Introduction to Investment Documents

Updated: Jun 4

As a lawyer by training (but not by heart), I often end up working with the investment documents. As it sometimes causes confusion what documents are needed for an investment, I wrote a blog series on investment documents.


In this first article, we take a look into the different investment documents, their purpose and their relationship with each other.


Key Investment Documents

Typical investment documents are as follows:

  • Term sheet

  • Shareholders' agreement

  • Investment agreement

  • Syndication agreement

The list is by no means exhaustive. Also, not all of these are always used and the contest of some of the agreements can be included in the other agreements.


For the purpose of this article series I will present the following documents:

  • Term sheet as an agreement on the terms of the contemplated transactions prior to the investment;

  • Shareholder's agreement as a document guiding the governance and resolutions of the company after the investment;

  • Investment agreement as a document governing the closing of the investment; and

  • Syndication agreement as a document in which the parties of the syndicate agree on how to manage the investment and represent themselves towards the company.

Other Documents

The investment documentation often includes other documents, such as a share subscription list and an adherence agreement. As these documents are more technical in nature (e.g. the subscription list is a company law document and the adherence agreements is just a mean to adhere to the shareholders' agreement), I will not deal with these in these articles.


Other Instruments

This article series is written with an equity share investment in mind. While most of the contents apply also to the investments in convertibles or SAFEs, the details of these instruments are not included in the articles.


Even when using these instruments my personal preference is to treat the holders of these instruments in a similar manner as the shareholders to the extent feasible. Thus, it would make sense to enter them into parties in the above-mentioned documentation as well. (While it is called "shareholders' agreement", it is totally possible in most jurisdictions to enter non-shareholders as parties in the agreement as well.)


In the next four articles we will dive into the details of the following investment docume

As a footnote: Even though I wrote my articles in English, this article, in particular, is written from a Finnish point of view. As the legal requirements vary from jurisdiction to jurisdiction, it is important to review legal requirements specific for your own jurisdiction. However, I do believe that despite the differences in jurisdictions, these articles form a useful guideline for the purposes of each agreement in the investment process.


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