How Investors Structure Investments
(Slide 37  of 50)

• A number of factors unique to private company investing influence the deal structures venture capitalists use.
• The investor’s inability to remove management (when investor does not purchase control) makes due diligence more important and results in demands for contractual rights to approve decisions that could adversely effect investors share value.
• Absence of investor control has also led to the development of investment agreements that tie management to the company and restrict management and founder freedom to dispose of their shareholdings.

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