USE THIS TEMPLATE LETTER TO OFFER EXISTING INVESTORS THE CHANCE TO INVEST IN YOUR NEW INVESTMENT ROUND, PROPORTIONATE TO THEIR EXISTING SHAREHOLDERS.

When you have existing investors who have pre-emption rights (i.e. a right of first refusal) in relation to new issues of shares – it means you must give them the opportunity to invest in future investment rounds, proportionately to their shareholding.

If they hold 5%, then they have a right to contribute 5% of the funds and acquire 5% of the shares being issued in the new round and the price that has been agreed with the new investors.

In effect, this is an ANTI-DILUTION RIGHT for investors.

Unless agreed elsewhere in other documents, you should give them 21 days to consider the offer.

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