SBP 052: Tricky Clauses To Watch Out For In Contracts With Investors

The Activator HQ Podcast (formerly The Smallstarter Business Podcast)

It's a wonderful feeling.
After working so hard on your business, you have finally raised money from an investor.
It feels so good to have big money in the bank.
Now, you can stop worrying about paying rent and salaries, and focus on growing the business.
But there is a problem.
There's a contract you signed with the investor.
It was a 16-page contract.
And it contained several clauses and terms you really didn't understand.
But you were too excited to bother because you have been struggling to raise money for a long time.
As a result, you signed the document and shook hands with the investor to seal the deal.
After almost of decade of working on deals that involve both entrepreneurs and investors, I've always noticed something very interesting:
Entrepreneurs always focus on the money.
But investors always focus on the contract.
As a result, some entrepreneurs take money without knowing how much power and control they have lost in their company.
Last year, after raising millions of $$$, two (popular) entrepreneurs in Nigeria got fired from their companies.
Yes, they were fired by their investors.
And that's why you need to listen to today's episode of the podcast.
You're about to learn some interesting things about the tricky parts of investor contracts every entrepreneur needs to understand.