Startup Lithuania pre-acceleration course: Startup Guide

Exercise 3.4.3. Forms of the investment

Forms of the investment

A form of the investment will determine whether your partnership with an investor will be registered in the Register of Legal Entities of the Republic of Lithuania. 

Registered forms of the investment:

  1. Equity investment – you will register this partnership from the very beginning and  issue new shares which will be acquired by the investors.
  2. Convertible bonds – less strict than the equity investment, because the decision on the bonds issue is registered but the shares will be received later.  This way the investors clearly know how much of the shares they will get.


Unregistered forms of the investment:

  1. Convertible notes – the investment is given as a loan and  both sides agree on the terms of the note (how the debt will convert into shares for the investors later). 
  2. SAFE (simple agreement for future equity) – the number of  shares and  a specific price per share is not determined at the time of the initial investment. Parties agree that they will postpone deciding on it depending on the next investment round and they agree on some discount that will be given to those first investors.
  3. Loan – borrowed money will be returned to the investor at an established rate of interest. This is less popular than the other forms mentioned. 


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