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. Many of the changes to the NVCA agreements are incorporated into different agreements. First of all, we draw attention to these points: the definition sheet is the starting point for any venture capital financing, as the terms agreed here serve as a guide for the conditions to be included in the final agreements to be applied in the framework of the conclusion. The NVCA model sheet has been updated to reflect key changes to the NVCA`s terms and conditions. The Charter is a publicly presented document that approves the different capital classes of a capital corporation and describes the rights, preferences and privileges of those classes. It must be submitted to the Secretary of State of Delaware (or any other founding country) before a venture capital transaction is closed. Remarkable updates have been made on sections of the NVCA Model Charter (as described above) and on dividends. 4.
Voting agreement: this agreement generally provides for: (i) the composition of the company`s board of directors after the funding cycle, including the electoral/distance process; and (ii) drag-along rights. The “Drag-Along Rights” provide that, for certain authorized authorizations, all voting parties vote in favour of the sale of the company, accept the terms of sale and refrain from exercising any “derogatory rights”. The IRA contains the most important rights to investors in venture capital. In summary: registration rights, information rights, inspection rights and, if applicable, observer rights and participation rights. In addition, the IRA enters into agreements that constitute restrictions on the company`s behaviour and obligations after the conclusion. 5) initial right of refusal and co-purchase contract: as the name suggests, this instrument generally consists of two primary rights: (i) the “right to first refusal”, which provides that shareholders (or part of them) must first offer to sell their shares to the company and/or to preferred shareholders before equity is offered to a third party; and (ii) the right to co-sale, which is the right to participate in proportion to the negotiated terms of the sale of shares of another shareholder.