What to keep in mind
Define reserved matters, information rights, board seats, veto thresholds, confidentiality and transfer arrangements.
Excessive veto rights can produce governance deadlock.
Distinctions often confused
Investor protection is different from transferring day-to-day management to investors.
Frequently asked questions
Can an investor require board representation?
Potentially, through a lawful shareholding and governance structure.
Should every expenditure require investor consent?
Usually not; materiality and decision-making efficiency should guide the arrangement.
Informational content. It is not a substitute for professional advice.