Formalizing participation can take a long time and involves an effective evaluation for the company. With the availability of the Seed Investment Program (“SEIS”) and the Enterprise Investment System (“EIS”), with tax breaks for start-ups, startups are raising more private capital than ever before, and pre-subscription contracts are becoming increasingly popular to raise money quickly and easily, without necessarily agreeing with investors on an valuation. As the name suggests, this is a special agreement used by investors and companies seeking financing. The agreement allows an investor to pay in advance for the company`s shares to be awarded at a later date. Often, this date coincides with the date of the next financing cycle (the next time the company wants investments), but it could also be at the point of sale of the company or at an agreed long-term date (more information on this below). A: It depends on the conditions of the ASA. In some cases, there may be a selection of the class of shares to subscribe, while other times they are defined. Whether there is a definite choice or class of shares, these will be the same conditions for which the principal investor subscribes to it. The investor may have no connection to the company in which he invests two years before the date of his investment or three years after the date of his investment.
In this context, the “link” is not defined, but it is assumed that anyone entitled to acquire more than 30% of the company`s share capital. What should a pre-food contract include? In particular, the long term, which does not exceed six months, could pose problems if, for example, the next major equity financing, which would trigger the allocation of shares under the ASA, were to continue in the future (for example. B 12 months). This is why a SEIS/EIS-compatible alternative to a convertible loan, commonly referred to as the Advanced Subscription Agreement (ASA), has been developed. We`ve built this up to include additional features, and we`ve incorporated it into our online signing process, our board, sharing certificates and more, and we`ve called it seedFAST.