As mentioned above, a stock subscription is just one type of stock offer document. If your investor has not applied for an equity subscription contract, it would not be in the company`s interest to offer it. Another alternative is a share offer/subscription letter in shares. This is a shorter document that still contains the main conditions and mechanics of the investment, but does not contain business or business creation guarantees. Instead, the investor must perform his own due diligence. A stock offer/subscription letter is often used in or Series A rounds when carried by family and friends or angel investors. This is less important in future cycles or among venture capitalists. If you leave a VC, you will probably insist on a share subscription contract containing detailed presentations and guarantees from the company and the founders. However, they may seek advice or consultation with a start-up lawyer to mitigate the potential negative effects of these provisions. Subscription agreements are based on SEC 506 (b) and 506 (c) Regulation D. Among the provisions of these rules are: in many cases, a subscription contract accompanies the memorandum. Some agreements set a certain return paid to the investor, for example. B a certain percentage of the business surplus or lump sum payments.
In addition, the agreement sets the payment dates for these returns. This structure gives priority to the investor, as he or she gets a return on the investment in front of the creators of companies or other minority owners. Once the parties have signed the contract, the investor and the company will have to follow the investment procedure described in the document, namely: what if you decide to invest in another way? Here are some pros and cons to invest, but not with subscription agreements. b. at least three arbitrators are appointed, at least one arbitrator must be appointed by each party, the president appointed by the other designated arbitrators and who disagrees with the [President of the International Chamber of Commerce]; A subscription contract is a kind of sharing offer document. Whether you are a private investor or a company investing in another, a subscription contract describes the details of the transaction, including the price and agreed amount of the shares.