What to keep in mind
Structure subscriptions, funding, governing bodies, distributions, minority protections and defaults on promised contributions.
Absent valuation or liquidity rules, an otherwise profitable investment can become an intractable dispute.
Distinctions often confused
A larger capital contribution does not automatically confer every management power where lawful rules provide otherwise.
Frequently asked questions
Can different investors have different rights?
Yes, within lawful share classes and contractual arrangements.
How can an investor's exit be anticipated?
Through properly designed transfer restrictions, pre-emption rights, options and valuation processes.
Informational content. It is not a substitute for professional advice.