The Decision
II the investor decides to invest, he or she will have an investment agreement drafted by an attorney. This agreement may be somewhat simpler than those vised bv professional investors, such as venture capital firms. All the cautions and advice about investors and investment agreements that are discussed later in the chapter apply here as well.
Most likely, the investment agreement with an in¬formal investor will include some form of a "put," whereby the investor has tluj right to require the ven¬ture to repurchase his or her stock after a specified number of years at a specified price. If the venture is not harvested, this put will provide an investor with a cash return.
For access to important documents for venture agreements, please see the Web site for this text¬book, http://www.mhhe.com/business/management/ timmons, for downloadable sample term sheets.