LibraryInvestment terms sometimes change from what was initially communicated to your investors at the time of their commitment. This can include:
For investments acquired directly from a target company: the terms of a SAFE note, price per share, or side letter had material changes.
For investments acquired via a layered fund: the upstream management fee/carry fee/expenses that your deal is charged (directly by the upstream vehicle, or by further upstream vehicles), the underlying SAFE note/price per share, or side letters change, or the upstream layer itself needs to be swapped.
Changes of terms present a material change to investors that differ from their initial understanding. The standard Operating Agreement of all deals on Seed Labs give Managers the discretion to invest at any terms they see fit.
To prevent fraud and abuse on Seed Labs, Managers will direct Seed Labs to send an email notification to investors about the change in terms, where each investor must opt-in either:
Actively: Investor fills out a consent form acknowledging the change or requesting a refund.
Passively: 48 hours after notification, the investor waives the ability to request a refund.
This process ensures transparency and gives investors the opportunity to make an informed decision about the changed terms while maintaining compliance with regulatory requirements.
