Investor Consent is the approval required from previous investors, as specified in earlier Shareholders Agreements, before issuing new shares. This consent is formalized through an Investor Consent Notice to ensure compliance with prior agreements.
Why is Investor Consent necessary?
Investor Consent ensures that previous investors have a say in decisions that could affect their ownership stake, such as the issuance of new shares, helping to maintain investor trust and alignment.
How is Investor Consent obtained?
Companies issue an Investor Consent Notice, outlining the proposed share issuance or changes, which investors must approve to proceed.
Are there specific actions that require Investor Consent?
Yes, actions like issuing new shares, making major business decisions, or altering the company's capital structure often require Investor Consent, as specified in the Shareholders Agreement.
Can Investor Consent be withheld?
Yes, investors can withhold consent if they believe the proposed actions are not in their best interests, potentially halting the planned changes.
Is Investor Consent required in all companies?
No, Investor Consent requirements depend on the terms set in the Shareholders Agreement and are more common in companies with multiple funding rounds.
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