Early Stage Funding.
All you need to know, in one place.
How are private investments structured?
There are several common ways in which an angel investor or VCs may invest in your company:
The most straightforward and favourable to the startup. The startup and the investor will agree to a fixed cash investment, and the number of shares that the investor will receive in return. As a holder of ordinary shares, the investor will be entitled to dividends and to vote on company matters.
More preferable to the investor, and more commonly seen in later “series” financing rounds, these are equity shares with special additional rights. For example, unlike holders of ordinary shares, investors who get preferred shares may be entitled to a fixed dividend regardless of profit levels. Most importantly, in the event of a liquidation of the company, investors holding these shares receive their investment back before the holders of ordinary shares (who are often likely to receive nothing).
A convertible note is short-term loan that converts into equity. Investors loan money to a startup, and rather than receiving their money back with interest, the investors receive shares in the startup’s next round of funding, normally at a discount to the price paid by other investors in that round (typically around 15-20% less), based on the terms of the deal. In short, they are debt instruments backed by the equity of the company.
Simple Agreement for Future Equity (SAFE)
A private investor can invest in your company using a SAFE Agreement. It is a relatively new concept, and very similar to a convertible note, intended to replace convertible notes in some situations. Essentially, it is an agreement whereby the investor provides capital to the startup, and in return the startup provides a warrant to issue shares to the investor at a later time and upon a specific event, such as at the next round of funding.
Excerpt from Early Stage Funding, an eBook published by Dragon Law.
FOR IMMEDIATE RELEASE
DRAGON LAW OPENS SINGAPORE OFFICE
“Uber of law” Hong Kong startup boasts 2,000 users and regional expansion plans
HONG KONG, Dec. 1, 2015 — Trusted and used daily by 2,000 businesses in Hong Kong, Dragon Law promises to have the same disruptive effect on the Singapore legal market when it launches officially in December 2015, one year after its debut in Hong Kong.
Daniel Walker, founder and CEO of Dragon Law: “We have worked very hard during the last year to ensure our Singapore clients a fantastic user experience, both on our platform and from our partners. The key for us has been developing strategic alliances with Singapore’s business community and building trust among our new customers. Our experienced team of leading law firm professionals and developers has helped us to quickly become the go-to provider of legal services for SMEs in Hong Kong and now, with the Singapore office, we have cemented our position as Asia’s leading online legal services platform.”
Breaking the traditional law firm mould of one-on-one consultations, Dragon Law’s innovative technology platform provides businesses with the tools they need to make sense of their legal environment. Central to the offering is its software that guides clients through all the legal processes that businesses commonly face, from signing contracts and filing trade marks to ensuring delicate HR matters are completed by the book. When clients do need some face time, law firms support Dragon Law’s clients, either for legal opinions on a document they created with the system or, when the need arises, for high-value-added legal advice. Forbes says Dragon Law “offers a cheaper and quicker alternative to hiring a traditional law firm,” while “the cool thing about Dragon Law,” says Tech in Asia, “is that it’s solving an old-school problem in a new-school way.”
About Dragon Law
Dragon Law is Asia’s leading online legal services platform. Dragon Law helps businesses of all sizes build business contracts, incorporate a business, protect intellectual property, get legal advice, set up a company address, get a company secretary and get visas. By leveraging technology and working hand in hand with the most reputable local and international law firms, Dragon Law provides an end-to-end solution to clients’ legal needs that is safer, 10 times faster and five to 10 times cheaper.
The full-scale legal solution provides everything a newly formed or well-established business could need:
More information about its cost-effective legal solutions, legal tips newsletter and free legal documents is available at www.dragonlaw.com.hk, follow @DragonLawAsia on Twitter or connect on Facebook.