Table of Contents

What is a Capital Introduction Agreement?

A “Capital Introduction Agreement” is a legal document that establishes the terms and conditions for the introduction of capital or investment opportunities by a capital introducer (often a financial intermediary) to potential investors or capital recipients. It outlines the agreement between the capital introducer and the parties interested in raising capital or seeking investment.

What is the purpose of a Capital Introduction Agreement?

The purpose of a Capital Introduction Agreement is to define the relationship and responsibilities between the capital introducer and the parties involved in the capital introduction process. It sets forth the terms under which the introducer will provide services to connect capital providers with capital seekers, ensuring clarity on expectations, compensation, and confidentiality.

When should you use a Capital Introduction Agreement?

This document is typically used when a party, such as a company, fund manager, or entrepreneur, seeks to raise capital or secure investments from potential investors. They engage the services of a capital introducer to facilitate the introduction and connection with suitable investors. The capital introducer acts as an intermediary, helping to identify and introduce potential investors to the capital seeker.

What are the components of a Capital Introduction Agreement?

The components of a Capital Introduction Agreement may include:

  1. Parties: The names and contact information of the capital introducer and the capital seeker(s) or issuer(s) seeking capital.
  2. Services: A description of the specific services the capital introducer will provide, such as identifying and introducing potential investors, arranging meetings, or providing advice on the capital introduction process.
  3. Compensation: Details regarding the fees or compensation payable to the capital introducer for their services, including any success fees or commission structures.
  4. Confidentiality: Clauses addressing the confidentiality and non-disclosure obligations of both parties regarding proprietary or sensitive information exchanged during the capital introduction process.
  5. Representations and Warranties: Statements made by both parties regarding their authority to enter into the agreement and the accuracy of the information provided.
  6. Liability and Indemnification: Provisions outlining the limitations of liability and indemnification obligations of each party related to the capital introduction process.
  7. Term and Termination: The duration of the agreement and conditions for termination, including notice periods or grounds for termination.
  8. Governing Law and Jurisdiction: The governing law and jurisdiction that will apply in case of disputes.

Who can be members of a Capital Introduction Agreement?

The members of the Capital Introduction Agreement are the capital introducer and the capital seeker(s) or issuer(s) seeking capital. They are the primary parties involved in establishing the agreement and assuming the respective rights and obligations outlined in the document. Legal advisors or representatives may also be involved in reviewing and finalizing the agreement to ensure its compliance with applicable laws and regulations.

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