A financing document is a formal legal instrument used to record, approve, or govern a company’s capital-raising transaction. Priced rounds and convertible-note rounds require a legally thorough set of documents, not just a signed investment agreement. section 6.3
A financing package can include:
- Stock purchase agreement: sets how stock is authorized, sold, and issued, alongside closing terms, representations, warranties, and closing conditions. section 6.3
- Disclosure schedule: lists company information investors need disclosed, such as prior investments and founders’ stock ownership. section 6.3
- Investors’ rights agreement: records ownership, transfer, refusal, co-sale, drag-along, voting, and company covenant provisions. section 6.3
- Board consent and stockholder consent: capture required approvals from the board and existing stockholders. section 6.3
- Stock incentive plan amendments, bylaw amendments, restricted stock agreement amendments, and indemnification agreements may also be required. section 6.3
A practical founder check
Before closing a financing, a company must account for investor disclosures, formal approvals, stock issuance terms, and changes to the employee option pool caused by the new shares. section 6.3
