The initial investment agreement can significantly affect future control of a company. It outlines the terms and conditions of the investment, including the amount of equity or shares the investor will receive in return for their capital. If the founders give away a significant portion of their equity, they may lose control over the company. This is because shareholders have voting rights, and those with a majority of shares can influence the company's direction. However, some agreements include protective provisions that allow founders to retain control, even if they own less than 50% of the shares.
Ever wondered why some companies stay under the control of their founders, while others shift into t...
Download model