On Saturday, 6th August 2022, CAIN Program Cohort 02 held a workshop on “Angel Investment Legal and Documents”at BasisPoint Cambodia, led by Mr. San Sokprapey, Head of Compliance, CiC Plc.
Objectives:
- To share some legal aspects needed to know before, during and after investing
- To share the purposes and contents of investment-related documents (such as term sheet, shareholder agreement….)
Key Takeaways:
- Challenges of Investment Agreements:
- All aspects are important so due diligence can be sophisticated, costly & time consuming.
- Different variances in investment structure
- Term and conditions, general templates largely vary from case to cases
- Factors influencing Investment Agreements
- Aim of the investment
- Stakeholders of the investee
- Key focus in the investee
- Key elements of the deal structure
- Process of making Investment Agreements
- Interaction: NDA Signing: Share confidential data and produce key element of the offer
- General Due Diligence: Examine the info and produce key elements of the offer
- Term Sheet: Key elements of the deal and open the way for in-dept due diligence
- In-dept Due Diligence: Commercial DD, Financial DD, & Legal DD
- Deal Closing: Signing Agreements, SPA/Subscription, SHA, Agreement of Loss (Aol), etc.
- General Notions of Non-Disclosure Agreement
- Kind of Gentlemen Agreement
- Protect disclosed info of each other
- Executed at the very beginning
- General Notions of Term Sheet
- Non-binding offer
- Open way for in-dept DD
- Lay down key elements: number & class of shares purchase, price, valuation method, board seat, condition precedent/subsequent, exit
- General Notions of Definitive Agreements
- Examples: Share SPA / Share Subscription, Shareholder Agreement / Accession Agreement