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All about: You Snooze, You Lose & No pay, no play

Written by
Sam Simpson
Last updated
11th January 2024

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At FounderCatalyst, we are always searching for ways to make the life of both investors and founders more straightforward. Based upon feedback from a few of our customers, we have introduced a pair of new features to ensure that an investor, or potential investor, going missing doesn't impact a founder's plans.

You Snooze, You Lose

If you have investor consents enabled in your paperwork, then from time to time you may need to seek authority from a majority (>50%) of investors in order to undertake certain actions - such as paying a dividend, issuing new shares, amending your articles of association etc.

But what happens if a major investor is travelling and can't respond, or hospitalised (or worse). In some cases, this can cause a funding round to stall - you can't issue shares without sufficient investor consent - with a potentially catastrophic impact on your company.

So, a few months ago, we've introduced a feature known as 'You Snooze, You Lose' - this gives an investor 14 days to reply to a request for consent. If they don't respond in this period, then their silence is deemed as consent after the 14 days, meaning that an AWOL investor won't stall a request for investor consent.

For new funding rounds, created since November 2023, this feature is switched on by default but if you have a funding round created before this date then worth checking this setting in Step 1, "Advanced round configuration" page.

No Pay, No Play

Sometimes an investor will pledge to invest in your business, will sign up to FounderCatalyst but will then ghost you, never to be heard from again.

Depending upon when they disappear, this can cause different issues:

You don't need to do anything to enable No Pay, No Play - this feature is built into every funding round automatically.

We aren't going to claim that either of these features is unique to FounderCatalyst - lawyers have been using these concepts for years...But in terms of investment documentation, we've got your back in case an investor disappears before, during or after an investment.

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