Are you interested in becoming an angel investor? It’s not just about money. Investors sometimes also need to need expert advice to prevent mistakes and sometimes need to have a network of industry contacts who will help negotiate key “strategic partner” alliances. Therefore, the money you invest is not really important either. You will need to review the company’s organizational documents to see what rights you will and will not have as an investor.
Voting vs. Share
Voting Generally, angel investors own shares without voting rights in a company, unless they buy a large part of the company. Shareholders who do not have voting rights have few rights. However, shareholders who have voting rights may not have the right to impose obligations on shareholders who do not have voting rights, without their consent.
Ensure that the company’s organizational documents give owners who do not have veto power “veto power” over decisions that affect them.
When new investors put money into the company, your percentage ownership in the company will shrink. Maybe you don’t mind the dilution. But you need to consider two ways to protect against unfair disbursement of investments. The first example is the anti-dilution provision. In …