A model investment offer (term sheet) setting out the key points of the cooperation is available on the capital funds’ website, so that the company can read the terms of the investment before it indicates its need for capital.
As the fund manager’s equity funds are always invested in minority (up to 49%) shareholdings, the acquisition of a stake does not carry any direct management rights. Although it does not intervene in the operational management of the company, it monitors the achievement of the business objectives in the form of monthly and quarterly reports.
On certain issues, the equity fund has a veto right. Such matters typically involve both the fund manager and the business plan, e.g. change of ownership, change of senior management, significant borrowing, sale of assets above a certain threshold, and require the fund manager’s approval.