares authorized increases, the company`s founding certificate must be amended to provide for such a change. The Charter is a publicly presented document that defines, among other things, the rights, preferences and privileges associated with the preferred action. For example, a charter may include anti-dilution provisions (protection of investors against future issuance of shares at a lower price per share than they purchased) and preferred shareholders often expect “guarantees” to be introduced. Guarantees require a majority vote of preferred shareholders to allow the company to freely implement certain measures, such as approving/issuing additional shares or amending the Charter or statutes. Together, these provisions allow preferred shareholders to effectively secure their position and ensure that their investments will not be diluted without their consent. The SPA is the contract by which investors buy preferred shares and sell a start-up. The G.S.O. contains the necessary basic information on the purchasers, the number of shares sold, the price per share and the closing date. In addition, the G.S.O. contains a large number of representations and guarantees from the company and investors, as well as certain conditions that must be met before the financing closes. These following resources are other standard forms of documents that are now popular. F.
Connelly Thieman is a partner in the Pittsburgh office of Reed Smith LLP, a dynamic international law firm dedicated to helping clients grow their businesses. Conn helps start-up companies and investors relaunch equity financing cycles and often supports start-ups in general business advisory issues, including education and marketing issues. Conn will be contacted email@example.com. The update of the NVCA agreements contains additional languages to be included in the APA so that venture capital funds can assess CFIUS considerations.