Looking for some investment (start up) advice

[Daringescape]

Hi,

I was wondering of anyone here knows and can give an example of the way a typical investment agreement works? Say I have some money I want to invest in a startup company. What are the typical terms of getting my money back?

Thanks

 

[Sun Baked]

A typical agreement that issues some stock in the company for the first tier financing.

Or a loan backed by preferred shares in the company that can be traded for a super majority in case of loan default, or a set percentage/shares of the company depending on future key points set now.

Can set the shares now in case of future loan for stock, and then use a dilution rider to allow the investor to buy shares for cheap to keep their percentage the same.

Typically, you want a loan that gives you shares now, is backed by preferred shares and a seat on the board, and pays you your money back in the future with a set multiple depending on how the company does or if it sells.

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All depends on where you are in line, and how much you are willing to contribute. If you give the first 250k, you can extract a painful amount for setting the company into motion.