Venture capitalist investors provide financing in return for a proportion of your shares. You may be able to obtain venture capital investment from a business angel or venture capitalist firm. The main types of investment made by venture capitalist (VC) firms and business angels are:
Ordinary shares give the venture capital investor ownership of an agreed proportion of the company, and each of the investor’s ordinary shares will carry the same rights as each of your ordinary shares. The return is made up of a combination of dividends (if any) paid out, and the increase in the capital value of the shares.
Ordinary shares are cheap for your company to finance in the short term, and the company only has to pay out dividends if the company has profits available to fund them.
Click below to read more about the main types of investment.
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