Raising investment is an exciting time for your business. But let’s be real - the paperwork can be overwhelming. Between raising capital and negotiating terms, you may suddenly find yourself lost in the world of investment documents. The big question is, which are right for your business?
With so many different documents available to use within the investment process, it is important to know which are relevant to you. At Vestd, we can help you cut out the noise, and walk you through the essentials needed to help your business grow.
A startup raising its first small round from friends and family.
1. Term sheet
Founders send a non-binding term sheet outlining key terms such as number of shares, and the type of agreement to be used
2. Share subscription letters and agreement
The investors commit to purchasing shares in the company in exchange for their investment through this simplified document.
3. Short Form Shareholders’ Agreement
A simple agreement that governs shareholder rights, obligations, and governance.
4. Deed of Adherence
New investors sign a deed of adherence if there's an existing shareholders' agreement, binding them to its terms.
A scaling company raising funds with a lead VC and multiple other investors.
1. Term Sheet
The VC proposes a detailed term sheet outlining the investment amount, valuation, investor rights, among other details.
2. Investment Agreement
A hybrid document that combines a Shareholders’ agreement with the Subscription details. This detailed agreement specifying share issuance, along with more complex rights and obligations needed for this complex round.
3. Deed of Adherence
If any new investors are joining existing shareholders who already have a shareholders’ agreement in place, they would sign a deed of adherence to agree to those terms.
A company is raising a formal funding round in six months but needs a quick cash injection ahead of this.
1. Term Sheet
Founders send a non-binding term sheet outlining key terms such as amount advanced, discount rate, and future equity conversion.
2. Advance Subscription Agreement (ASA)*
Immediate capital provided, with shares to be issued in the future round.
3. Short Form Shareholders’ Agreement
A less complex document that governs investor-shareholder relationships until the larger round closes.
4. Deed of Adherence
New investors sign a deed of adherence if there's an existing shareholders' agreement, binding them to its terms.
*Convertible Loan Note (CLN) (Optional): If the investor wants more flexibility, they might structure the investment as a CLN instead of an ASA, giving them the option to either convert the loan into shares during the next round or be repaid.
We’ve helped hundreds of startups manage their equity, raise funds, and keep their documents in order. And to make things even smoother, we’ve developed our InVestd flow - a fully integrated step-by-step workflow to help you raise funds with ease. Featuring digitised signing, pitch deck templates, and data rooms for investors, securing investment has never been easier.
Whether you’re securing your first investor or managing multiple rounds of funding, our Investd flow takes the guesswork out of the equation, ensuring you always have the right documents at the right time.
Book a call now to speak to a team member about adding the raise package onto your plan, so you can secure investment, hassle-free.
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