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TOPIC: Investor Concerns

Investor Concerns 4 years 5 months ago #15616

Hello!

I am in talks with a startup company seeking investment fund in exchange for equity. The amount involved is 500K pesos in exchange for 4% share ownership. The company's valuation is 15M pesos. I am Filipino based overseas, but the business I am investing in is based in the Philippines. They are targeting a soft launch Q4 of 2015 and are seeking investment funds by July 2015 so as to get started with registration with SEC as a corporation.

As an investor, what legal documents should I take note of? What documents should I request (or should the company provide me) when I write them the check for the investment amount that I committed? What rights as a minority share holder should I have?

Thanks for your responses.
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Investor Concerns 4 years 3 months ago #15876

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Well, the fact that they are not incorporated yet raises a red flag. You cannot actually ask for any documents yet because the corporation technically does not exist yet. You cannot be issued shares yet one you paid in because there is no corporation to speak of yet.

If want to invest pre-incorporation, there is a bigger risk. You must trust the people behind it and well, you cannot fully secure your money because it will be the corporations asset and if the corporation looses, you suffer.

The rights of a minority stockholder is the same as any stockholder.
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