[Consultation] Drafting Standard Investment Contract for a Technology Holding Company

Venture capitals (VCs) are often misunderstood as corporate raiders who seek to maximize investment profits, and are viewed as speculative capital with no interest in the long-term development of startups or the creation of a healthy venture ecosystem. However, in reality, most VCs do not think of investing in startups as solely a means of realizing profits, and believe that investing in startups can drive economic development, ignite the challenge-seeking spirit of young people, and is one of the ways to contribute to society.

Furthermore, startup investment companies established by schools or public institutions may be required to fulfill a stronger role in social contribution and the building of the entrepreneurial ecosystem. Technology holding company A recently needed to revise standard contracts after being selected as a TIPS operating company. In particular, company A intended to consider not only the role of a venture investor who invests in startups and recovers profits, but also the socially contributing aspect of discovering promising startups and helping them grow.

Accordingly, Law firm Veat, at the request of company A, proposed a standard draft for investment in common stock, preferred stock (RCPS), convertible bonds (CB), and bonds with warrants (BW), guaranteeing an appropriate level of investment profit while containing more favorable terms for new venture companies, and in the process, drafted a standard contract that could reflect the positions of both investors and startups.

Thank you.

Law firm Veat Dream