Document special angel rights without rewriting the whole round

This is commonly used where a founder, company or investor has agreed a point that applies to one angel only, rather than to everyone participating in the round. That might involve enhanced information rights, a board observer role, a future participation right or another specific commitment. It can be useful for startups raising from a lead angel, strategic backer or existing supporter whose deal terms are slightly different from the rest. The aim is to record that separate arrangement clearly without turning the main investment documents into a patchwork of exceptions.

Emails and headline term sheets can show commercial intent, but they often leave too much room for argument later. A side letter is usually used where the detail matters, especially if the investor expects a continuing right after completion. If the wording is vague, the parties may disagree about whether the right is binding, when it applies, or whether it overrides the shareholders' agreement or subscription documents. That becomes more important in a later raise, a board disagreement or an exit, when informal wording is much harder to rely on in practice.

A side letter can look simple, but the main legal issue is often how it interacts with the rest of the round. We usually look at whether the special term cuts across investor equality, board control, consent mechanics, confidentiality obligations or future fundraising flexibility. Common examples include information rights, observer rights, most favoured nation wording and commitments around follow-on investment opportunities. We also check whether the side letter should be conditional on completion of the wider investment, because a standalone promise can create confusion if the round changes or does not complete.

Yes. Many clients come to us with investor mark-up, a precedent from an earlier round or a template found online. That can be a useful starting point, but side letters often go wrong when borrowed wording does not match the actual deal documents already in play. A clause that looks harmless on its own may conflict with reserved matters, information rights already granted to others or restrictions in the shareholders' agreement. We can use your draft as a base, then adjust it so the final document better reflects the commercial deal and document set.

Once the wording is settled, the next step is usually to line up signing with the wider completion process. In some rounds, the side letter is signed at the same time as the subscription and shareholder documents. In others, it may only take effect if the investment completes. We can help you think through those immediate document points, including whether cross-references or conditions should be added. The service does not cover indefinite post-signing support, ongoing representation in negotiations or wider management of the whole fundraising process.

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