Zest Your Equity | 21-August-2024

What is an employee option pool? Plus term sheets, equity financing documents, and more.

Author

Ghalia from Zest
August 21, 2024

This week’s agenda 📜

  • What’s New? 🕐

  • Startup fundraising? 💰

  • M&A activity 🤝

  • What we’re reading 📖

  • Our blog ✍️

  • Zest in the news

Let’s dive in 👇

Key Terms and Concepts

Employee option pool: Shares of stock reserved for private company employees that are typically issued as options or stock units. The employee option pool is included in a company’s cap table and is meant to incentivize early employees by participating in the company’s potential appreciation. 

Term sheet: A non-binding agreement provided by the lead investor in a fundraising round that outlines the proposed terms and conditions of an investment.

Equity financing documents: In a private company’s priced equity round, entrepreneurs and their legal team will create necessary transaction documents for investors to sign.

1. Subscription Agreement (SA): This document details the issuance of shares in the private company, specifying the number of shares, the price per share, and the parties involved in the transaction. It serves as a binding agreement between the company and the investor.

2. Shareholders’ Agreement (SHA): This agreement governs the relationship between the shareholders, including their rights, responsibilities, and obligations. It typically covers key areas such as management control, dividend policies, transfer of shares, dispute resolution, and potentially exit strategies, ensuring that all parties are aligned on the company’s governance and future direction

Who’s Raising? 💰

  • 🇦🇪 UAE-based fintech Yuze has raised $30 million in investment led by Osten Investments. 

  • 🇸🇦 Saudi Arabia-based e-gifting platform Resal has closed a $9 million Series A round.

  • 🇵🇰 Pakistan-based fintech PostEx has raised a $7.3 million pre-Series A funding round, led by Conjunction Capital, along with Dash Ventures, Sanabil500, VSQ, FJ Labs, and Zayn VC.

  • 🇦🇪 UAE-based foodtech MealPlanet has secured $6 million in a Seed round, led by regional Middle East Venture Partners (MEVP), AlTouq Group, Sanabil 500, Faith Capital, and Alturki Ventures, as well as renowned entrepreneurs Marc Lore and Samih Toukan.

  • 🇰🇼 Kuwait-based fintech Kem has raised a $3 million investment from Tether.

  • 🇪🇬 Egypt-based fintech Lucky ONE has raised $3 million in a convertible note from Lorax Capital Partners, KEM, DisrupTech Ventures and other existing investors. 

  • 🇸🇦 Saudi Arabia-based foodtech Yalla Plus has closed a Seed investment round of $2.7 million, led by Merak Capital, with participation from Khwarizmi Ventures, Isometry Capital, along with regional and international angel investors.

  • 🇸🇦 Saudi Arabia-based SaaS provider Blend has raised $1.3 million in a pre-Seed investment round, backed by an undisclosed group of angel investors. 

  • 🇸🇦 Saudi Arabia-based loyalty platform aggregator Mithu has raised a $500,000 pre-seed round backed by the Web3 venture builder Adaverse.

  • 🇸🇦 Saudi Arabia-based IT services provider Asas Specialised Information Technology has raised $320,000 pre-Seed investment for its flagship product, Resquad AI, led by angel investors.

  • 🇸🇦 Saudi Arabia-based food pick-up app TWLM has raised $270,000 in investment, led by B Group with contributions from angel investors. 

M&A Activity 🤝

  • 🇦🇪 UAE-based real estate developer Meteora Developers has acquired the Emirati property crowdfunding platform Maisour in a multimillion-dollar deal.

What We’re Reading 📖

Selling a startup in an ‘acqui-hire’ is more lucrative than it seems, founders and VCs say | TechCrunch

Selling under such circumstances is often not as poor of an outcome for founders and key staff as it initially seems. 

Why VCs love obnoxious founders

VCs don't care if you're a nice person. They want founders who take massive risks.

Middle East Trillions Force New Concessions From Wall Street

Apollo, Blackstone and other big money managers are reshaping longstanding practices to win part of the $4 trillion in Gulf sovereign wealth.

Key Investor Support Helps PE Seeding Shake Stigma

Seed funding is trying to shake its negative reputation with the support of CalPERS and established GP stakes players.

Saudi’s new Investment Law

Saudi’s new Investment Law, which is expected to come into effect with its executive regulations at the start of next year. The new law removes many major barriers for foreign investors looking to do business in the Kingdom, essentially leveling the playing field with local investors.

Our Blog ✍️

Private companies need to raise capital to fuel future growth.

Entrepreneurs need to understand the various concepts of raising capital that are often misunderstood. Navigating the maze of investor relationships, key terminology, and negotiations can be an uphill battle.

As you raise capital from investors, you’re typically negotiating with professional deal makers—investors who have had hundreds or thousands of repetitions. 

In our latest article, we’ll explain what you need to know during your fundraising journey so you can enter into your investor conversations with confidence. 

You can read it here.

Zest in the news

Last week, Zest organized a meet and greet with local investors and market stakeholders in Amman, Jordan.

We’ve been inspired by the excitement in the private markets ecosystem in Jordan and across the MENA landscape.

Our team has enjoyed hosting meet-ups throughout this year and we looking forward to hosting many more.

Want to learn more? Schedule a time with our team below!

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