An angel investing and venture capital question.
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An angel investing and venture capital question.
I borrowed money and loaned a startup
the bulk of its initial capital. In
return the zero interest loan was to be
repaid back within a year. I was given
a 10 share if the money remained
unused in their bank account during
that year. Predictably the money was
needed and out agreement was amended to
give me 30. The loan was eventually
paid back after 18 months. One of the
partners is now saying since the loan
has been paid back i should go back to
the initial 10, and that it’s the
right thing to do. Our contract is
binding and i disagreed. What are your
opinions on this?
Asked on August 27, 2016 under Business Law, Louisiana
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
You have the right to enforce the contract: if the terms of the contract (as amended) give you 30% under these circumstances, you can insist on that. If the company refuses to comply with the terms of the contract, you could file a legal action seeking a declaratory judgment (court determination) that the contract means what you believe it does, and a court order requiring them to give you the 30% ownership. This sort of action, seeking court orders, etc., is more procedurally complex than the typical action seeking nothing but monetary compensation; you are advised to retain an attorney to help you.
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