FAQ
How should we handle disputes over unanticipated expenses in an investment contract?
Include a dedicated clause outlining procedures for cost overruns, such as requiring investor approval for expenditures exceeding a set threshold or establishing a reserve fund. Consult a legal professional to ensure the language aligns with your jurisdiction’s commercial practices and doesn’t unintentionally waive liability.
Can we use these templates if we’re investing in a foreign company?
These are foundational frameworks, but international investments require additional terms like governing law, currency risk allocation, and foreign exchange controls. Work with a lawyer familiar with both your jurisdiction and the target country’s regulations to adapt clauses—never assume generic templates cover cross-border complexities.
What’s the best way to document investor expectations for liquidity events?
Specify exit conditions clearly, including priority rights (e.g., first refusal), drag-along provisions for acquisitions, and tag-along protections for investors. Define liquidation preferences (e.g., 2x equity return before other stakeholders) and include a schedule of events to manage disputes over valuation timing during buyouts or IPOs.
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