Competitive aspects of a probe storage technology

Documentation The documentation required to implement an investment will normally comprise: a subscription and shareholders agreement; articles of association (the by-laws or rules setting out how the company is operated); share option schemes (allocating a pool of shares to reward employees and management team mem­ bers); assignments and licences of intellectual property (if not already entered into); intellectual property pipeline agreements (which allow the company to take an assignment or licence of intellectual property created by the founders in the future whilst continuing to work in the university laboratory); and founders’ employment or consultancy agreements. The main document is the subscription and shareholders agreement. This sets out the terms upon which the investor will obtain shares in the company including the amount that will be paid for the shares and how many shares, and when and how the money will be paid to the company. It also includes the terms on which existing shareholders of the company (usually the investor, and the founders) will hold the shares and the way in which the company will be managed including the decision­ making processes. In the case of STS the investors required a slightly more complicated document known as a convertible loan. The investment was lent to the company and the investors have rights to subscribe for shares in the company at any time or to require repayment of their loan.