Venture Capital
Documentation of investment rounds and funding instruments in innovative companies.
A venture capital round must establish how the contribution relates to equity interest, risk and control. Direct investments, convertible loans and other instruments have different effects before and after conversion. The legal framework for startups (Complementary Law 182) governs investment scenarios that do not immediately become part of the share capital, but its application depends on the legal requirements and the characteristics of the business. The commercial name given to the instrument does not substitute for this assessment.
Advisory work involves term sheets, diligence proportional to the transaction and negotiation of definitive documents. Valuation, conversion discount, dilution, vesting and information rights must be organized coherently, including in light of future rounds. Ownership of software and other essential assets deserves specific examination. The corporate design must also address scenarios involving founder exits, default and the winding up of the company, preventing economic terms agreed initially from remaining without a contractual mechanism for implementation.
Our work
- Term sheets and investment round documents
- Convertible loans and conversion rules
- Vesting, dilution and investor rights
Does signing a convertible instrument immediately make the investor a shareholder?
Not necessarily. This depends on the instrument, the applicable legal hypothesis and the occurrence of the conversion events. The rights prior to conversion must be clearly defined.
Editorial review: