TELESEMINAR: Understanding “Angel” Investing in New Businesses – A National Perspective
December 18, 2012
12:00 – 1:00 p.m.
1.00 MCLE hours
The start-up capital for most businesses is provided not only by their founders but also by “angel investors” – either “friends and family” of the founders or professional investors who put capital, or other resources, into the company at its earliest stages. The capital provided by these angel investors is essential to starting and growing the business. But as the company grows, their angel investment is often replaced by borrowing from banks, larger equity investments from institutional investors or investment funds, or simply by internally generated cash flow. The challenge is protecting the interests of early investors as the company grows and those interests are displaced by those of others. This program will provide you with a practical guide to structuring angel investments depending on the type of investors involved, drafting the essential documents for the deal, anticipating changes to the structure of the company, and common traps of friends and family investments.
- Structuring and drafting “angel” investments in businesses
- Differing structures “friends and family” and professional investors
- Common problems in “friends and family” investments
- Essential terms in angel investment documents – preferred returns, non-dilution, control, non-competition
- Choice of entity considerations given nature of business, type angel investors, and future plans of the company
- Anticipating future investments and how that impacts early angel investors
James C. T. Linfield, Cooley, LLP, Colorado