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Write the Opening Recitals of the Investment Contract.Make Your "Whereas" Statements.List the Articles of the Agreement.Note the Payment Terms in the Investment Contract.Identify Any Deliverables.State the Term and Termination of the Contract.Show the Company Contacts for the Investor and Company.More items...?
An equity investment agreement occurs when investors agree to give money to a company in exchange for the possibility of a future return on their investment. Equity is one of the most attractive types of capital for entrepreneurs, thanks to wealthy investor partners and no repayment schedule.
The basic formula is simple: If you need to raise $5 million, and an investor believes the company is worth $15 million, you will have to give them 33 percent of the company for his money.
Equity investment is buying shares directly from companies or other individual investors with the expectation of earning dividends or reselling the same when it is profitable. Examples of equity investment include equity mutual funds, shares, private equity investments, retained earnings, and preferred shares.
Ans: Equity investments are divided into different categories. There are direct investments such as investments into stocks/shares, investments in equity mutual funds, arbitrage schemes and private equity investments such as real estate funds.