A financial investment can often be one of the most important contributions to the success of a business. Regardless of who the investor is or how they became interested in your company, it is important to have the proper legal agreements and documents in place to protect you from liability and to ensure that the investor receives all of the necessary safeguards as well.
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Private Placement Memorandum (PPM) – A private placement memorandum is often the first step towards obtaining investment funding. This document will explain your business and goals to the investor and will explain what the investment will be used for.
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Non-Disclosure/Confidentiality Agreement – During the process of providing potential investors with information about your business, you need to be concerned with preventing your ideas and plans from being divulged to third parties.
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Investment/Subscription Agreement – Once an investor has agreed to come aboard and provide you with financial backing, an investment or subscription agreement will become the governing contract between your company and the investor.
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Securities – It is essential that the investment relationship run in accordance with state and federal security laws. Whether the investment will be exempt under the laws or will require registration with the Securities and Exchange Commission (SEC) will depend greatly upon your circumstances.