Part of the agreement with the investors will be that if any liabilities pop up that were incurred prior to the date of investment, those liabilities would be the express responsibility of the ‘old’ or previous shareholders. These are called previous liabilities. New investors will not take responsibility for previous liabilities.
Valuing Your Business
Each investor will have their own method of valuing your business and their own requirements that will determine if your business is worth investing in. You can value the business yourself, and need to be able to substantiate your process, but they will also run their own models and do their own calculations.
Joint Terms and Milestones
At the beginning of the journey with investors, you will sit down together and decide on the way forward and the milestones required to get there. It is very much a partnership where you are co-creating your business. You get outside help to think strategically and to think big, but the process is not taken out of your hands.