Can an investment agreement take place online?


1

Can an investment agreement take place online without entrepreneurs meeting with the investors? If yes, then what is the best procedure. Most of the time Investors want to invest in a startup but cannot visit that country at that time due to multiple reasons, such as, busy schedule, no visa, and other reasons.

Suppose a situation where an entrepreneur needs cash to grow and implement new features fast, the investor is willing to invest and transfer money to an entrepreneur's account but they have no agreement in place. Can they sign an agreement online (so the money can be wired) and meet later (after a few months) in person to make the agreement permanent?

Investment Investors Entrepreneur

asked May 12 '11 at 03:56
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Gin
8 points

2 Answers


1

You could use a service like AngelList to make your round easier. When an investor commits on AngelList, it acts as social proof to herd the rest of the investors in the right direction. They are basically saying to the world, "Yes, I am going to give this startup money."

I am not a legal expert, but once you reached your investment goal, you would do as Kekito said and send PDFs to your investors, and get them to send back their contract. Under the UETA act, a digital signature is the same as an in person signature, so no need to meet.

If you are raising a round with a minimum, you could get the contracts and money as people committed, and put the money in an escrow account.

Most early stage investors are more interested in the people rather than the business though, so the chances of them wanted to commit without even knowing you are small.

answered May 12 '11 at 06:58
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Andy Cook
2,309 points

0

Technically, yes. But who is going to give you their money to gamble with, without meeting you?

answered May 13 '11 at 01:19
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Marcin
526 points

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