What to keep in mind
Evaluate corporate authority, share classes, investment agreements and protections for shareholders who do not participate in later rounds.
Unjustified dilution or improper issuance procedures may lead to legal challenges.
Distinctions often confused
Issuing new equity is different from selling existing shareholders' shares: proceeds and corporate effects differ.
Frequently asked questions
Must an existing shareholder always accept new share issues?
The statutory process and subscription protections must be assessed.
Can the price of a future funding round be agreed now?
A method may be agreed, but legality and future valuation adjustments require careful analysis.
Informational content. It is not a substitute for professional advice.