Frequently Asked Questions

What are the closing conditions in a Preferred Stock financing?

To “close” a preferred stock financing–collect funds from investors and issue them shares of preferred stock–a stock purchase agreement or subscription agreement will usually contain multiple conditions to the obligations of the investors to provide funds and the company to issue the shares. These usually include the delivery of certain ancillary documents, evidence of proper corporate action by the company and the filing and acceptance of an amended and restated certificate of incorporation with state authorities.