Investment term sheet: preferred shares Term sheet for the investment for preferred shares in a private limited company. It outlines the principal investment terms on a non-legally binding basis and contains optional legally-binding provisions covering confidentiality, exclusivity and costs What are preferred shares? Preferred (or preference) shares grant holders specific preferred, or priority, rights over the holders of ordinary shares. Reflecting the investor’s risk, an investor may require preferred shares over ordinary shares. What are typical preferred share rights? Depending on the negotiated terms, preferred rights might include some or all of the following: dividend: priority entitlement to, typically based on an annual percentage of the invested amount. Preferred dividends can be cumulative, meaning that any unpaid amounts (due to the company not having sufficient distributable profits) accumulate and remain payable in subsequent periods liquidation preference: priority right to proceeds on the company’s sale or liquidation. The preference may be the amount invested for the preferred shares or a multiple of it conversion: right to convert preferred shares into ordinary shares based on a specified conversion rate anti-dilution: entitlement to either additional preferred shares or to adjust the conversion rate into ordinary shares, if new ordinary shares are issued below a specified price (usually the preferred share subscription price) director: right for the preferred shareholders to appoint a director consent matters: rights for the preferred shareholders to consent to specific matters Document features summary of investment terms, including pre-investment valuation and capital and number of new shares and price per share summary of investment process and principal investment documents range of preferred share rights exclusivity provisions Explanatory guidance As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use. Add To Cart

Investment term sheet: preferred shares

Name: Investment term sheet: preferred shares - Paper Rock Docs
SKU: INV002.001
Price: 50.00 GBP
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Term sheet for the investment for preferred shares in a private limited company. It outlines the principal investment terms on a non-legally binding basis and contains optional legally-binding provisions covering confidentiality, exclusivity and costs

Description

Investment term sheet: preferred shares

What are preferred shares?

Preferred (or preference) shares grant holders specific preferred, or priority, rights over the holders of ordinary shares. Reflecting the investor’s risk, an investor may require preferred shares over ordinary shares.

What are typical preferred share rights?

Depending on the negotiated terms, preferred rights might include some or all of the following:

dividend: priority entitlement to, typically based on an annual percentage of the invested amount. Preferred dividends can be cumulative, meaning that any unpaid amounts (due to the company not having sufficient distributable profits) accumulate and remain payable in subsequent periods
liquidation preference: priority right to proceeds on the company’s sale or liquidation. The preference may be the amount invested for the preferred shares or a multiple of it
conversion: right to convert preferred shares into ordinary shares based on a specified conversion rate
anti-dilution: entitlement to either additional preferred shares or to adjust the conversion rate into ordinary shares, if new ordinary shares are issued below a specified price (usually the preferred share subscription price)
director: right for the preferred shareholders to appoint a director
consent matters: rights for the preferred shareholders to consent to specific matters

Document features

summary of investment terms, including pre-investment valuation and capital and number of new shares and price per share
summary of investment process and principal investment documents
range of preferred share rights
exclusivity provisions

Explanatory guidance

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

Add To Cart

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