Nazar Polyvka Addressed the Participants of UAngel Master Class “Incorporation and Jurisdiction Alternatives for Start-ups: Pros, Cons and Hidden Hazards”
Terms sheets, hadron collider, convertible notes, shareholders agreements and Schrödinger’s cat on the early stages of technological start-ups investment.
Every now and then, participants of Ukraine’s angel and venture investments market tend to misinterpret the main concepts of investment instruments and fail to clearly understand how these instruments work and should be applied in practice. Some of them have no idea what is the difference between venture investments and loans and as a rule mix apples and oranges when it comes to commercial arbitration issues.
Actually, the matter is even more complicated due to the fact that none of Ukrainian investors got their fingers burnt in disputes concerning investment instruments.
Term sheets, convertible notes, shareholders agreements are the efficient instruments of investment agreements formation, provided that they are properly used. First and foremost, they should be used to clear out in writing the parties’ contractual arrangements at all stages of investment process. For what it’s worth, one should not underestimate their legal effect. The US case law proves that such investment instruments, given that they are properly executed, may be enforced by court decisions. The question at issue is whether the ends justify the means.
Nazar Polyvka, Axon Partners, referred to all the above issues during the master class “Incorporation and Jurisdiction Alternatives for start-ups: Pros, Cons and Hidden Hazards” hosted by Digital Future on June 9 as part of UAngel educational initiative.
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