Negotiating an investment agreement involves several steps:
Preparation: Both parties should clearly understand their goals and the terms they seek to negotiate. Initial Meeting: Discuss the broad terms and establish mutual interests. Term Sheet: Create a non-binding term sheet that outlines the main terms of the agreement. Due Diligence: The investor conducts a thorough check on the company’s financial health, business model, and market potential. Final Agreement: Draft the detailed investment agreement, incorporating all negotiated terms, and have legal teams review it. Signing: Both parties sign the agreement, making it legally binding.