The Clap
A cooperation protocol to support startups’ investment framework in Egypt is being developed.
The deets
The protocol is set to facilitate venture capital (VC) & private equity investments in Egypt.
What they agreed on
The General Authority For Investments is set to prepare a “Standard Shareholder Agreement”, checking startups’ initial valuations, & identifying the best timing for injecting investments.
The FRA will help VCs & private equity firms by regulating ownership transfer through “Convertible Instruments”. The FRA will also identify the specific procedures for the ownership transfer process for investing companies.
The Information Technology Industry Development Agency (ITIDA) will work on providing more safety nets for passive shareholders in the startups.
Claps Class
- Shareholder Agreement is tailored to identify and ensure the shareholders’ rights. VCs and private equity usually demand protection for their minority stakes.
- Convertible Instruments are debt instruments that can be converted into equity stakes in the future.
- A passive stake is one that doesn’t seek to influence or change control of a company.
