Investor Agreements: Essential Strategies for Attorneys in Structuring and Drafting Effective Investment Agreements

James C. Chapman | Rimon, P.C.

Mr. Chapman focuses his practice on venture capital, mergers and acquisitions, and international business transactions, with an emphasis on China. He represents companies and venture capital firms in connection with investments, mergers and acquisitions and other legal matters. With over 35 years of experience in Silicon Valley, Mr. Chapman has represented clients in over 400 venture financings, mergers, acquisitions, and cross-border transactions. He has published over 50 articles and speaks frequently on the topics of venture capital financings, mergers and acquisitions and doing business in China. He received and his J.D and MBA from Santa Clara University and a B.A in International Relations, a B. A. in Spanish from Catholic university of America.

Jessie Zhou | Rimon, P.C.

Jessie Zhou is a corporate attorney with extensive experience in venture capital, mergers and acquisitions, and international business transactions. She provides strategic legal counsel to technology companies and other clients on a broad range of matters, including equity financing, debt financing, corporate governance, commercial contracts, and exit strategies. Additionally, Jessie negotiates complex investment terms and advises on structuring deals that support business growth and risk management. She has represented clients across diverse sectors, including technology, energy, manufacturing, aquaculture, apparel, water purification, pharmaceuticals, and homeowner management.

I. Foundations of investment agreements | 2:00pm – 3:00pm

• Investment agreements
  • Definition and purpose of investment agreements
  • Legal framework: Securities Act of 1933 and its relevance
  • Importance of investment agreements in business funding and risk management
• Types of investor agreements
  • Common investment agreement types
    1. Agreements upon formation – Restricted stock purchase agreements
    2. Early-stage investment agreements
       • Simple Agreements for Future Equity (SAFE’s)
       • Convertible promissory notes
    3. Venture capital investment
       • Term sheets
       • Preferred stock purchase agreements
       • Voting agreement
       • Investor rights agreements
       • Right of first refusal and co-sale agreements
    4. Stock option agreements
    5. Warrant agreements
  • Comparison of agreement types to determine appropriate use cases for businesses

Break | 3:00pm – 3:10pm

II. Key components and drafting best practices | 3:10pm – 4:10pm

• Distinguishing investment agreements from shareholders’ agreements
  • Key differences in purpose, scope, and application
  • Overlapping provisions and avoiding redundancy
• Essential terms and provisions in investment agreements
  • Investment terms
  • Legal protections
  • Representations and warranties of the company and purchaser
  • Governance provisions
  • Exit strategies
  • Conditions for closing
  • Miscellaneous – dispute resolution, venue, attorneys’ fees
• Drafting strategies and common pitfalls
  • Best practices for ensuring enforceability and compliance
  • Risks of DIY drafting and the importance of professional legal guidance
  • Standardization