Negotiating an investment agreement is one of the key stages of an M&A or equity investment transaction. It covers the transaction structure, the rights and obligations of the parties, price calculation mechanisms, and the principles of managing the company.
An investment agreement defines the rules for an investor’s entry into a company – including the value of the investment, minority protection rights, price mechanisms (such as earn-out), corporate governance principles, and exit conditions.
The role of a legal advisor is to design solutions that protect the client’s interests while ensuring that both parties reach commercially acceptable compromises.
In practice, the negotiation process usually consists of several key stages:
- Preparation – analyzing business assumptions and transaction structure.
- Term sheet stage – defining the key terms of cooperation.
- Negotiation of key provisions – related to control, investor rights, pricing mechanisms, and exit conditions.
- Finalization and signing of the investment agreement.
Properly conducted negotiations help minimize risks, accelerate transaction closing, and create a solid foundation for a successful long-term partnership between the investor and the founders.
The MFW Fiałek team advises on M&A and private equity transactions, supporting both investors and founders in structuring and negotiating investment agreements. Contact our M&A team.